PaySpace Blog


Why outsource your executive payroll?

Edmund Pohl PaySpace

Every organisation will, at some point, need to familiarise itself with the world of payroll and the associated challenges of legislative changes, regulatory compliance, BEE scorecards, profit sharing and many more. This highly sensitive process requires deep expertise and knowledge, which is why many forward-thinking organisations outsource their payroll to professionals with the right skills and expertise.

Nowhere is this truer than with the executive payroll. Complying with legislation that governs remuneration for executives can be a complex process for a variety of reasons. For one, executives’ remuneration is often only finalised towards the end of the tax year or even in the following one. In addition, directors may receive dividends, profit share, or a large bonus at the end of the year, so at that time, the bulk of their tax will need to be paid to SARS at that time. Therefore, it makes good business sense to outsource the executive payroll function, to enable businesses to leverage the necessary expertise and make sure all compliance and governance boxes are ticked.

Another important reason to outsource the executive payroll is confidentiality. Typically, in the organisation, there is a mid-level executive who handles the payroll. But, having them know the ins and outs of each director’s salary package, isn’t the ideal scenario. When this function is outsourced to professionals, the principle of least privilege is applied, ensuring only those who strictly need to know the details will have access to them, and because they do not work at the organisation, there is no risk of confidential information leaking out.

This is one of the most difficult areas to manage when it comes to handling executive payroll in-house. It’s not merely about keeping pay grades and bonus amounts confidential, but also about keeping personal matters relating to court-ordered payments or similar private.

Unfortunately, it’s not uncommon for confidential payroll information to be shared with the general office through idle gossip, irrespective of whether it is malicious or not, but it can end up seriously damaging your business.

Outsource the executive payroll

Outsourcing the executive payroll is a simple and surprisingly affordable way to manage the confidentiality of executives’ remuneration. Any payroll specialists will have a firm policy in place to ensure that payroll matters are only discussed with very specified employees within the business. They will respect the privacy of each executive on your payroll so that no information falls into the wrong hands.

Other key factors to consider are accuracy and paying on time. With executive payroll, there can be no room for error, and paying high-level employees late isn’t an option. To ensure accuracy, PaySpace has built rigorous checks and balances into the payroll process. We aim to automate as much as possible so that less user intervention is needed.

Finally, outsourcing your executive payroll is highly cost-efficient because it is a far smaller sample of employees that need to be dealt with. Dealing with an executive payroll is a more onerous task than it is for normal employees, you might spend as much as 80% of your time managing the process. However, when you outsource it, you’ll find the cost is only 20%, which saves the company both time and money.

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