Managing Employee Pay with Payroll Software

Managing employee pay within your business is an essential task to complete. Whether your business is small with only five employees or larger with hundreds, it is important to have a well planned system in place to ensure that all employees are paid correctly. Calculating pay manually can cause stress and can lead to errors. Using payroll software can help.

This will allow your business to manage your employees’ pay, calculate deductions, and keep everything organised. Your business owners and HR team can save time on their payroll tasks. Choosing the correct solution will also help to keep your records accurate and keep your employees informed.

What is Payroll Software?

Payroll software is a digital solution to help manage your employees’ pay. This includes calculating their pay, processing deductions, creating payslips and keeping their payroll records.

Depending on the features available, you can also use this to manage attendance, holiday leave, taxes and self-service for employees.

For example, if your business has 20 employees you can use this software to calculate their monthly pay depending on how many hours they worked, overtime, bonuses and approved deductions. This means there isn’t as much manual work involved.

Why do businesses need Payroll Management?

If you have a very small business then you could manually calculate your employees’ pay. However as your business grows, so will your payroll. You will have more employees to manage meaning you will have more records to keep. This can include:

There are several key reasons why your business would use an automated payroll system.

1. Save Time

Calculating each employee’s pay can take a long time, especially if they have differing working hours or payment methods.

With an automated system you can save time on repetitive calculations. Your HR professionals will have less time spent on administrative tasks.

2. Accurate Pay

Even small mistakes with calculations can cause confusion between your employees and employer. If overtime isn’t calculated correctly, allowances aren’t added or deductions are wrong then this can affect employees.

Automated calculations will help to reduce common errors. However it is important to double check your payroll records before paying.

3. Keep Records Organised

Keeping records on your employees in spreadsheets and paper can become complicated.

Using a centralised system will help you keep key information including:

• Employee name and contact details
• Job role and pay
• Attendance and hours
• Holiday balance
• Pay history and payslips

This makes it easy to find and update.

Key Features to look for

Depending on your business, you may need different features. A smaller business may just need basic payroll functions whereas a larger business may need more detailed reports and integration with their HR.

Consider the below features:

Automated Pay Calculations

Ensure that the system will calculate your employees basic pay, overtime, bonuses, allowances and deductions accurately. It should also be able to manage different pay periods such as weekly, fortnightly or monthly.

Taxes and Deductions

You will need to manage the correct taxes and any other deductions within your business. Ensure that your platform can manage the relevant taxes and that deductions are clearly recorded.

If your company operates in Pakistan, ensure that the system can manage your local payroll. This includes income tax and provident fund if applicable.

Payslips

Ensure your employees can view clear payslips showing what they have been paid, any deductions and their total pay. Having the payslips digitally will also reduce any paper work.

Attendance and Holiday

By using attendance management within your payroll system you can calculate how many hours your employees have worked, overtime and unpaid holiday.

Reports

Having reports will help your managers to know how much they are spending on employee pay. They can compare how much they are spending monthly and can review their payments.

How to choose the correct Payroll System

Depending on the size of your company, budget, industry and daily needs you will need to choose the correct solution.

Think about what issues you are trying to solve. If you are spending a lot of time calculating pay then choose an automated system. If you are struggling to manage your employee records then choose a system which will help manage the data centrally.

Consider;

• Easy to use – Choose an easy to understand system.
• Size – Ensure it can support your current number of employees and future growth.
• Security – Choose a system with security features, access control and backup.
• Integration – Can it integrate with your accounting, attendance or HR.
• Customer Support – Choose a system which offers good support.
• Cost – Compare subscription costs, employees allowed and any extra costs.

It is also helpful to have a demo.

Benefits for Small and Growing Businesses

Many small businesses don’t have a large admin team. Often the business owner will manage the payroll. This can be made easier with an automated system. For example, if your business is growing you can link your employees attendance to their pay. When you come to do your monthly payroll it can help you calculate how many hours they have worked, approved overtime and deductions.

As your company grows, having a scalable system will help you add new employees and complex pay.

Common Mistakes

Whilst using an automated system, it is still important to have a good payroll system in place.

Don’t make the following mistakes;

• Incorrect employee pay data
• Not keeping up to date with tax changes and employment laws.
• Not updating attendance and holiday.
• Giving unecessary employees access to sensitive pay data.
• Not checking your payroll.

By regularly checking your payroll and ensuring your employees data is up to date you can keep your payroll accurate.

Final Thoughts

You don’t need to complicate paying your employees. Choosing the right payroll system will help you calculate pay, keep records organised, reduce admin and ensure accurate pay.

Compare the features, security, cost and local compliance of the system. Choosing something that will fit your business needs will make payroll easier for you now and prepare you for future growth.