Payroll software is an on-premises or cloud-based solution that manages, maintains, and automates payments to employees. Robust, integrated, and properly configured payroll software can help organizations of all sizes maintain compliance with tax laws and other financial regulations, and reduce costs. This frees human resources (HR) teams from routine tasks so that they can spend more time on planning, budgeting, and other business-forward initiatives.
Payroll software integrates with other core business systems to ensure that employees receive accurate, on-time compensation in the appropriate manner (such as direct deposit, check, or payment card). Employees can typically access the software to edit their personal information, payment preferences, and other details.
For employers, payroll systems need to be reliable, easy to configure, and flexible enough to manage and automate payments to workers of all types (including salaried and hourly employees, temporary and gig workers, and others), at different locations around the world. Payroll systems should simplify tasks, making it easier for staff to manage complex rules, payroll flows, and checklists, and maintain compliance with tax laws and other financial regulations.
Millions of organizations worldwide rely on payroll software to streamline and manage employee compensation and ensure
The benefits of implementing an efficient, compliant, and configurable payroll software solution go beyond the tactical tasks of paying employees. It also helps organizations
Payroll software is not only good for business. It’s also good for employees. It helps ensure that employees are paid the right amount, at the right time, via the payment method they prefer—all with a minimum of time and hassle.
Employees can also take advantage of user-friendly interfaces to view their payment history and easily adjust their personal information and payment preferences. If they have questions, they can get answers quickly, minimizing work disruptions.
Payroll software can be based on-premises or in the cloud. One of the key benefits of cloud-based payroll systems is that information can be accessed from anywhere, via a desktop computer or mobile device.
The best payroll systems provide a simple, consistent experience across platforms. When an employee looks at the dashboard on their phone, for example, it looks the same as it does on their desktop, with intuitive interactions that reduce the need for help desk calls.
Automation is another far-reaching benefit of cloud-based payroll systems, which often have artificial intelligence (AI) built in to anticipate needs and reduce errors. Common processes such as onboarding new employees can be automated so that every new hire for a given position is onboarded properly, following the same checklists and processes and ensuring that nothing is missed.
Payroll needs and requirements are constantly changing, so it helps to have a cloud-based solution that’s continually updated to comply with local, regional, and federal laws, taxes, and regulations. When new legislation is passed, your staff does not have to input changes manually; instead, the system automatically incorporates the changes to ensure continuing compliance.
Cloud-based payroll systems typically come with preconfigured options, but they also make it easy to configure and customize workflows and checklists as business needs change. On-premises solutions can quickly become disorganized and riddled with errors as new roles, pay structures, and other complexities are added. Cloud-based systems, though, scale easily, maintaining simplicity no matter how many deadlines, approvals, task owners, and dependencies are involved in a given payroll process.
Payroll software eliminates many of the headaches associated with taxes, compliance, and other regulations. It ensures accurate and timely payments and tax deductions by locality, automatically adjusting to differing rules and regulations as employees move and offices open or close. During mergers and acquisitions, employee information can be transferred easily and complexities such as one-off payments can be generated automatically.
The integration and automation of payroll systems are critical to simplifying tax preparation and audits. Organizations often outsource tax preparation, making it essential to have integrated payroll software that provides a single, updated view of both in-house and outsourced information. This allows employees, auditors, and payroll administrators to easily review and monitor any possible discrepancies. Automation also enhances the accuracy of the data used in audits, which simplifies compliance with tax laws and other regulations.
Cloud-based payroll systems provide a high level of security, another critical factor for compliance. While manual processes may contain errors, such as an employee who remains on payroll after the employee leaves the organization, the automation of payroll systems helps prevent and identify errors. Rules-based and role-based validation can further enhance security by limiting access to sensitive information.
Payroll can be complex, both for organizations and employees. It’s therefore essential that payroll software be easy to use, with a simple, consistent, and secure interface accessible by employees and payroll staff from a variety of devices.
Payroll administrators should be able to configure the system without coding or calling for help from IT professionals. The software should have best practices and recommended formulas built in, guiding nontechnical staff through a few simple steps to configure the system according to the specific needs of the business.
It’s important to look for payroll software that features embedded business intelligence and reporting features that simplify talent and workplace management, budgeting, and other strategic processes. With increasing complexity related to mergers and acquisitions, as well as the number of remote employees, gig workers, and one-off projects, it’s critical that payroll systems provide deep visibility and support for business intelligence.
Perhaps most important of all, organizations need to select a payroll system that secures sensitive data from accidental and purposeful attacks that may come from inside or outside the organization. Payroll administrators and employees should have access to the data they need—no more and no less. Rules-based and role-based validation is essential to protect the organization and employees.
When you’re ready to invest in a payroll system, be certain to evaluate providers by asking
In the years ahead, expect to see payroll systems become more adaptable to the growing diversity of work roles and payment structures. Nine-to-five salaried employees are increasingly going to be joined by a variety of wage earners and gig workers, many of whom will work remotely.
Having flexible payroll systems will be imperative to providing compensation in a variety of ways, including by project, contract length, and various pay periods (weekly, semimonthly, monthly). AI and business intelligence will be used to enhance automation and streamline workflows.
Security will be a continuing challenge for organizations of all sizes. Rules-based validation and roles-based data access will be essential, especially as more people work remotely.