If you’re leading payroll in a large organisation, you’ve probably wondered: should we outsource payroll or move to a fully managed service? The two terms are often used interchangeably – but there are important differences that affect compliance, control, and cost.
This guide breaks down outsourced payroll vs fully managed payroll so you can decide which model best fits your organisation.
What is outsourced payroll?
Outsourced payroll means handing over some or all payroll functions to a third party. In many cases, this approach still leaves certain responsibilities – like compliance checks, reporting, or data management – with your internal team.
It works best for smaller businesses or those that want to retain more control while offloading repetitive tasks. However, this shared-responsibility model can sometimes introduce inefficiencies or compliance risks if roles aren’t clearly defined.
What is fully managed payroll?
A fully managed payroll service takes end-to-end responsibility for payroll. That includes:
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Running gross-to-net calculations.
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Processing payments and deductions.
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Managing compliance with AU & NZ legislation.
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Maintaining employee pay records.
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Producing detailed workforce reports.
With Affinity’s fully managed payroll, enterprises also benefit from:
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Automated compliance and error checks.
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Employee self-service for payslips, leave, and personal data.
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Workforce insights through advanced reporting and analytics.
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Local AU & NZ payroll expertise.
This approach ensures your payroll is accurate, compliant, and efficient – without placing the burden on internal teams.
Outsourced vs fully managed payroll – key differences
| Feature | Outsourced Payroll | Fully Managed Payroll |
|---|---|---|
| Control | Some functions stay in-house | End-to-end responsibility with vendor |
| Compliance | Shared — higher risk of gaps | Vendor-managed with AU/NZ expertise |
| Technology | May use basic tools | Advanced SaaS payroll + self-service |
| Best For | SMEs or partial handover | Enterprises with 250+ employees |
| Employee Experience | Limited | Self-service, transparency, Pay on Demand |
Why fully managed payroll is ideal for enterprises
For large organisations, payroll complexity grows fast – with multiple entities, awards, and compliance obligations. A fully managed service ensures accuracy, reduces administrative overhead, and frees up HR and finance teams to focus on strategy.
Affinity has over 30 years’ experience delivering enterprise payroll services in Australia and New Zealand, trusted by organisations across retail, healthcare, and professional services.
Next Steps
Still unsure which model suits your organisation? Let’s talk.
Explore Fully Managed Payroll
Compare Supported vs SaaS Payroll Options
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FAQ
Q: What’s the difference between outsourced and fully managed payroll?
Outsourced payroll often means partial responsibility, while fully managed covers end-to-end processing, compliance, and reporting.
Q: Which payroll model is better for large organisations?
Enterprises with 250+ employees benefit most from fully managed payroll, as it reduces complexity and compliance risk.
Q: Does fully managed payroll include employee self-service?
Yes, providers like Affinity offer portals for payslips, leave, and personal data management.
For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.
