What is Payroll Management?

Updated: Aug 20

Payroll management is a process of administration of a company's financial reports of the employees. These records include all the necessary information about the employee such as their salaries, bonuses, deductions, incentives, and their net pay. It is a must for an employer to keep the employee's record as dictated by the law. If not followed the Income Tax laws about the employee's records, it can be grounds for legal results. Payroll processing should be given maximum attention as it is the most significant and time-consuming administrative responsibility which needs to be taken care of.

Importance of payroll management in business

• It assembles employee's basic data all in one place.

• It can be used to know the problems such as absenteeism beforehand and employee turnover

• The financial integrity of a company is dependent on it.

• It alters the salary structure dealing with the promotions and increments.

• By sticking to the country's labor law and legislation, it protects a brand's reputation.

Advantages of payroll system

Saves time: Managing payroll manually consumes extra time and resources. But the payroll system speeds up the process with a lot of functions.

Cost-effective: You can save money by handling payroll through software instead of hiring someone to complete the same task.

Easy calculations: Calculating the data manually for each employee is a difficult task. You can use payroll software to speed up the process. It calculates the data for each employee and reduces the errors which improve the accuracy. It saves time and money.

Easy forecasting: This software gives you the authority to control all the expenses. You can also graph financial data that can help in creating a forecast.

Secure backup: It is difficult to handle a large amount of data of a company. It is practically impossible to store the data manually. However, this software makes it easier to store the data for various online databases. If your system damages ever, you will be able to restore your data.

Benefits of Payroll software for your organization

Payroll software not only saves time but also helps in accurate processing and keeps everyone happy. Here are some qualities of the software that you should consider if you are choosing software.


If you have a large organization then you need software that will help you suitably. Limited features can restrict you to manage the organization properly. Therefore, the software must offer something that you can choose the advanced features at an affordable price.


The payroll function can be unmanageable. You should choose an extensive system and the workflow should be easy, not complicated. Choosing automated software will diminish the requirements of software training and guidance. Do check that the software is giving you updated documentation. That will be easy for you to access the information whenever needed.

Employee Self-Service Module

The employee is the primary payroll information provider. They provide information like the type of flexible benefit selected, income tax saving investment declaration, etc.

The intercommunication between payroll officer and employee is even based usually. Therefore, to understand the ESS module, let's take an income tax declaration case in two situations:

• Without ESS: The payroll officer sends an email to the employees with a declaration form. They take printouts to fill in the details and submit them. The officer checks each form and fills in the details of each employee. In this case, manual data entry can lead to the risk of errors.

• With ESS: The payroll officer releases the form and all employees get informed. Employees can log in to ESS to fill the forms and submit them online. The data automatically gets updated in the payroll database, accelerating the process and error-free updation.

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