3rd party payroll services in India are outsourcing solutions that assist businesses with payroll processing, PF, ESIC, Labour, Gratuity, legal and Tax compliance and other related HR functions.

MSME, SME, Start-ups, small business organizations and MNC’s companies in India choose 3rd party payroll services to unlock cost-efficiencies, process effectiveness, ensure legal compliance, standardise payroll processes, provide quick turnarounds and decrease lead times.

3rd Party providers stay up to date with evolving labour laws in India, enabling businesses to adhere to changing regulations and avoid compliance challenges.

Standardised payroll processes ensure consistent and timely payments for employees, enhancing satisfaction and reliability of the employees.

Yes, 3rd party providers offer quick turnaround, effective and efficient change management, simplifying the implementation of necessary payroll policy adjustments.

3rd party payroll service providers prioritise data security, with advanced security measures in place to protect sensitive payroll information. For example, NMIMSPL has strong and robust data backup services provided by Cloud Data Providers like Azure & AWS and high degree of access control to employee data within the organization.

Yes, NMIMSPL offers expertise, professional guidance and advanced software tools to simplify payroll operations for various organizations of different scales.

NMIMSPL adapts to the changing landscape of employment, accommodating full-time, part-time, apprentice, interns and temporary staffing services.

Yes, NMIMSPL provides cost-efficiencies and effective solutions  that can particularly benefit MSME sector, start up organizations, Indian MNC’s as well as Global MNC’s in India.

Yes, NMIMSPL offers integrated payroll and HR software solutions that support digital employee onboarding and manage the complete employee life cycle from recruitment to retirement.

NMIMSPL have dedicated resources and expertise to handle the complexities of adhering to both state & central labour laws, ensuring compliance in all respects.

Yes, NMIMSPL offer organizations in India a strategic advantage by streamlining HR functions, allowing them to concentrate on core business activities and strategic initiatives.

If a MSME, SME, Start-ups, Small Business Shouses or MNC’s outsources an agency, it becomes free of all everyday staff issues, salary payments, recruitments, dealing with mundane queries of employees regarding PF, ESIC, Gratuity etc among many other functions. Working with a workforce outsourcing & payroll partner like NMIMSPL provides the HR and payroll teams access to helpful technology and programs to assist with their specific tasks. From savings in costs as well as time to increased access to helpful technology and a professional team, outsourcing payroll can assist companies to complete their payroll quickly and accurately.

None. Albeit the 3rd Party Workforce Outsourcing and Payroll Services agency like NMIMSPL adds value to its parent / principal organizations. It takes over their mundane tasks of dealing with government agencies like PF, ESIC, Insurance etc and frees them to the Core HR functions and strategic Initiatives  of the organisation. It should be also noted that MSME organisations, start-up organisations, small business houses can focus on their core business and divert all their financial muscle to the core business, instead of engaging in day-to-day mundane HR tasks.

A 3rd Party workforce management agency like NMIMSPL is the outsourcing of HR services for the any given company.  There are many reasons for this. One of the most common is, the incompetence of the in-house HR management. It also becomes important especially when the company is extending its presence overseas.

One should compare all the pros and cons of getting hired by a 3rd Party payroll and decide accordingly. It also includes the consideration of future goals by the candidate and decisions should be made after weighing all those factors. As such there is no difference in working on the payrolls of a 3rd party agency or working on-roll for a company. An Agency like NMIMSPL 100% replicates the work-culture of its parent / principal company. There is NO difference in the pay structure of the employee. An employee can receive the same benefits that otherwise an employee who works for on-rolls of an organization.

Payroll is the process of paying the salary to each employee, and a payslip is a document that tells you how much salary the employee received, the month of salary disbursal and the designation and other employee information.

Payroll is the process of depositing salary in employee accounts and compensation or remuneration is a specific component of the salary which describes the benefits or allowances the employee is eligible for. Compensation or remuneration is the Total Cost to the Company (CTC) incurred towards employment of an individual on a Annual or Monthly basis.

Payroll is the process of depositing the salary in the accounts of the employees and salary is the amount received in each account once the payroll process is complete.

Payroll tax includes taxes like Professional tax, Perquisite Tax, Tax Deduction at Source (TDS) etc. which are paid by the 3rd Party employer. Income tax is levied on the income of the individual and is divided into separate slabs with each having a particular deduction. Income tax is paid by an individual, if eligible to file returns, after receiving Form-16 and related documents from the 3rd Party agency.

None. A company can use an in-house payroll system to pay salaries to its employees. This payroll system calculates the number of days worked, the leaves and the type of leaves availed, the number of holidays in a year/month and calculates the salary accordingly. On the other hand, in a 3rd Party payroll system, the company outsources its payroll to a 3rd Party with all the benefits and perquisites that the company provides. The main company transfers an amount equivalent to the total CTC requirement every month. The 3rd Party company then transfers the appropriate salary for each employee and pays PF, ESIC, LWF, Gratuity, Medical Insurance etc. It calculates the salary breakdown and then shares pay slips with the employee after crediting the salary.

On-roll employees are working directly for the company whereas payroll maybe off-roll for its employees on 3rd Party Payroll agency. In such an instance, the employees will be working for the 3rd party staffing company who hires them on behalf of the main organisation.

Companies hire on 3rd Party payroll because they do not want to manage the very difficult process of payroll or lack the resources for it. They can also generally hire at a lower cadre employees or front-line employees when they go for a 3rd Party payroll and staffing provider. They also do not need to provide all of the benefits that are otherwise due to on-roll employees. All these benefits make 3rd  Party payroll systems more attractive than in-house payroll.

Following are the advantages of hiring a 3rd Party Payroll Services Agency or Workforce Management Company or Workforce Outsourcing Agency:

Focus on Core Business Activity and strategic initiatives of the company: A 3rd Party payroll service allows the organization to focus  on core business activities & strategic initiatives and divert all the cost of additional resources, software etc. to its core business. It also helps to reduce the efforts of the company as they are not hired on the company payroll.  
Better business development: With a 3rd Party payroll agency being taken care of by professionals or agencies like NMIMSPL or through software platforms user by the agency, the company can concentrate on what matters most to them, i.e., business development and expansion.
A higher level of adherence to state and central laws: 3rd Party payroll will be more familiar with compliance and legal requirements and know how to handle payroll and compliance without deviating from established laws. Tax slabs and other compliance-related laws are reframed over time and the 3rd Party adheres to these laws, then it will be easier for them to handle the payroll accurately and prevent any penalties to the parent / principal organization.
Expertise in the field: 3rd Party payroll services have the expertise to manage your payroll a lot better than your company can in-house. The process will be a lot more streamlined and have fewer errors and the essential parts that are often repeated can be automated too. But an agency or a professional would be more knowledgeable on how to do this.
Protection of Personal Information: 3rd  Party payroll service providers are more watchful of the employee and customer data. They protect all the data with industry certified encryption. All employee details remain secure and even though they can be accessed through self-service portals, they continue to remain secure.
Knowledge of the process and industry experience: 3rd Party payroll providers will have a knowledge of the process and unparalleled industry experience. The payroll handling may vary from industry to industry as some may provide additional allowances while others may not.
Customer Service for the Company and its Employees: Handing over payroll to a 3rd Party ensures that the customer service is great for your company and its employees. Your employees can have any doubt resolved with them and you need not spend time trying to address issues related to compliance.

Closing words
Having an efficient payroll management agency has several benefits for employees downstream and for employers upstream. It makes the process of depositing the salary monthly a lot more transparent / principal, calculations are performed more accurately, and the employee information is more secure. There are several cost benefits as well to the employer. Let us know when you will be upgrading your payroll management system. Looking for a complete HR management solution where payroll, taxes, attendance etc. would be accounted for with accuracy.

NM Ingenious Management Services (NMIMSPL), a reputed HR, Workforce & Staffing company with several years of experience, can offer you payroll and HR management services. Our HRMS  software for payroll also tracks attendance, employee locations, manages leaves and does performance management to calculate appraisals too. It is an all-in-one employee performance assessment and payroll management software. Talk to NM Ingenious Management Services (NMIMSPL) today and manage your payroll effectively starting today.

It’s the same like working for a company on its rolls. A reputed 3rd party staffing services company like NMIMSPL, replicates the work-culture of its parent / principal company. Functional and Administrative reporting remains with the parent organisation. The outsourced agency only processes and manages the payroll function of its parent / principal company. The employee on 3rd party payroll services agency receives the pay and perquisites equivalent to its parent company employees at the similar levels.

Yes! A reputed 3rd party staffing services company like NMIMSPL, replicates the work-culture of its parent / principal company. Functional and Administrative reporting remains with the parent organisation. The outsourced agency only processes and manages the payroll function of its parent / principal company. The employee on 3rd party payroll services agency receives the pay and perquisites equivalent to its parent company employees at the similar levels. Additionally, if the employee is a performing outstandingly or excellently then the parent company may absorb him / her in the parent company at any time at a higher position.

If the employee is a performing outstandingly or excellently then the parent company may absorb him / her in the parent company at any time at a higher position. A reputed 3rd party staffing services company like NMIMSPL, replicates the work-culture of its parent / principal company. Functional and Administrative reporting remains with the parent organisation. The employee on 3rd party payroll services agency receives the pay and perquisites equivalent to its parent company employees at the similar levels.

YES!!! You Should have accepted the job offer. It does not matter who is processing your payroll i.e. parent company or a professional 3rd party payroll management agency like NMIMSPL. A reputed 3rd party staffing services company like NMIMSPL, replicates the work-culture of its parent / principal company. Functional and Administrative reporting remains with the parent organisation. The employee on 3rd party payroll services agency receives the pay and perquisites equivalent to its parent company employees at the similar levels. If the employee is a performing outstandingly or excellently then the parent company may absorb him / her in the parent company at any time at a higher position.

Functional and Administrative reporting remains with the parent organisation. The employee gets to interact with the project managers, program managers and other seniors or the organization on a daily basis. If an employee is a performing outstandingly or excellently then the parent company may absorb him / her in the parent company at any time at a higher position.

Yes!! You should take up the offer immediately. Join that 3rd party payroll company and work for at least 3 to 5 years and learn skills and exposure to work in its parent company. No harm as long as you are getting paid dual to your worth or experience and knowledge. The employee gets to interact with the project managers, program managers and other seniors or the organization on a daily basis. Upgrade your technical & communication skills. When you switch company after 3 to 5 years then it’s your skills that matter. Nobody will point you that you work in 3rd party payroll or parent company payroll.

Yes! Why Not? Join that 3rd party payroll company and work for at least 3 to 5 years and learn skills and exposure to work in its parent company. No harm as long as you are getting paid dual to your worth or experience and knowledge. The employee gets to interact with the project managers, program managers and other seniors or the organization on a daily basis. When you switch company after 3 to 5 years then it’s your skills that matter. Nobody will point you that you work in 3rd party payroll or parent company payroll.

3rd Party payroll services have become a part of inclusive process in many companies, where they assign their payroll management to an external service provider. In this arrangement, the employer transfers the necessary funds to the 3rd Party, which assumes responsibility for handling all payroll-related tasks. This approach results in wages no longer being disbursed directly from the employer's account; instead, they are paid by the 3rd Party, giving rise to what is known as 3rd Party payroll services. Beyond salary processing, 3rd Party payroll services include a range of other functions viz managing the Provident Fund (for both employer & employees) , Voluntary PF, ESIC, Medical Insurance for eligible employees, Gratuity, Professional Tax, Employee TDS & filing TDS, Form 16 etc and many such routine tasks.  Many organizations deploy workforce for short term projects like Market Activation, Product Promotion activities, Merchandizing activities, Durga Puja or Ganesh Festival activities, 26 January or 15th August Big Day activities , Media Events, Marketing at strategic locations like Airports, sporting events like IPL, WPL etc, or College Events like Mood-I, IPTA, Antaragini etc. It becomes a tough task for organization to source such blue collared manpower and then manage the compliance related to government agencies. All such tasks are performed by the 3rd Party Payroll Management Agencies who are experts and have proficient knowledge in this area.

Many organic studies have  revealed that approximately 25% to 30% of top organizations business depends on 3rd  payroll services for diverse needs, leading to a mutually beneficial structure for both employers and employees.

Organizations and businesses opt for 3rd Party payroll services for various reasons, addressing a range of HR and financial needs. Those in need of 3rd Party payroll services include:

Payroll Management Challenges: MSME organizations, Start-up organization or small business houses that encounter difficulties in handling payroll tasks, including salary management, employee benefits administration and taxation evaluation, often turn to 3rd Party payroll Services.

Inadequate In-House HR Workforce: Companies lacking a well-structured or inadequate internal HR department or workforce management system and struggling to manage staffing processes often find value in outsourcing their HR services to a 3rd  Party Agency.

First time Job Seekers: For fresh graduates, persons from needy background seeking first job experience and the chance to work with trustworthy or growing organizations, 3rd Party staffing services agency is the best bet.

Apprenticeships, Interns, or Short Term Contractual Employment: Candidates seeking Apprenticeships or summer internship or contractual job arrangements always have an advantage  from 3rd Party staffing agency, which often support temporary employment arrangements with growing organizations, Start-ups, MSME businesses or small business houses.

Diverse business or operational needs of the organizations: 3rd Party staffing services cater to a wide range of industries, including FMCG, White Goods Industries, FMDG, Retail & Wholesale sectors, Software, Hardware  organizations in IT sector, Fin-corps, NDFC’s, small Banking sector, Hospitality industry, Pharmacy sectors, etc. These companies use 3rd Party staffing services to simplify HR and payroll functions efficiently & effectively.

Focus on Strategic Initiatives, HR Core Operations & Outsourcing mundane HR tasks: Many established organizations want to focus on the Strategic Initiatives, Core HR operations like implementing World class HR Policies, Training Need Analysis for its workforce, Appraisals & 360o feedback etc. Such organizations usually outsource mundane activities like managing monthly PF, ESIC, PT, LWF etc processes to a 3rd Party Payroll management services agency. This helps them to ensure that their existing HR personnel are focused on the core HR operations & skill development of the internal employees & enrich their HR experience, and do not get distracted by the trivial employee queries in such matters.