In this article, we will discuss what payroll software is, what it should include, and its many benefits. Let’s get started.
Payroll can be a complicated task. The process is far more involving than simply paying staff their wages. A good payroll software will include the ability to pay taxes and National Insurance contributions with ease. It will also ensure that a workplace stays on top of any statutory or legal requirements they have to follow.
The days of completing payroll by hand are long gone. These days, most businesses utilize payroll software to make the task more manageable.
What is Payroll Software?
Payroll software is a software application that provides various payroll solutions. One of the fundamental things it will do is to calculate and distribute wages to employees. It may also send money to other interested parties like regulatory boards and the tax office.
The software will automate many of the tasks of payroll. All it will need to do so is the input of various variables throughout the month. It will then complete the payroll and distribute monies accordingly.
Payroll software should also be able to automatically consider all legal and tax obligations. This is vital for preventing issues that can disrupt the harmony of a workplace and cost both time and money.
What should a Payroll Software System include?
There are many payroll solutions available. Each of them offers core payroll functions as well as various other processes. A good payroll system should include:
- A way to automatically pay money to employees and other interested parties. There’s no point in having a payroll system that forces you to start bank transfers manually. This is the key part of any payroll software.
- It should store information about tax codes and National Insurance for employees. These should be easily amendable if required to keep them up to date.
- A way to record tax details of the business. Nearly all payroll systems will record business tax details and obligations. Some will tally how much tax you need to pay. Others offer the ability to pay tax directly and automatically. All these features are desirable for most employees.
- A way to manage employee holiday and sick pay. Many modern payroll solutions will have HR functionality. This can be a great time saver for a business.
- A way to process expenses. If your employees claim for out-of-pocket expenses, the payroll software will need to handle this. If not, you may find taxes and National Insurance contributions are incorrect.
- A simple way to add new employees and remove those leaving your employment. People join and leave your business all the time. Payroll software should make adding new employees and removing leaving one’s easy.
Benefits of Using Payroll Management System
There are many benefits to using payroll system, including:
- It reduces the need for an HR team.
- It automates many payroll processes and accounting. This can include things like paying tax and National Insurance.
- It reduces the cost of IT. Payroll software is usually self-contained and requires no tinkering by an IT team.
- Many are cloud-based for easy access from any device anywhere in the world.