Payroll outsourcing is a practice where any company or business hires an external or third-party service provider to manage some or all of their payroll functions. Instead of handling payroll in-house, these companies entrust these responsibilities to a third-party specialist, who is often called a payroll outsourcing service provider. These providers are also responsible for keeping up with evolving tax rules and regulations, compliance, and finance, along with compensating or paying employees on time for the work they have done. They also ensure that the company does not face any penalties or legal issues due to non-compliance with rules and regulations.