What is Third Party Payroll System? What are the Pros and Cons of working in Third Party Payroll

Hi Friends, I have many friends who are currently working on third party payroll system and they shared their experiences with me. Most of my friends who are currently working for third party payroll companies shared the consequences they are dealing with now.

 

Third Party Payroll System Issue
Why not to work in Third Party Payroll

 

But, firstly let me take you to the pros of working in third party payroll companies and what is third party payroll system:

What is Third Party Payroll System?

Third party payroll system is basically working for a company and getting the salary from some other company. For example, working for an MNC like TCS while getting paid by a consultancy for the same (P.S. it is different from freelancers work). Also, you are not considered an employee of TCS for this. Most of the time, you will be working at client site. Now let’s see some pros of working in Third party payroll system and the companies up for it.

Pros of Working in Third Party Payroll System

  1. Benefits of Client Company

Since you will be working at client site, so there must be some occasions like festivals when the client company is providing some facilities and goods to its employees. That time, you are also benefited with those goods and services.

2. Learning Opportunities and Challenges

Working on-site, provides ample learning opportunities and challenges. It gives happy experiences to meet new people and work on different kind of tools.

3. Recognition for Good Work

If you do something very good while being on third party payroll system, this can give you a two sided rewards and recognition for it. One from the client side and the other one from the company that is paying you.

 

Recognition

 

Cons of Working in Third Party Payroll System

Phew…I could only found the two pros of working on third party payroll system reviews from my friends but the list of cons is too big..

  1.  Salary is low compared to Market Standards
  2. Not Getting Salary on Time
  3. Rewards are delayed
  4. Small mistakes are considered Big
  5. Confusion about Point of Contact
  6. HR is the only God
  7. Growth is very slow
  8. Difficulty in Job Switch
  9. Get used to words like Vendors
  10. Job Security
  11. False Promises
  12. Working on Internal Tools

Let’s discuss all these cons in my next post.

57 Comments

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  2. Hello…
    Can u plz make it clear to me, if someone working, on third party payroll and planning to switch the job. So which company name should he mention in employer”s detail in his resume while updating it for further?????

    1. Hi Aanchal, firstly thank you for stopping by. To your question, if someone is working on third party payroll and planning to switch the job he/she will have to mention both the companies in a smarter way. Something like… I work on client site with X company on the payroll of Y company. Later, focus more on your job role. Sometimes word matters and certainly saying working on client site is more attractive than saying working on third party payroll system.
      Hope it helps 🙂

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  4. Hi recently I’m going for this job. I’m confused about this job whether this is low profile job or not. Pls can u tell me about this job. So, that it becomes easier for me to move further.

    1. Hi Saraswat… firstly congratulations on getting your job. Third party payroll system is not related to job levels in any case. For example, some companies outsource technical work to other companies because they see it economically cheaper. It all depends on the kind of work you’ll get. Some companies also roll out job offers to outstanding contractors/third party candidates if they perform well. So, go ahead and take on the opportunity. You never know what happens next until you try. If this is technical kind of work, you should go for it. You’ll enjoy multiple benefits from both the companies 🙂

  5. Hi, currently I am working in a fortune 500 company under third party payroll from last 3 yrs. I am getting a chance to switch to a renowned company with 10% increment of in hand salary. It’s office is much closer to where I currently stay but the only problem is that it’s a third party payroll job. Will it be a good idea to change. Please help I am really confused..

    1. Hi Bikas, firstly congratulations on getting a new job. Job switch decision requires analysis of multiple things including your preference list like near location, product based vs project based etc. There is still a good scope of negotiation on the salary they have offered. As per Indian industry, you can ask for a normal 30% hike. This is my very first suggestion try your negotiation skills. There is always more money at HR desk you just need to try little bit :p

      Also, if the HR doesn’t agree, consider your preference. Give more interviews, there are higher chances of getting a job during notice period since there are many companies that do immediate hiring. At the end, take decision by considering growth factor, learning and your preference. Hope it helps 🙂

    1. Hi Karan, this depends on the type of work or nature of your profile that you will be doing in your third party company. It also depends on the third party company. If the third party payroll company is bad in terms of valuing the employee, it’s gonna be bad for your career in future. If the company is good, the work you will do there is lower level, then again you’ll be stuck there.

  6. Please advice me about the payroll system of ques corp, probably i am selected at pernod richard as 3rd party party payroll of quess corp, can it is beneficial for me tp join thre or not if they give 30% hike from my present ctc? Please advice me, currently i am working on direct payroll.

    1. Quess Corp is a very renowned company with employee friendly environment. One thing I noticed while working in third party companies is low pay. Other factors include the nature of your job. If your job is technical, then go ahead and join. If non technical or semi-technical do more research. Contact people with same job domain or title on LinkedIn or refer glassdoor. Then only take decision. I hope it helps 🙂

  7. Hi currently i m working in DIAGEO but it’s third party pay role… salary is too low..what should i do.please advice me what to do

    1. Hi Rajesh, there are two conditions:
      1. If you are a fresher and don’t have much experience, then keep working in the said company but try to enhance your skill set. Keep learning and once you have around 1 year of experience at least, switch your job 🙂
      2. If already experienced, look for job switch
      Hope it helps :p

      Post a comment once you switch your job 🙂

  8. Sir i have 3.5 years experience in autocad design field im not happy with current company because here i have to handle all things alone no team with me . So i decided to switch the job & i got opportunity in Johnson controls company. Im getting 40% hike & its one of the top companies in the world .But problem is that it not on role job its 3rd party payrole job should i go for it or not ? Please help me i am so confused

    1. Hi Rajesh, it’s anyway a good time to switch your job. Johnson Controls is a good company. Take feedback from the employees of the said company using LinkedIn for a better viewpoint about the nature of job and responsibilities. But I’ll advise keep looking for job side by side accepting this third party payroll hike. Hope it helps.

      Thanks

  9. Hello, i am currently working for TRIGO Group with a Payroll of Integrated personnel Services Pvt Ltd. I want to know that is working on a Third party job considered good in the resume? P.S. i am a Fresher and recently got the job.

    1. Hi Gaurav, at the end the thing that matters is the skill set you’ll doing a third party job. Even if you are not working on such good skill set tools that have good demand in job market, work on your learning procedure. Learn new languages and tools and switch job into a direct payroll company 🙂

    1. Hi Sameer, most of the ITs are currently looking for Third party payroll because of following things:

      – The project requirement is of small time and bearing a permanent team for that job is much more expensive
      – Currently IT companies want less overhead in terms of resource management and hiring procedure. Hence, they employ third party people to do this staffing thing for them. However, seeing on candidates perspective this becomes very bad for employees. They get pennies while their actual salary is too high.

  10. I got a new Job in Bhubaneswar, Odisha location for Tech Mahindra but its 3rd party payroll. Current company is stable but salary is less as compared what offer by 3rd Party, almost 70% hike they provide.
    But thing s that I confused should I go for or not, only job security will be on mind that if the project will be only 6-9 months then after it will difficult because in this location less company are there with less opportunities. I have 6.5 years experience, Please suggest.

    1. There are two things you should keep in mind before taking any decision on this:

      1. Do you skill set have that demand in job market?
      2. Can you quickly switch jobs?

      If not, considering this 6-9 month contract is very risky for job switch. Just keep this offer in hand and increase your frequency of job search rather than opting this third party payroll job.
      Best of Lcuk 🙂

  11. Hi, I am in a govt. organization on contract with core Content and CMS work. It has been 2.5 yrs there. Now i just got an offer from a third party Experis IT for a renowned MNC as client. I am very excited for the the MNC but also very confused about the security and salary. Please suggest.

    1. Hi Ritika, Since you were already working in a Government job role. Considering that, I’ll suggest you to look for the following things:
      1. Job security condition in the current job role. Will that government contract ever going to be converted into a permanent job role.

      – If 1st is a very small job role and no security, you can opt for the third party payroll job system.

  12. Hii The Mystery Solver. I recently got a call for third roll paysystem and i am a complete fresher. They are paying me too low salary. Please give me a suggestion what should i do . Should i wait for other job offers or should i accept their offer and should work with them ? They are asking for immediate joining from next week and tomorrow is the interview.!

    1. Hi Vinayak, if you are a fresher just go for this offer. Once get some industry exposure. However, keep looking for further job opportunities into a permanent job role. Best of Luck!

  13. Hello,
    I’m highly impressed with your article.
    Im in hectic confusion of choosing a jobs amongst my 2 offer letters.

    1. Is social media analyst of Accenture with a third party payroll of Pyramid IT solution. And I have to work in Google client location. With a lower package

    2. Is same social media analyst with regular payroll of Noon.com, Emaar company is its parent company. But This has a 50k package more than the third-party + Accenture alliance

    I’m confused of choosing the best. Please help me with this 😭

    1. Hi Vamsi. Sorry if I am late for replying on this. I would highly recommend going for the second option. Go for Social media analyst role with Noon.com. For future job roles, it always matters what skills you acquire. As per my understanding, you won’t get much to learn. Thanks

  14. Hi
    I am working with Broking firm on payroll
    Now I got offer for AMC on third party pay roll of TEAMLEASE
    SHALL I JOIN AND IF YES THEN HOW IS TEAMLEASE AND EXPERIENCE WILL BE COUNTED OR NOT

    1. Hi Soyel, congratulations on new job offer. Since you are already experienced, would like to mention few things that you can consider before doing a good job switch. If are making a skill change in your job, go for it.
      If they are paying good hike go for it but keep looking for job switch to a permanent role and not to the third party payroll.I hope it is clear now 🙂

  15. Hi sir I’m fresher mechanical engineer. I have got two offers one of from third party payroll in NTPC and 2nd one from company payroll in thermal power plant with low capacity and salery.
    So please suggest me that which one is better to work?

    1. Hi Krishna sorry for the late reply. I read about your job situation. Firstly congratulations. Job in NTPC is good you will get exposure however I would suggest you to go with the company payroll of thermal power plant (2nd option). With big MNCs you learn a small about a big project but with a smaller company you learn a lot. Also there are chances of growth. Hence go with the second option. Thanks

  16. Hi,am poulomi, currently am having two years of experience,while am looking for job change ,I got schinder offer but third party payroll,yea here scope of work is better that my current company,as well as hike is also good but am confused I should go for third party payroll or not?

    1. Hi Poulomi, firstly congratulations on job offer. Considering your work experience and the hike you are getting, I would suggest you to happily accept this third party payroll job offer. If you didn’t like the company you can simply try for another switch after sometime and then next time you will get hike on this appraised salary 🙂 wish you luck

  17. HI, I am working with a LLP firm in tech department (on roll) but as per my process, i never go to office because i support US team (working in US shifts), so its completely work from home, Now i got one more offer from another organisation but on third party payroll. but new offer giving me 25% salary hike and complete day shift.
    Should i join them or stay with my current organisation.

    1. Hi Arun, everybody has preferences. If you don’t want to do night shift, opt the current offer for a switch in your career. The other factors in your case would be how much time has you spent in the current company, if that’s not much you can still try for some other good opportunity. Hope it helps 🙂

  18. Hi,am offered a job of gearbox project & sales engineer in a top American MNC under Teamlease Payroll. I have around 1.5 years of experience and my current salary is quite low. But since the offered job is outstation and requires relocation on my part,please suggest ways as to how I can negotiate a good salary and whether the third party payroll will count as experience for my future career?
    And also is a sales engineer job is third party payroll at all stable?
    Hoping for a quick response.
    Thanks in advance.

    1. Hi Bitan, I have always been very skeptical about stability factor in sales jobs till the time you reach some good position. If they are providing you a good hike, it is good to join else enhance your skills and look for further opportunities.

  19. Hi The Mystery Solver,

    I have just interviewed with Tata Power SED on a third Party payroll. I have 3.6 years of experience in the field of Artificial intelligence and currently, I am working in a startup(7 months here as of current date ) but here the management and the office politics sucks. It drains all my energy and passion to work. People do not trust each other.
    With all of the bad things happening around I have been trying to focus on positive things, like writing blogs, learning new concepts but now I am depressed. I have interviewed more than 20 companies (most of them are startups) in the last 2 months but I do not want to join a startup because of zero company vision, mean management, and inexperienced founders.
    I am really having a bad time here. So as I wanted to switch in an MNC now I have an offer from Tata power SED but on third-party payroll. Please help me. I am extremely tired looking for a dream Job from past 4 months. What do you suggest?

    1. Hi Tinky… First of all drink plenty of water and take a chill pill girl 🙂 As per the description of the life hurdles you are facing these days, this scenario is pretty common in the cruel corporate life. And no matter where you go..the situation becomes the same in each and every company after some time. It’s on us how we control things. We should not let these things get heavy on our head. Looking at your situation of depressing moods, I would suggest you to go and grab this offer by taking one more MNC’s offer in hand. Then do not settle on an MNC’s offer in this depressing mood. Compare the two offers. Even if by bad luck, you couldn’t get one more MNC offer, go and grab this MNC’s offer. At last, we all want a peaceful mind. Though not for a long time, but your mind will take a little nap of relaxation with this change of Third party payroll system. And who knows, may you start liking the MNC structure (P.S. – MNC gives you a work life balance)

      And yeah, take a little break girl and go on a trip 🙂 Always there and happy to help.

  20. Hi.
    I am a final year ECE student . I have an offer for a third party payroll job from Siemens for sales and maintainance.
    I am confused . Help me

    1. Hi Shivam. Since you are a final year student and fresher. I am not sure about the placement opportunities of your college. So if you belong to a private engineering college and more companies are not coming your way… I will suggest go and grab this job offer. Siemens is a good company and you will learn a lot.. 🙂 After gaining considerable experience you can switch your job then.
      Hope it helps 🙂

  21. Hey, I wanted to get some advise from you, so I have following offers in my hand :
    – Third party payroll, permanent with Mits consulting Pvt Ltd, and client is BNP Paribas, location is near my house. Mits is providing me 40% hike on my current ctc
    – Capgemini, they are providing me 15% hike and location is Airoli, which is 1hr 20 mins from my house, malad.
    I don’t know what to do, the mits is providing a lot of employee benefits like If there is no project, they will pay me for 2 months on bench period, 21 days leaves, App development project with bnp.
    If I work with Mits, and switch later, will my experience with bnp count, will ppl consider it as a valid experience and would give me a decent amount to join?
    Is Mits Consulting a good company, that I can trust?

    1. Hi Mansi, firstly congratulations on your job offers. Both the offers are good. Looks like distance plays a big role in your case. I would advise.. First write down your priority list on a paper according to which you will choose a job offer out of so many. Then check, which one of these two job offers – third party payroll system job or permanent job carries the most items as specified in your priority list.
      – Two more things before accepting a job offer is:
      – Have you ever worked with a big company I mean a brand name?
      – The company gives you learning opportunities

      I will suggest opting for third party payroll job with Mits consulting if job security is not a concern for you. (Considering the client is one of the top banking firm). Also they are providing good hike. If you do not like the job make a switch…

      Else capgemini is a good company to make a switch anytime 🙂
      I hope this helps.

  22. I am bsc it and doing first job as Noc engineer in Tata Communication Pune on third party pay roll from six months. I decided my carrier in net working so I am also preparing exams of Cisco. Further to do executive MBA after two yrs working experience. But my question is third party pay roll experience helpful in future

    1. Hi Sandeep, since you are already in your desired field and learning the required skills from your third party payroll system job, this would be definitely helpful for you. Keep on moving the path you have chosen 🙂

  23. Hello, I need help in deciding between the two job offers. Firstly, I worked as a senior associate position with a reputed Ecommerce company and am switching jobs. One offer letter is from a third party payroll company for a startup and the other is permanent employment with an reputed e-commerce.. Both offer good salary. However the permanent employment company is giving a lower position than my previous position. So I am very confused which one to choose. I am running out of time and need to decide soon. I don’t have any other options than these two. Really need your advice.

    1. Hi Sowmya, looking at your condition I will say write down your priority. While working for a startup is good for your career in terms of learning opportunity as well as growth factor, this can lead to burden and job stress as well. Since you have worked in a reputed firm before, assess yourself if you really want to join a startup and willing to do more hours a day then definitely go for a startup. Else go with the reputed firm because that is a permanent job role. You can always ask for the designation change if you deserve that in the reputed firm.

      My option would be to choose offer of a permanent job role from the reputed eCommerce company rather than a third party payroll job of a startup. Designation makes no difference till the time you can justify your work in another interviews :p

      Please let me know your decision by commenting here 🙂

      Thanks,
      The Mystery Solver

  24. Hi mystery slover myself Shashikant Patil. I got a job in Robert Bosch it was very tough to clear the rounds however my lick I cracked the interview. I want to just understand what would be the third party payroll and I ambit Confused lot off thinks are running in my mind.
    Please help me.

    1. Hi Shashikant, Firstly congratulations on your job offer. Third party payroll system is a system wherein you work in a client company and some other company pays you. Third party payroll system is in a lot demand these days because of multiple reasons. The client company may not require the permanent employee because of short duration of project or simply to avoid any headache related to hiring procedure. However, we suffer with less paycheck and job security issues with this third party payroll offer.

      However, one shouldn’t always look for the negative sides. If you are a fresher, then third party payroll job can make you learn a lot and you can avail the benefits from both the companies. Choose you options basis job security, the skills required in the job as in what value you are going to add to your career and obviously Money factor. Since if no money, no use of working too hard… you will get frustrated at the end.

      Let me know if you have any further queries 🙂

      Thanks,
      The Mystery Solver

  25. Hii mMystery Solver this is avinash, i was working as a account executive in bangalore which is a KPO, i left the job there and i had a 8 months gap recently i moved to mumbai and gave interview and selected for third party payroll hljob, phoenix is client company and ASL hr solutions is another company as i have accounting experience in previous comapny, now working in third party pay roll is worthy?
    Please give a reply i am totally confused

  26. Hi Sir,

    I got a job offer to work on a 3rd party payroll and I will sitting and working for TCS. Its offering me 48% hike on my last in hand salary. Also i have 3.9 years of work experience and post that i have 1 year of not working gap due to some personal reasons. I have few questions regarding this job offer- 1. Will 3rd party payroll job experience be counted? 2. Will i get my salary on time? 3. Will there be chances of getting permanent with TCS once the project or contract is over? 4. Should I really join 3rd party payroll job?

    Please help me immediately as they are asking me to join in 1 week.

    Thanks

    1. Hi Sanch…after analyzing the situations you have mentioned. I would suggest go with the offer. TCS is a good company and the hike they are providing is good. Whether you will get a permanent role or not, it totally depends on the company norms and your performance. Ask the HR if there is any chance to be permanent on TCS payoll. Overall, I will say grab the offer.

      In case of job security issues, please keep on enhancing your skills and move on to a direct payroll whenever required 🙂

      Thanks

  27. Hello Sir,

    I am a fresher in FMCG sector and a job in Pidilite on a third party pay role. The third party pay role is Teamlease. So sir I am confused wether it will be a beneficial for my career in future? If I experience 1yr in FMCG can I switch to direct payroll in another company.

    1. Hi Suman,
      Considering you are a fresher it is a good opportunity to start working with the third party payroll and gain some experience. Later on, you can move to some other company with direct payroll after gaining some experience 🙂

  28. I recently got a job in third party payrollsystem and I am a complete fresher. They are paying me too low salary. Please give me a suggestion what should I do and the client company is oracle. Do I get good opportunities if I want to switch to other companies and when I switch to other companies from which company.Should I wait for other job offers or should i accept their offer and should work with them ? They are asking for immediate joining .please,help me on this regard.

  29. I recently got a job in third party payroll and I am a complete fresher. They are paying me low salary. Please give me a suggestion what should I do and the client company is oracle. Do I get good opportunities if I want to switch to other companies and when I switch to other companies from which company my experience will be considered either client company or payroll company .Should I wait for other job offers or should I accept their offer and should work with them ? They are asking for immediate joining .please,help me in this regard.

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