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What Exactly Is Payrolling? Why Do I Need It?

Chris Mefford
Post by Chris Mefford
May 23, 2024
What Exactly Is Payrolling? Why Do I Need It?

What Exactly Is Payrolling? Why Do I Need It?

In 2024, many companies rely on temporary staff to manage fluctuating demands. While these resources are crucial for achieving revenue and production goals, they also increase the workload for human resources departments. This is where payrolling services, or employer of record (EOR) services, come into play.


What is an Employer of Record?

An employer of record is a third-party partner that assumes the responsibility of payrolling temporary staff. This includes managing taxes, unemployment insurance, workers’ compensation, and employee benefits, thereby alleviating these burdens from your company and mitigating co-employment risks.

According to recent studies, the use of Employer of Record (EOR) services has been on the rise, driven by the increasing need for businesses to manage international compliance and streamline their HR processes. 

Specificallyit's estimated that around 43% of companies are currently utilizing EOR services to manage their contingent workforce. This trend is particularly noticeable in industries where managing a global workforce and ensuring compliance with local labor laws are critical challenges.


Payrolling HR Country Hiring Guides


These services are gaining popularity because they allow businesses to hire and manage employees in different countries without needing to establish a legal entity in each location. This significantly reduces the administrative burden and legal risks associated with international employment.


Why Consider Payrolling Services?

For companies that need contingent workers but also require their HR teams to focus on other critical business tasks, payrolling can be a strategic solution. Here are five compelling reasons to consider payrolling or employer of record services:

  1. Cost-Effectiveness

    Hiring full-time employees comes with additional costs, such as benefits and taxes (Social Security, Medicare, state unemployment, healthcare, insurance, and 401(k) plans), which can add 18-20% to a base salary. Outsourcing payrolling shifts these expenses to the employer of record, saving your organization money.

  2. Speed

    The administrative processes of employee onboarding can delay the start of contingent staff by days or weeks. A payrolling provider can expedite these tasks, enabling new hires to begin work immediately.

  3. Day-to-Day Efficiency

    As businesses strive for leaner operations, HR leaders and hiring managers often take on extra responsibilities. Payrolling partners can handle the onboarding and offboarding of employees, allowing your HR team to concentrate on more pressing business concerns.

  4. Insulation from Co-Employment Risks

    Compliance is crucial for workplace success. With a payrolling provider, all payrolled personnel are employees of the employer of record, protecting your organization from potential co-employment risks and clarifying the employment relationship.

  5. Trial Period

    Payrolling services allow you to evaluate a temporary worker's performance and fit within your organization before making a long-term commitment. Some providers, like Acara, even offer free conversion to direct employment after a set period, such as 520 hours worked.

By leveraging payrolling services, your company can efficiently manage its temporary workforce, reduce HR burdens, and focus on strategic business objectives.


Need Help?

Whether you need expertise in Employer of Record (EOR) services, Managed Service Provider (MSP) solutions, or Vendor Management Systems (VMS), our team is equipped to support your business needs. We specialize in addressing worker misclassification, offering comprehensive payroll solutions, and managing global payroll intricacies. 

From remote workforce management to workforce compliance, and from international hiring to employee benefits administration, TCWGlobal has the experience and resources to streamline your HR functions. Our services also include HR outsourcing, talent acquisition, freelancer management, and contractor compliance, ensuring seamless cross-border employment and adherence to labor laws. 

We help you navigate employment contracts, tax compliance, workforce flexibility, and risk mitigation, all tailored to your unique business requirements. Contact us today at or email us at to discover how we can help your organization thrive in today's dynamic work environment. Let TCWGlobal assist with all your payrolling needs!


Chris Mefford
Post by Chris Mefford
May 23, 2024