Us HR pros know that payroll is always a bit of a pain to manage efficiently. Between the snags that stop the system from running smoothly, and the sheer weight of compliance and getting people paid on time to bear, the payroll process can become a nightmare.
The key is to spend time curating a solid process for managing your payroll that virtually runs itself – a careful balance of automation, great employee experience, and tight compliance.
Want to find out how to do this? Read on to discover our 6 best tips to improve your payroll process ⬇️
Integrate your payroll processes with other HR functions
Why you should be integrating payroll with other HR functions
Because it will streamline your workflows
When you integrate payroll with your other HR functions, you’ll effectively be completely eliminating any redundant data entry and manual processes. This means that tasks such as inputting employee information, updating payroll records, and managing timekeeping data can be automated.
You’ll be able to completely automate data transfer between your systems in order to save time and reduce the risk of any errors through manual data entry. You can therefore create a unified system that streamlines workflows and enhances overall efficiency across the HR department.
Because it will make your data more accurate
Integrated payroll and HR systems ensure data consistency and accuracy by eliminating discrepancies between employee records, timekeeping systems, and payroll databases. This means that employee information, such as personal details, salary rates, and benefits elections, remains consistent and up-to-date across all systems. An Integrated best in class approach that utilises powerful API integration mitigates risk be separating power and processes. All-in-one systems don't generally offer the deep domain expertise required in some business use case and compliance instances. If an All-in-one system is purchased an one of the silo applications does not meet business needs, it's extremely hard to turn it off and bolt on a best in class system to replace it, thus the All-in-one approach fails.
In turn, this minimises errors in payroll processing, such as incorrect salary calculations or missed deductions, so that you can achieve fewer payroll-related issues and discrepancies. 👍
Because you’ll achieve tighter compliance
Integrating payroll with other HR functions will help you ensure compliance with labour laws, tax regulations, and reporting requirements.
What’s more, integrated payroll and HR systems provide audit trails and reporting capabilities that allow organisations to track and monitor compliance efforts way more effectively.
The 3 most powerful payroll and HR integrations
Time and attendance + payroll
Integrating payroll with time and attendance tracking systems means you can seamlessly synchronise so many things 👇
- Employee work hours
- Overtime hours
- Leave balances
- Shift differentials
- Break times
- Absences and tardiness
- Attendance policies
- Statutory holidays
- Compliance reporting
- Integration with payroll software
- Employee self-service
You’ll then be able to take this data and automate timekeeping tasks such as capturing clock-in/out times, calculating hours worked, and applying overtime rules for perfectly accurate payroll. 🙌
HRIS (Human Resources Information System) + payroll
When you integrate payroll with your HRIS, you’re able to centralise employee data and deeply streamline your HR processes, including onboarding, offboarding, and employee lifecycle management.
This integration facilitates smooth data interchange between payroll and HR systems, guaranteeing uniformity in employee records, alterations in job roles, and salary adjustments. ✅
Keep employee experience in mind
Why employee experience matters even with payroll
Payroll directly affects employees' financial well-being. Ensuring accurate and timely payment of salaries and benefits contributes to employees feeling valued and respected by their employer. And payroll errors, delays, or discrepancies can lead to financial stress and dissatisfaction among employees.
Furthermore, a smooth payroll process demonstrates organisational transparency and fosters trust between employees and employers. When employees have confidence in the accuracy and fairness of the payroll system, it enhances their trust in the organisation as a whole.
Payroll processes can also impact employee retention rates. Employees who experience frustration or dissatisfaction with payroll-related issues are more likely to consider leaving their jobs. Conversely, a positive payroll experience, along with competitive compensation and benefits, can contribute to higher employee retention rates and lower turnover. 👍
How to enhance the payroll experience for employees
Clear communication about payroll policies
It’s really important to provide clear and transparent communication about payroll policies, procedures, and deadlines. Ensure that employees understand how their pay is calculated, when they can expect to be paid, and any relevant deductions or benefits.
It’s also a good idea to communicate changes to payroll policies in advance and provide opportunities for employees to ask questions or seek clarification. Make sure you utilise multiple communication channels, whether that be email, company intranet, or employee meetings, to ensure that all employees receive important payroll-related information.
Providing self-service options for employees
Empower employees with self-service options to access their payroll information, view pay stubs, update personal information, and manage their direct deposit preferences. These user-friendly self-service portals or mobile apps can allow employees to conveniently access their payroll information anytime, anywhere.
Note: It’s good practice to provide training and support to ensure that employees are comfortable using self-service tools and understand how to navigate payroll-related tasks independently.
Timely resolution of payroll-related issues
A great driver of a positive employee experience when it comes to payroll is whether you’re able to timely resolve payroll-related inquiries, discrepancies, or concerns raised by employees. A couple tips here are to:
- Establish clear channels of communication, such as a dedicated payroll hotline or email address, for employees to report payroll issues
- Assign designated payroll administrators or HR personnel to promptly address employee inquiries and resolve payroll-related issues
- Implement a systematic process for investigating and resolving payroll errors or discrepancies, including documentation of corrective actions taken and follow-up with affected employees to ensure resolution
Implement a payroll schedule
Step 1: Check the law
Before creating the payroll schedule, familiarise yourself with relevant laws governing payroll processing, including requirements for pay frequency, minimum wage, overtime, and payroll tax withholding.
Step 2: Create a payroll calendar based on how frequently your employees get paid
Based on how frequently your employees are paid (e.g., weekly, bi-weekly, semi-monthly, or monthly), create a payroll calendar outlining pay periods, pay dates, and deadlines for submitting working hours or payroll information.
Ensure that the payroll calendar complies with legal requirements and aligns with your organisation's payroll processing cycle. 🕜
Step 3: Take into account holidays that impact pay dates
Make sure you take into account any holidays and non-working days that may impact pay dates. Adjust the payroll schedule accordingly to ensure that employees are paid on time, even if a pay date falls on a holiday.
Step 4: Give your employees the calendar every start of year
Provide employees with a copy of the payroll calendar at the beginning of each year or fiscal year. Clearly communicate pay periods, pay dates, submission deadlines, and any relevant holiday observances or adjustments. It’s also a good idea to ensure that employees understand how the payroll schedule works and where to find additional information or assistance if needed.
Step 5: Maintain and adjust the payroll schedule
Regularly review and maintain the payroll schedule to account for any changes in pay frequency, holidays, or organisational needs. Be flexible and willing to adjust the payroll schedule as necessary to accommodate changes in business operations, employee feedback, or regulatory requirements.
Don’t forget to communicate any updates or changes to the payroll schedule promptly to employees and ensure that they are informed and prepared for any adjustments. 👍
Create a set of payroll policies
The most important factor that determines how smoothly your payroll system will run is how detailed your payroll policies are. If you’re able to create a solid set of payroll policies, you can rely on them to keep things running properly long-term. Let’s explore some important payroll policies you might choose to include ⬇️
The key elements of a payroll policy
Timesheet submission procedures
- Employees are required to accurately submit timesheets by the specified deadline.
- Timesheet submission methods, including online portals or physical forms, should be clearly communicated to employees.
- Supervisors or managers must review and approve timesheets before submission to payroll.
Payroll schedule and pay frequency
- Payroll schedules, including pay periods and pay dates, will be communicated to employees in advance.
- Pay frequency (e.g., weekly, bi-weekly, semi-monthly, or monthly) will be established based on organisational needs and legal requirements.
Wage calculation methods, payment adjustments, and procedures for rectifying errors
- Wages will be calculated based on hours worked, hourly rates, or salary agreements.
- Payment adjustments, including bonuses, commissions, or incentives, will be processed according to predefined criteria and approval processes.
Protocols for manual payroll processing in emergencies, ensuring continuity of operations
- In the event of emergencies or system outages, protocols for manual payroll processing will be implemented to ensure continuity of operations.
- Designated personnel will be responsible for executing manual payroll processes and documenting transactions for reconciliation.
Overtime and leave policies
- Overtime work must be pre-approved by supervisors and documented accurately in timekeeping records.
- Paid time off, including annual leave, sick leave, and holidays, will be managed according to company policies and legal requirements.
Deductions for taxes, benefits, and other withholdings
- Deductions for taxes will be calculated in compliance with tax laws and regulations.
- Employee contributions to benefits programs, such as health insurance, retirement plans, and flexible spending accounts, will be deducted from wages as authorised.
Policy compliance and enforcement
- All payroll policies and procedures must be adhered to by employees and supervisors.
- Non-compliance with payroll policies may result in disciplinary action, up to and including termination, as outlined in the company's disciplinary policy.
Reporting and auditing
- Regular audits of payroll records and processes will be conducted to ensure accuracy, compliance, and integrity.
- Audit findings will be documented and addressed promptly, with corrective actions implemented to prevent recurrence.
💡 Quick Tip: Document your payroll policy with built-in approvals and signoffs to streamline onboarding and transitions, ensuring that new hires and transitioning employees are familiar with payroll processes and expectations.
Audit periodically
Why payroll auditing is crucial
- Payroll auditing helps verify the accuracy of payroll calculations, deductions, and employee records, reducing the risk of errors and discrepancies in employee compensation
- Regular payroll audits ensure compliance with local labour laws, fairwork, tax regulations (ATO and New Zealand Inland Revenue), and reporting requirements, mitigating the risk of penalties, fines, or legal consequences for non-compliance
- Payroll audits can uncover instances of payroll fraud, such as ghost employees, unauthorised overtime, or falsified timekeeping records, protecting the organisation from financial losses and reputational damage
How to audit your payroll
Preparation- Define the scope and objectives of the payroll audit, including the time period, payroll processes, and areas of focus.
- Assemble an audit team with expertise in payroll, accounting, and compliance.
- Obtain access to payroll records, reports, policies, and procedures for review.
- Examine existing payroll policies and procedures documented in the Employee Handbook or company manuals
- Ensure that payroll policies align with legal requirements and industry best practices
- Identify any gaps, inconsistencies, or areas for improvement in the payroll policies
Verify employee data and records
- Validate employee information, including personal details, tax withholding, and employment status
- Compare employee records with HR records to ensure accuracy and completeness
- Investigate any discrepancies or inconsistencies in employee data
- Review timecards, timesheets, or attendance logs to verify hours worked by employees
- Confirm that timekeeping records accurately reflect actual work hours, breaks, and overtime
- Cross-check timekeeping data with approved schedules and leave requests
- Calculate wages, salaries, bonuses, and deductions for a sample of employees
- Verify the accuracy of payroll calculations, including tax withholdings, benefits deductions, and wage garnishments
- Investigate any discrepancies between calculated amounts and expected figures
- Ensure compliance with labour laws, tax regulations, and reporting requirements applicable to payroll processing
- Verify adherence to minimum wage laws, overtime rules, and employee classification requirements
- Document audit findings, including errors, discrepancies, or non-compliance issues identified
- Provide recommendations for corrective actions or process improvements to address identified issues
- Assign responsibility for implementing recommended changes and establish timelines for completion
Invest in robust Best in Class payroll software
Why you should invest in HR software that does payroll right
Robust payroll software helps ensure compliance with complex payroll regulations and tax laws, reducing the risk of errors, penalties, or legal consequences associated with payroll processing. It also streamlines payroll processes, saving time and reducing manual effort required for tasks such as payroll calculations, tax filings, and benefits administration.
Payroll software with robust security features protects sensitive employee data from unauthorised access, ensuring confidentiality and compliance with data protection regulations.
What’s more, accurate and timely payroll processing enhances the employee experience, fostering trust, satisfaction, and engagement among employees. 🙌
The most important factors for HR software payroll efficiency
Here’s what we would look for in an HR software tool for maximum payroll efficiency ⬇️
Payroll functionality
Prioritise HR software with robust payroll functionality, including accurate wage calculations, tax withholding support, benefits administration, and direct deposit capabilities. Ensure that the software can handle complex payroll scenarios and compliance requirements specific to your industry and location.
Integration capabilities
Choose HR software that offers seamless integration with other systems and software used in your organisation, such as time and attendance tracking, accounting software, and benefits management platforms. Integration eliminates the need for manual data entry and ensures consistency across HR processes.
With SubscribeHR, key employee payroll information is managed seamlessly through the onboarding process. This streamlines the collection of essential payroll data, such as bank details, tax information, and superannuation contributions, ensuring accuracy from the start. 👍
Compliance and security
Ensure that the HR software prioritises compliance with labour laws, tax regulations, and data security standards. Look for features such as tax filing support, audit trails, and data encryption to protect sensitive employee information and ensure legal compliance.
User-friendliness
Select HR software with an intuitive and user-friendly interface that simplifies payroll processing for HR administrators and employees. Clear navigation, customisable features, and accessible support resources contribute to a positive user experience and efficient payroll management.
Subscribe-HR empowers employees with self-service capabilities to manage their own payroll records. Employees can update their bank details, tax information, addresses, and more, reducing administrative burden and ensuring data accuracy.
Automation capabilities
Look for HR software that offers automation capabilities to streamline repetitive payroll tasks and workflows. Features such as automatic payroll calculations, deduction processing, and report generation can save time and reduce manual errors in payroll processing.
SubscribeHR allows for mobile timesheet capture, with customisable templates and multi-level authorisations. This enables employees to submit timesheets accurately and efficiently, ensuring timely payroll processing.
Scalability
Choose HR software that can scale with your organisation's growth and evolving payroll needs. Ensure that the software can accommodate your changing requirements without compromising performance or functionality.
Reporting and analytics
Prioritise HR software that provides robust reporting and analytics capabilities to track key payroll metrics, analyse trends, and generate actionable insights. Customisable reports, real-time dashboards, and advanced analytics tools can help optimise payroll processes and decision-making.
🚀 Want to see our powerful HR software in action to understand how we help you nail your payroll process? Try us for free!
