18/01/2025
9 Minutes Read
When you hear "payroll management software" - if you haven't used one yourself already - you'll likely think of it as just a payroll calculator. You might imagine it simply makes the work a little less complicated than what HR professionals do manually with calculators and spreadsheets. Well, you're not entirely mistaken. That's somewhat correct, but not the complete picture.
Payroll management software is much more than just a payroll calculator. It comes with features and functionalities you would certainly love. Would you be excited to know some of the hidden powers of payroll management software? Then keep reading to explore the powerful features and surprising benefits that make this tech a must-have for businesses today.
Payroll Management Software – What People Think and What It Really Does
For most people, payroll is software that either works in a web browser or on their computer, like Tally and helps simplify payroll processing. It’s a better alternative to using an Excel sheet. This table will provide a clear distinction between what you’ve been thinking about HR payroll software and what it really is.
| What People Think | What It Actually Is |
|---|---|
| Payroll management software is merely useful for calculating employee paychecks. | Payroll software can automate multiple processes - gross-to-net calculations, tax deductions, statutory compliance etc. |
| Payroll software can only handle general tax calculations for a specific state, and for local taxes, it requires manual input. | Modern HR payroll software can be customised to ensure each company’s compliance demands. |
| It’s not for small businesses with simple payroll needs. | Payroll software works for all types of businesses. There are tailored payroll software for small business |
| Payroll software lacks the ability to process payroll across multiple states or countries. | Many modern payroll management software can handle multi-state and international payroll, including taxes, currency, and benefits. |
| It lacks customization options to cater to the unique needs of different industries. | There are industry-specific payroll solutions that cater to various sectors - retail, healthcare, construction, etc. |
| Although payroll automates calculations, attendance and leave data of employees still require manual entry. | Today's HR payroll software integrates with attendance and leave modules, simplifying the process for payroll admins. |
Which Payroll Management Software Should You Use – Understanding the Types?
With so many payroll software options available, first-time users might struggle to decide what’s best. Whether you're a small shop or a big company, there's a payroll solution that's just right for you. Here is a breakdown of the four main types of payroll management software.
Professional Employer Organizations (PEOs)
Rather than software, PEOs (Professional Employer Organizations) are entities that do payroll on behalf of their clients. By partnering with them, you won’t have to do anything regarding payroll on your end.
Beyond payroll, PEOs can also be entrusted with all your HR-related or workplace-related challenges. Who can benefit best from these entities? Well, they are ideal for new businesses that are yet to have an expert HR or payroll team and instead want these responsibilities handled by experts.
Standalone Payroll Management Software
A standalone payroll software is one designed exclusively for payroll processing. All it does is this one function and it excels at it. It handles paychecks, taxes, and basic reporting without all the extra HR stuff. Great for businesses that just need the payroll basics and already have their HR needs covered elsewhere.
Payroll Software for Small Business
Built for small and medium businesses, this option combines payroll with some of the essential HR functions, such as handling timesheets, employee records, attendance, leave, shifts etc. As designed for SMEs, it won’t overwhelm you with complex HR software features you won't use.
HR Payroll Software (Enterprise)
The big league solution! This is for large companies with complex needs. It handles massive payrolls across multiple locations, deals with complicated tax situations, and connects with other business systems. It comes packed with several advanced HR features and can instantly and simultaneously handle payroll for thousands of employees.
Understanding the Hidden Capabilities of Payroll Management Software
When you get a grip on what payroll management software offers, you’ll wonder how you ever worked without it. Packed with multifaceted features and functionalities, these tools really tie everything together for your HR team. Let's break down what some of the capabilities would mean for businesses.
Time and Attendance Integration
Do you think payroll software only does math? Nope! If you have an advanced solution, like the modern payroll software for small businesses, you can easily make it team up with your time-tracking system. And within no time, you will have a total and accurate overview of each employee’s work hours.
Assume that you have some employees working overtime on some days, such as Sarah, who clocked in at 9:05 and out at 5:35. Beyond her 8-hour shift, she deserves overtime pay for the extra 30 minutes. She doesn't have to pursue the payroll administrator or HR to claim it because the system would have automatically calculated it based on the data it received from the time and attendance system integrated into it.
Tax Compliance and Filing
Tax compliance management and filing are not easy tasks. They are huge headaches for the HR team. If you happen to be one who often sweats over tax season, payroll management software has got your back.
With it, there is no real struggle in keeping a tab on all those tricky tax rules and handling the math. Even if there happens to be cases like a few employees getting their promotion mid-year, the system automatically adjusts their tax bracket and deductions.
Employee Self-Service Portals
Are you a frustrated HR professional dealing with employees who frequently bombard you with basic requests? Like sending payslips or making modifications to tax declarations? In 2025, you won't have to waste your valuable time on these basic clerical tasks. Employees can handle these themselves through Employee Self-Service Portals on integrated payroll management software.
These portals are brilliantly designed with intuitive UI/UX, keeping in mind the varying tech backgrounds of employees at different levels. Within just a few clicks, they can pull up their payslips, update their home address, or tweak their tax declarations.
Direct Deposit and Payment Flexibility
Are paper checks still part of your payroll process? That was a norm long ago but we have come a long way since then. Modern payroll systems are super flexible when it comes to meeting a variety of payment modes. They can be easily adjusted to organizational or individual employee preferences. Whether it’s direct deposits, digital wallets, or even splitting pay across multiple accounts, the system manages it all with ease.
Let's take, for instance, the case of an employee who wants their pay to be split into two modes: 70% to their main account for bills and the remaining 30% directly to their savings account. In this case, the payroll settings for this employee can be personalized to automatically implement this arrangement.
The Key Takeaway
At its core, payroll management software does far more than handle basic payroll calculations. Hope this blog helped you see the hidden benefits of payroll software and made choosing the right one easier.
Whether you're running a small shop or managing thousands of employees, there’s a payroll solution that fits just right. So if you're still pushing papers and pulling your hair out every payday, maybe it's time for an upgrade. And Mewurk is the solution your business needs. Get in touch with us today for the details or try our payroll software free download options.
