How To Choose The Right Construction Payroll Services For Contractors - Featured Image

How To Choose The Right Construction Payroll Services For Contractors

As a contractor, your payroll requirements are likely to be fairly complex. Subcontractors work in different locations, have different pay levels, and are probably paid on different schedules.

With these complexities in play, some contractors look to construction payroll services as a way to outsource things, and to tap into industry-level expertise.

This article runs through some key factors to consider when choosing a construction payroll company to work with.

After reading, you should have a better understanding of the questions to bring to initial conversations with potential partners, and how to choose the right partner in the long run.

What are construction payroll services?

Construction payroll services are specialist services provided by a payroll company, tailored to the specific demands and legal requirements in the construction industry.

As a contractor or subcontractor in construction, you'll know first hand about the tax complexities of self-employment, or of working with the self-employed. A construction payroll services company will help you to navigate these complexities, letting you spend more time on getting the work done, and less worrying about HMRC's rules and regulations.

In short, working with a construction payroll service company is a shield against the risks present in the ever-changing legal landscape surrounding the construction industry.

Key Factors to Consider when Employing a Payroll Service

Keep these questions in mind when identifying, evaluating, and deciding between prospective construction payroll service companies to partner with.

What are your company's needs?

Do you need to free up time or internal resource? If you feel that internal resource is strained by trying to manage payroll in-house, then an outside agency with dedicated staff can help.

Similarly, if your in-house team aren't familiar with CIS, then tapping into the expertise in a construction payroll service could be quicker and more cost-efficient than training internally.

Are they industry specialists?

This article is about construction payroll services specifically, so we're assuming that people reading are working somewhere in the construction industry.

In this case, specifying that you want to work with a construction payroll company is a good starting point. This stipulation should whittle down potential options to companies who are experts with the Construction Industry Scheme (CIS) and all other relevant HMRC schemes and legislation that directly impact or sometimes overlap work in the construction industry - like IR35, for instance.

What will it cost to retain their services?

Will you be paying a flat rate based on your company size, or does the cost depend on the specific services you require?

Once you've got an idea of how cost is arrived at, you can cross-reference the number with what the equivalent amount would get you in terms of internal resource, whether through hiring new staff members or upskilling existing ones.

This is a classic trade-off when outsourcing business processes to a third-party. There's always the argument that bringing things in-house is a better investment in the long term, but when you add up the financial and administrative costs, outsourcing quickly becomes an attractive option.

How do costs weigh up against benefits

Let's be honest, the main reason most businesses work with a dedicated construction payroll service provider is to reduce their workload and streamline their practices.

When retaining the services of qualified professionals with the latest software and systems, and who keep abreast of all developments in the ever-changing tax landscape, the trade-off between cost and benefit is a no-brainer.

How experienced are the companies you're considering partnering with?

The tax landscape is always changing. New legislation is brought in, employment case law redefines how things are done, and numerous other pressures exert themselves on the industry.

Amongst these shifting sands, it's easy to fall behind. Payroll service companies that don't invest the proper time and energy in keeping abreast of changes and developments usually don't last too long.

Check out how long your prospective companies have been trading for. Durability is a good top-level indicator in this industry.

But also spend time looking at their credentials: Which ones do they have, and how recent are they? Then take a look at their testimonials: Are customers broadly satisfied or unsatisfied? And are their customers representative of the needs and demands of your industry?

Weighing up these factors should give a good idea of whether the companies you're looking at are long-term players with the expertise and credentials to deliver success, or whether they're just cowboys.

Where does liability lie?

With in-house payroll, you're responsible for any errors. And when you're dealing with HMRC and tax, errors can get expensive quickly.

Some construction payroll companies accept responsibility for errors arising from their work as part of the service you're paying for. This carries a huge amount of peace of mind, because the risk of getting caught out by a nasty surprise a few months, or even a few years down the line is reduced.

What's their customer service like?

This is last, but it is absolutely not least. Working with a construction payroll services company involves outsourcing a huge chunk of your business admin, and you want to have any questions answered or concerns addressed as quickly as possible.

Partnering with a company who don't value your time and just see you as a monthly source of income will add more stress and hassle to your business than they remove.

On the other hand, partnering with a company who offer dedicated account management and quick support over the phone will take a weight off your shoulders and allow you to rest easy.

Spend time understanding what sort of customer service you can expect as a paying client, as this can (and should be) a deal breaker.

In Conclusion

Contractor payroll is complex, and there’s a cost/benefit trade-off associated with outsourcing things to a specialist construction payroll company.

This article has outlined some of the key considerations to keep in mind when identifying, evaluating, and deciding between potential partner companies. It’s our hope that you now feel a bit better equipped in choosing the right construction payroll services company to meet your business needs.

Get in touch today and find out how we can help you navigate the complexities of working in the construction industry.


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