The global payroll outsourcing market revenue was around US$ 11.3 billion in 2023 and is estimated to reach US$ 21.2 billion by 2032, growing at a compound annual growth rate (CAGR) of 7.2% during the forecast period from 2024 to 2032.

Payroll outsourcing is when an organization utilizes a third-party service provider to manage the compliance and administrative tasks related to employee pay. Relying on the payroll outsourcing firm may involve filing payroll payments and taxes on behalf of the organization. Many companies prefer outsourced payroll services due to the time-consuming and manual nature of these tasks.

Factors Influencing Market Growth

- The payroll outsourcing cost lowers the requirement for training in-house payroll staff. Also, it clears the cost of maintaining and purchasing a costly payroll system. Thus, these are some of the factors that drive the growth of the market.

- The high cost of outsourcing payroll and handing over sensitive and confidential staff information to third parties is a major factor restricting the growth of the payroll outsourcing market.

- The upgradation of payroll outsourcing services by organizations to become more efficient is anticipated to deliver lucrative growth opportunities for the payroll outsourcing market during the forecast period.

Impact of COVID-19

The impact of the COVID-19 pandemic had a positive influence on the payroll outsourcing market as most of the organizations were functioning remotely, therefore it was challenging for payroll managers and HR to function on the observation tasks associated with payroll. Thus, most of the organizations moved their focus to payroll outsourcing provider for managing their payroll-associated activities. Also, as there was a high possibility of the spread of the virus, payroll outsourcing effectively decreased the face-to-face dealings among employers and employees connected to payroll.

Regional Analysis

In 2023, Europe dominated the global payroll outsourcing market in terms of revenue. This is attributed to the growth in demand for real-time data access and the rise in usage of mobile and cloud-based applications in the region. Also, businesses are funding cloud computing due to aligned government rules, which gives lucrative growth opportunities for the market in the future. In addition, key market players are always functioning to enhance the process of systems and regularize administrative tasks to confirm productivity and efficiency, which is propelling them to pick payroll outsourcing.

Leading Companies

The leading prominent companies profiled in the global payroll outsourcing market are:

- ADP, Inc.
- CloudPay
- Deloitte Touche Tohmatsu Limited
- Gusto
- HCL Technologies Limited
- HRMantra Software Pvt. Ltd.
- Infosys Limited
- International Business Machines Corporation
- Intuit Inc.
- KPMG
- Paychex Inc.
- Sage Group plc
- Vision H.R.
- Workday Inc.
- Zalaris ASA
- Keka Inc.
- Papaya Global.
- Other prominent key players

Segmentation Outline

The global payroll outsourcing market segmentation focuses on Type, Business Size, Industry Vertical, and Region.

Segmentation based on Type

- Hybrid
- Fully Outsourced

Segmentation based on Business Size

- Small Business
- Medium Business
- Large Business

Segmentation based on Industry Vertical

- BFSI
- Consumer and Industrial Products
- IT and Telecommunication
- Public Sector
- Healthcare
- Others

Segmentation based on Region

- North America
- The U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Netherlands
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Singapore
- Rest Of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa