Outsourced payroll services
Get your own offshore software team with outsourced payroll in 2-3 months. We guarantee:
- Valley-grade team of 20+ senior developers in 3 months
- Offshore tech market navigation, tax, and legal consulting
- Up to 40% savings compared to traditional outsourcers
- Zero buy-out cost
- Employer of Record service – our compliant employment solution
- No intermediary in team management
Poland
Ukraine
Romania
Bulgaria
Mexico
Argentina
Colombia
ChileAlcor is Disrupting the Traditional Staffing Models
We Guarantee Seamless Payroll Outsourcing Services and
2.5 years
is the average tenure of our hires
Cultural alignment
with your company values
Pricing transparency
no hidden or buy-out fees
Legal & compliance
and other needed operational support
Exceptional dedication
It’s literally your own team
Long-term partnership
shared responsibility & commitmentKey Things about Outsourced Payroll Service
Our payroll outsourcing solution includes
- Payroll management for your developers
- Payroll tax planning, calculation, and consultation
- Preparation and allocation of statements
- Preparation and submission of payroll returns to local authorities
- Statutory payroll reporting
- Employee benefits administration
- Processing payments for the tech industry
Advantages of outsourcing payroll
Time & cost saving
If managing payroll internally, your accountants would have to cover salary calculations of both in-house and nearshore/offshore development teams. This means hiring and training additional workforce to handle the workload. On top of that, your payroll experts would have to learn the specifics of the foreign payroll rules, regulations, tax system, etc. to stay compliant.
Getting external payroll services, on the other hand, can help you cut costs by avoiding the need to recruit more payroll experts. Instead, you’ll pay a fixed monthly fee for a bundle of accounting services. Plus, it frees up time for your internal team to prioritize core financial activities.
Compliance & risk mitigation
When hiring developers abroad, it’s vital to ensure your tech business follows all the local laws, especially regarding payroll and taxes. Cooperation with a local outsourced payroll provider can shield your company from legal issues and fines, as they know the ins and outs of the local tax laws, wage regulations, and compliance requirements, constantly staying updated on any changes.
Data security
Payroll deals with sensitive employees’ information like social security numbers, salaries, and bank details, which can make tech entrepreneurs reluctant to opt for payroll processing outsourcing. However, trusted payroll vendors prioritize security, investing in cloud-based servers, data centers, and cybersecurity software. This ensures maximum protection from embezzlement, identity theft, and other risks.
Effective scalability
Those tech companies looking to rapidly expand their development team abroad often encounter growing and complex payroll needs. Using payroll management outsourcing services can easily handle fluctuations in employee numbers, benefit plans, and tax requirements, providing scalability without the need for extra internal resources or infrastructure. This approach has been embraced by notable tech companies like People.ai, BigCommerce, ThredUP, Sift, and Dotmatics when expanding dedicated development teams abroad.
Challenges, pitfalls, limitations
Inaccuracy & errors
There are cases when vendors delegate payroll management to junior staff without proper monitoring and reviewing of their work. As a consequence, payroll calculation errors and payslip discrepancies may occur, resulting in salary delays for your software developers. When opting for payroll compliance outsourcing, make sure your vendor has a professional team of accountants with extensive experience in managing global payroll and a multilevel accounting check.
Extra expenses
Some payroll processing outsourcing firms may charge extra for services like offboarding or benefits management and/or add costs for additional services that your company doesn’t necessarily need, leading to overspending. To keep a lid on expenses, it’s wise to team up with payroll processing companies that operate on a pay-as-you-go basis. This way, you only pay for the services you actually use.
Delayed response time
Working with a third-party vendor isn’t always smooth sailing, as there are lots of things to negotiate to sync up both parties’ processes. Maintaining fruitful communication and dealing with urgent matters asap can be tough, especially with possible time differences. Therefore, opt for professional payroll vendors who offer a key account manager to navigate you through payroll, legal, and other operational matters.
How does payroll outsourcing work
It all begins with identifying your payroll needs and selecting the right outsourced payroll company. Then you’ll get initial consolations, covering services, pricing model, pay frequency, cooperation terms, timeframes, guarantees, and other details.
Once the terms are agreed upon, the payroll service provider collects employee data, sets payroll schedules, configures tax withholding preferences, and establishes secure access for the client to input or review payroll information. From there, the provider starts payroll processing and other tasks outlined in your contract. Most service providers also offer ongoing support, reporting, and analytics.
Outsourced vs In-house payroll
Keeping payroll management in-house means extending your team with experts who possess narrow knowledge of the payroll, tax, and compliance specifics of a particular country. This results in additional labor spending. Meanwhile, an outsourced payroll company already has experienced specialists who are keen on all the intricacies of the local market and have up-to-date knowledge of the latest trends and practices in the field.
Payroll and compliance outsourcing also increases the chances of keeping your payroll error-free as opposed to in-house payroll. Complying with all the local norms can be tricky and time-consuming, sometimes resulting in overspending or fines if doing it incorrectly.
On the flip side, keeping payroll functions in-house grants more control and allows for instant alterations in case of policy updates or restructuring. However, getting payroll outsourcing solutions liberates your team from work overload, allowing you to focus on strategic tasks.
Choosing outsourced payroll service provider
- Qualification & experience: Choose a vendor with experienced payroll and legal professionals in the tech industry. Also check out their case studies, client reviews, and testimonials.
- Pricing structure: Consider payroll processing service providers with predictable pricing and detailed invoices to avoid hidden fees and therefore eliminate the risk of overpayment.
- Technology & security: Check if your vendor uses modern payroll software, applies security protocols and encryption standards, and complies with data privacy regulations to safeguard employee information.
- Guarantees: If your vendor provides compensation for mistakes or missed deadlines, has outlined timeframes, and offers pricing transparency, they are a green flag.
What is Employer of Record?
No business growth is possible without a powerful team of A-players. And, in order to legally employ such software developers, some tech companies see only two possible solutions:
- establishing their legal entity and managing the employment, payroll, tax payments, and compliance on their own
- or outsourcing these operations to multiple vendors.
The good news is that there is a viable alternative — an Employer of Record (EoR) service that allows tech businesses to employ talented software developers without setting up a legal entity and receive all the needed operational support in one place.
What you get with Alcor’s EoR
Alcor provides an Employer of Record service in Eastern Europe and Latin America. Unlike other EoR vendors, we focus on the technology field, possessing niche knowledge of recruiting and employing Senior, Lead, and C-level software developers on the best terms. We handle everything from HR payroll, onboarding, and employee termination to tax payments, legal compliance, documentation and employee benefits management.
We guarantee:
- 100% compensation for fines caused by our mistake
- 20%-40% cost reduction in comparison with outsourcing
- 100% transparency, with direct salaries instead of rate cards
- Key account manager to assist you in all matters
- No third parties as we do everything in-house
- 2.5 years is the average tenure of our hires
Better Than Just Outsourced Payroll
Alcor is an all-in-one place to establish and run a turnkey software R&D center:
- Employer of Record support — no need to set up your legal entity
- From 0 to 100 software developers in one key talent pool
- Establish your corporate culture with your own team. No intermediary
- No buy-out or other hidden fees
Our Customers
Alcor is a reliable partner that meets our hiring needs. We finally hired experienced software engineers in Eastern Europe with strong tech skills and business acumen. Account Managers are awesome!
With Alcor’s all-in-one solution, we got a software R&D office with 15 senior PHP devs and a compliant operational coverage. I really appreciated their transparent pricing structure and deep expertise.
We interviewed a lot of EoR platforms and companies, but Alcor was the only one that provides a combo package of EoR and Recruting offerings. Alcor helped us build a full stack team in 1.5 month.
We wanted to switch from our outsourcing provider, and Alcor has become really game-changing for us. Within a mere 6 months, we got a fully-fledged team of 30 engineers in our own R&D office.
Alcor’s R&D solution eclipses full-cycle recruitment, EOR service, and operational support for our offshore team. Their ‘all-in-one place’ approach is far more cost-effective than I could’ve imagined.
I value their commitment to going the extra mile. We evolved from an outstaff project into an independent company, and Alcor’s support was crucial. They hired and ondoarded 15+ professionals for us.
Thanks to Alcor, we hired four engineers and a designer that strengthened our team. Beside stellar recruitment, Alcor flawlessly handled our payroll. Their approach was seamless and swift.
FAQ about Outsourcing Payroll Services
1) What is payroll outsourcing?
Payroll outsourcing involves delegating payroll processing to a third-party vendor. The payroll outsourcing vendor covers payroll, accounting, tax payment, and compliance functions and is responsible for timely and accurate paychecks for your team of software engineers.
2) Is it better to outsource payroll and when?
Payroll outsourcing allows businesses to cut costs, mitigate risks and fines associated with compliance, avoid errors, and overall streamline the payroll process in a foreign country. The cooperation with a payroll outsourcing company comes in handy for tech companies that actively scale their development teams abroad. Learning the specifics of local laws and regulations can be a real headache, so it’s best to get professional assistance to make offshoring or nearshoring a fully managed and seamless experience.
3) How can IT companies change offshore payroll, PEO, or EOR provider?
Firstly, choose a suitable and reliable alternative. Draw on your previous experience and pay attention to the vendor’s industry expertise, pricing structure, track record, guarantees, technology and security capabilities. If your development team is rapidly growing abroad, you may consider opting for a more comprehensive solution, like Alcor’s R&D center, to keep all operations in one place. Next, audit your processes to uncover inefficiencies and set clear goals for your new vendor. Finally, develop a transition plan and transfer your payroll processing to the new provider.
4) Which model is best suited for tech companies: outsourced payroll company, PEO, or EoR?
For tech companies expanding their development teams abroad, cooperation with an outsourced payroll company is not the best fit, as it typically offers a limited set of operational services. In this case, Professional Employer Organization (PEO) or Employer of Record (EoR) alternatives often prove to be more cost-effective and convenient.
While PEOs operate on co-employment terms, which basically equals developer leasing, EoR providers serve as legal employers of your programmers, leaving team management under your control. Some EoR companies, like Alcor, also cover full-cycle IT recruitment services, making the process of entering a new market entirely hassle-free.
5) Can a new payroll outsourcing provider fix existing payroll errors?
Yes, a professional payroll vendor can help you cope with the existing payroll errors. But you’d need to put in extra effort to choose a reliable service provider capable of addressing your specific problems. Pay attention to their expertise, track record, client reviews, pricing model, guarantees, and security protocols.