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Why Should Your Restaurant Outsource Its Payroll Services?

Restaurant employees preparing food


When you start a Restaurant Business, you might feel like it is a straight road with some hurdles to clear. Well, there is nothing wrong with that. The only difference is that you find a straight road with hurdles during the initial phase of the journey.

As you progress further and expand your business, it becomes hard to manage everything manually. Especially the payrolls.

While most restaurants have a handful of employees to deal with, they prefer to go with manual bookkeeping or DIY with the payroll management software. 

Manual bookkeeping and using software to take care of the payroll work fine if you have fewer employees. The moment your employee count increases to over 30, it becomes hard to manage.

While your business might opt to go for an in-house payroll management system with manual bookkeeping, other business owners hire professionals to do the same.

If you think your business needs to outsource the payroll services, visit

Why Does A Restaurant Need To Outsource Payroll Services?

Payroll services are limited to only restaurants with comparatively more employees than their competitors. If a business has few employees. They are capable of managing their payroll internally.

When we talk about restaurants, this industry has a high employee turnover. This is because of the seasonal employees, part-timers, and college students who keep on changing their jobs. This can make setting up and managing payroll difficult and time-consuming. 

Mid-size and Large-size businesses often have a high volume of payroll checks distributed every month. If you are doing it manually, the whole process will take time and are even prone to errors.

However, this job is better served by outsourcing payroll services. This is because you can not only get experts to do the thing effectively but also give you more time to invest in thinking about expanding your business.

Here are the reasons that will help you understand the importance of outsourcing.

1. Saves A Lot Of Time

No matter how many employees your restaurants have, processing payroll demands time and attention. Unfortunately, this often comes at the expense of valuable time that could have been invested in doing something valuable for your business.

While you can use payroll software to manage employees’ payroll, it is only useful when you are dealing with a handful of employees. When your employees increase the threshold of 50, you will find going DIY is only becoming more stressful.

This is where you will find that outsourcing the payroll services is helping you save more time, which is what matters the most.

2. Calculating Payroll

This is where things get complicated. When the paycheck day comes, hours are totaled so that they can be paid according to the number of hours they have put in.

Every hour is counted, accuracy is verified, and multiplied by their pay rate with the payroll services. Then the appropriate taxes are calculated and subtracted from the gross pay. 

If the employees also receive any benefits like health insurance, child support, or any retirement plan, an additional calculation is made. 

3. Printing, Signing, Distribution Of Paychecks

Once all the calculations are made, and the payment amount is decided, the next is printing checks, signing, and distribution.

This process is highly sensitive, and hence, employers are careful and double-check before handing out the paychecks. 

Some employees like to have direct deposits. So, the amounts are verified and processed. But pay stubs still need to be maintained for the documentation.

After all, these documents will help the organization file a tax return at the end of the fiscal year.

4. Preparing & Remitting Payroll Taxes

Even though payroll figures are calculated every month, there are other payroll tax responsibilities that companies need to take care of quarterly and at the end of every fiscal year.

At the end of the year, restaurant businesses must submit a year-end payroll tax statement that verifies each quarterly figure and tries to match the initially submitted figures.

Like individuals, businesses must also file a yearly tax return, where payroll figures are included as deductions.

5. Helps Avoid Payroll Mistakes

Payroll errors are quite common. And when that happens, it can be frustrating for both employees and employers.

For employees – A mistake in state deduction can lead to a sizable deduction from the final paycheck of the year. Missed hours and improper pay rates can also decrease an employee’s pay. This might cause frustration for the employees and long-lasting resentment.

Payroll errors can cause fines and different types of legal penalties for employers. Generally speaking, the business world is not well educated about the legal procedure and complexities. But, at the same time, they are legally responsible for any misrepresentation.

To avoid any of the mentioned scenarios, you can outsource payroll services. They can take care of all the completed tasks and ensure paychecks are handled accurately.

Things To Watch Out For While Using Payroll Services

Outsourcing payroll services does open a new path to paying your employees effectively. But, at the same time, it also opens up a new influx of challenges. 

Although the benefits far outweigh the cons, we would still like you to have an idea of what disadvantages you might face while outsourcing payroll services.

  • Delay In Paycheck Delivery: One major problem with outsourcing the payroll is the deliverability of the paycheck to the employees on time. This usually happens when workers are all around the globe.
  • Loss Of Control: Another shortcoming of payroll services is that you might find the lack of personnel touch. While everything is controlled using a software application, a lack of face-to-face confrontation can deteriorate the user experience if any error occurs.


As a restaurant owner looking to expand the business, you might find a payroll service taking care of a major chunk of responsibility. With the payroll services, you can leave all the calculative jobs to the agencies and can focus on making your customers happy with the delicious food.

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