Payroll software is an all-inclusive tool designed to manage employee payroll, taxation and time management. Often, Payroll Software is part of Human Resource Management or Enterprise Resource Planning application, but vendors also often sell payroll software as a stand-alone system.
Payroll software automates the process of paying salaried, hourly and contingent employees. Payroll software is increasingly a central component of integrated, multifunctional Human Capital Management (HCM) systems. Compared to paper-based systems, payroll software significantly speeds the payroll process while reducing errors and enabling managers to more easily customize paychecks for individual 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 features
Standard functions in most payroll software systems include automatic calculation of deductions for withholdings, such as taxes, insurance and retirement contributions. Payroll software also commonly processes direct paycheck deposits, generates tax forms and deducts wage garnishments. Payroll administrators can also configure systems to print checks for employees not enrolled in direct deposit.
Many payroll systems include self-service capabilities that enable employees to view and download payroll checks online on mobile devices and computers and to change deduction amounts. Some payroll software systems are also configurable by HR administrators and IT staff, enabling them to adjust accumulations, balance periods and balances and to place workers in various pay groups.
Other payroll management features include setting gross-to-net income and running payroll balance and calculation reports. Some payroll systems work with payroll data analytics modules that can create customized audit reports and track local, national and global payroll spending trends.
The obvious use of any payroll software is overall payroll management. The automatic calculation of wages on a preset schedule is a huge advantage. Often this capability will need to be set up manually. However, after set up, the system is able to run the payroll process with little additional effort on your part other than occasional customizations.
Time and Attendance Tracking
For any business that pays employees an hourly wage, the ability to track time and attendance can be the most beneficial ability of payroll software. A system that combines payroll and timekeeping eliminates all the hassle created by tracking employee time cards. These types of systems can monitor absences, sick leave, hours worked, overtime and other factors. Then, these systems can seamlessly sync this information in order to efficiently process payroll.
Let’s face facts, tax law is dull and confusing. It’s all too easy to misunderstand state and federal tax laws, much less stay on top of social security requirements. And it certainly doesn’t help that these laws can change frequently. Herein lies yet another benefit of payroll software.
Many payroll software systems update automatically as tax laws change, taking the boring and often confusing legal reading off your hands. Additionally, when it comes time to file tax forms your payroll software might be able to fill out the forms for you, depending on the system you choose. Though you’ll likely still have to sign the forms yourself, your system can help you remember when it’s time to file — saving you the headache of filing for extensions or paying penalties for missing a deadline.
Why do organizations use payroll software?
Millions of organizations worldwide rely on payroll software to streamline and manage employee compensation and ensure:
- Timeliness and accuracy. Especially with mergers and acquisitions, new hires, and shifting regulations, payments to employee can be complicated and time consuming. With payroll software, organizations can be sure that employees are paid the right amount and on time, every time, helping to build employee trust and confidence.
- Transparency. For most organizations, personnel costs are the single highest expense. Payroll software integrates with other lines of business, such as finance and accounting, providing transparency that helps organizations stay on budget, create timely reports, and plan for the future.
- Flexibility to adapt and scale. When business changes, payroll software makes it easy to adapt. For example, when an office opens in a new region with different taxes and regulations, the software automatically incorporates the new rules, so data does not need to be entered for each employee.
- More time for high-level tasks. Compared to manual and outdated alternatives, payroll software can save organizations hours each month—time that can instead be devoted to other critical business initiatives.
Country-specific payroll software
The largest payroll software vendors provide customized systems for the U.S. and some other countries using local currency and by processing those countries' taxes and other compliance obligations.
ADP offers payroll services in more than 120 countries, according to the company. Workday has payroll systems for Canada, the United Kingdom and France, in addition to the U.S. Ceridian has versions for the U.S., Canada and the U.K. Ultimate Software has versions for the U.S. and Canada.
Some HCM vendors, such as SAP, rely on third-party, independent, multicountry payroll outsourcing (MCPO) vendors to provide payroll services in countries for which they don't have native versions.
Generally all business applications have a problem as legislation is different from country to country. Because of that, the most of them requires some localization for specific country or region. But even that in regular ERP, there is not a lot of different legislations. But on the other side, differences in payroll related legislation between countries are really huge and it is really very rare that one system can cover more countries. Often there is one part about calculation and it can be common, but the other part about taxes and insurances calculation is almost every time unique for just one country.
Payroll solutions can differ from country to country and it is very complicated to make the list of the leading payroll software. Sometimes there are some extraordinary solutions on a small market, and even if they are amazing they can be unknown for the most of companies. Because of that we want to encourage you to add more solutions on this list. Anyway, currently this is the list of the leading or the most popular payroll solutions:
- 3i Infotech
- APS Payroll
- EPAY Systems
- Intuit Payroll
- iSolved HCM
- Patriot Payroll
- Payment Rails
- Peterborough Software
- Ramco Systems
- Vibe HCM
- Wave Accounting