Best Practices for your Payroll Management System



Whether you have 15 or 1500 employees in your company, it is always better to use an automated payroll management system instead of calculating payroll manually in your company. You can manage your large or small business payroll, using the best practices of a payroll management system . If you are a large organization then automation of your payroll management process is must. An automated payroll management system allows you to keep yourself free from the burden of legal and regulatory responsibilities as an employer. A good payroll management system not only takes away your legal and regulatory responsibilities but also saves approximately 35% of your HR department’s time that goes waste in manual payroll calculation.

Payroll Management System: Best Practices

Some of the best practices for payroll management in your company are:

Classify your employees for payroll management:

You may have different types of employees working in your company. Some employees may be permanent, some on contract and some on daily wage. You must clearly classify the employees of your company. Wrong classification of employees may result in wrong calculation of tax exemptions and violation of the Labor Standards Act.
The best practice is to have a clearly defined policy for payroll calculation of each type of employee. In addition, the payroll management system that you use should be capable of handling all kinds of payroll in your company.

Use an integrated payroll management software:

A payroll management system that integrates various business processes such as: time and attendance system, human resource management system, leave management, tax reporting, and employee exit process is capable of maximum ROI (Return On Investment) as compared to a system that only calculates payroll. A small business Payroll management system that is integrated with other modules can also be used.

Verify correct data transfer to your payroll management system from integrated applications:

If your payroll management system is integrated with other systems, ensure that all the data connections are transferring data correctly to the payroll management system. If you are processing payroll manually, double-check all paperwork and processes to ensure everything is functioning properly.

Audit your processes regularly:

All the processes of your company including manual and automated, must be audited at least once a year. Sometimes even automated systems can cause errors. If errors are not caught in time, they may result in overpaying or underpaying employees. In case of mismanagement of exited employees, you may end up paying full salaries to them instead of holding their salaries and performing their full and final payments calculations. In addition, the promotions or salary hikes may also not be provided in time as promised.

Prevent time theft using a payroll management software:

Some employees may misuse their working hours. You can stop this by using biometric machines in your company and then integrating the attendance data derived from biometric machines to the payroll system. Another option is to use an integrated attendance system that takes care of breaks taken by employees, in addition to in and out time of employees in the company. This integrated payroll management software will automatically calculate working hours of employees and calculate payroll accordingly.
The best practices to manage you payroll management system is to avoid using manual payroll calculations, transferring your payroll to a specialized software system. Try Empxtrack Payroll management system, which is a cloud based integrated application that provides fully functional payroll processing. Empxtrack Payroll Management System is integrated with the Human Resource Information System (HRIS), leave, attendance, loans and advances, and employee exit management systems.

TAGS: Cloud HR, HCM, HR Software, HR Technology, Payroll

7 thoughts on “Best Practices for your Payroll Management System”

  1. That article was amazing, I am very much impressed with your thoughts. I got the best information from this site of the blog, It’s very useful to all and us. Thanks for sharing this post

  2. It’s good that you said to avoid using manual payroll calculations, at least by someone who isn’t a professional. It’s easy to get overwhelmed by the number of employees you have when you’re doing payroll. My business partner and I are usually too busy to do it ourselves. Maybe we should outsource our payroll processing.

  3. I like how you said to classify your employees so that you can calculate payroll much easier. I have all kinds of employees in my business, so that’ll be really useful. Is it just those three classifications or can there be more?

    • Depends on the size of your organization. Larger companies across multiple regions will naturally have more classifications.


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