What Does Payroll Outsourcing Include? Clarify Payroll, Tax and Accounting Before You Hire

Quick answer: what does payroll outsourcing include?

Payroll outsourcing commonly covers payroll inputs, calculation of earnings and deductions, employee withholding tax, social security, payslips, payroll reports and data for salary transfers.

Corporate bookkeeping, VAT filings, income and expense records, financial statements and corporate income tax are not automatically part of payroll. These responsibilities should be listed separately in the quotation and service agreement.

What is payroll outsourcing?

Payroll outsourcing means appointing an external provider to process payroll using employee data, compensation policies and approved monthly inputs supplied by the company. The provider calculates and checks payroll within the agreed scope, while the employer confirms source data, policies and the final amount before payment.

• Base salary, overtime, commission, bonuses and incentives
• Attendance, leave, absence, lateness and approved allowances
• Deductions, withholding tax and social-security contributions
• Net pay, payslips and reports for HR, finance and management

Services that should be defined before work begins

Payroll packages are not identical. Some cover calculation and reporting only, while others also prepare statutory forms or submit information through government systems. Confirm every deliverable in writing.

• Employee master data, salary, start date and employment status
• Attendance, approved leave and overtime
• Gross-to-net payroll calculations
• Payslips and payroll reports
• Bank-transfer file preparation
• P.N.D.1, P.N.D.1 Kor, annual tax certificates and social-security data within the agreed scope

What is the difference between P.N.D.1 and P.N.D.1 Kor?

P.N.D.1 is the withholding-tax return used for employment and service income under Sections 40(1) and 40(2), including salary, wages and bonuses, for the relevant payment period.

P.N.D.1 Kor is the annual summary of employee income and tax withheld. Employers should check the Revenue Department’s current tax calendar each year because deadlines and online-filing arrangements may change.

How is payroll different from accounting and corporate tax?

Payroll handles employee compensation and related statutory information. Accounting and corporate tax cover the company’s wider business transactions. Although information moves between these functions, they should not be treated as one service automatically.

• Payroll: salary, overtime, commission, bonus, employee tax, social security and payslips
• Accounting: income, expenses, accounts payable, accounts receivable and bookkeeping
• Corporate tax: VAT returns, corporate income tax and other business filings
• Year-end accounting: financial closing and statutory audit

A common source of confusion: P.P.20 and P.P.30

P.P.20 is the VAT registration certificate. P.P.30 is the VAT return used in the company’s tax process.

If a company requests payroll, social security, P.N.D.1 and P.P.30, the first three relate to payroll administration. P.P.30 should normally be scoped and priced as additional accounting or tax work.

Responsibilities of the company and the provider

Clear ownership prevents confusion over who checks overtime, approves payroll, submits forms and makes statutory payments.

• The company supplies complete employee data, confirms salaries and approves overtime, bonuses and deductions
• The company reports starters and leavers, reviews draft payroll, funds payments and names authorised approvers
• The provider checks completeness, performs calculations, flags anomalies and prepares draft and final reports
• The provider prepares files or forms within scope, protects confidential data and retains approval records

A practical monthly payroll process

Set the cut-off and approval date well before payday so last-minute changes do not affect the entire workforce.

• Close attendance, leave and variable-pay inputs
• Obtain manager approval for overtime, commission and bonuses
• Submit the payroll input file to the provider
• Review questions and the draft payroll
• Obtain authorised approval
• Prepare payslips and the bank file, then make payment
• Prepare tax, social-security and accounting information and close the cycle

What information is required every month?

The provider should not guess whether a payment or deduction has been approved. Use a consistent payroll input form and identify the approver.

• Current employees, starters, leavers and effective dates
• Salary changes, attendance, leave, absence, lateness and overtime
• Commission, incentives, bonuses, allowances and reimbursements
• Deductions, tax changes and new bank accounts
• Benefits or other income that may affect payroll

Does a small company need payroll outsourcing?

Headcount is not the only factor. Payroll for 10–20 employees can be more complex than payroll for 50 employees when the company has multiple commission plans, shifts, frequent employee changes, expatriates, several entities or more than one pay cycle.

A larger company with fixed salaries and few variable items may have a simpler process. Complexity, internal capacity, confidentiality and continuity matter as much as employee count.

What affects payroll outsourcing pricing?

TalentHubTH payroll outsourcing starts from THB 2,500 per month. The final quotation depends on headcount, pay cycles and the agreed scope. Bookkeeping, P.P.30, corporate income tax and financial closing should be quoted separately unless expressly included.

• Employee count, pay cycles, entities and branches
• Complexity of earnings, deductions, attendance and overtime
• Monthly and annual tax work, social security and bank files
• Report language, revision rounds, historical corrections and processing time
• Additional meetings or custom reports

How should payroll data be protected?

Payroll records contain identity numbers, salaries, bank accounts, tax information, leave, bonuses and salary history. Consolidated reports should not be shared in group chats or folders accessible to unrelated employees.

• Define who may submit, access and approve payroll data
• Send files and passwords through separate agreed channels
• Set retention periods and a secure payslip channel
• Create an incident process for misdirected information
• Remove access immediately when responsibilities change

Checklist before choosing a payroll provider

Confirm the following items in the quotation or service agreement before processing begins.

• Headcount, payroll frequency, cut-off date and payday
• All earnings, deductions, approvers and permitted revision rounds
• Payslip, report and bank-file formats
• Scope for P.N.D.1, P.N.D.1 Kor, social security and starters or leavers
• Who submits forms, who makes payments and what happens when inputs are late
• Data-transfer controls and separately priced accounting or VAT work

Summary

Payroll outsourcing can reduce the workload involved in salary calculation, payslips, reports, employee tax and social-security information. It should not be assumed to include all accounting and corporate-tax work.

Before starting, define who supplies information, who approves it, who files forms, who makes payments and which activities incur additional fees. This reduces retrospective corrections and supports an accurate, on-time payroll cycle.

Talk to TalentHubTH about payroll outsourcing

TalentHubTH supports Thai, international and Chinese-invested companies in Thailand with payroll calculations, deductions, payslips, reports and payroll coordination within an agreed scope.

Send your employee count, pay frequency and required services for a package assessment and quotation. LINE Official: @talenthubth, telephone 066-059-9440, or email talentshubth@gmail.com.

Frequently asked questions

Sources

• Thai Revenue Department: P.N.D.1 form
• Thai Revenue Department: P.N.D.1 Kor form
• Thai Revenue Department: e-Filing guidance
• Thai Revenue Department: tax calendar