Payroll management system is the system by which employers can pay the employees for the work they have completed. Although payroll seems like a mundane task, it involves many aspects including the withholding of taxes from each paycheck and making sure accurate funds are paid to the correct government agency. Therefore, a payroll system has to be devised to manage and handle these tasks. This is called payroll management. Payroll management usually inculcates software that is designed to organize all the tasks of employee payment and the filing of employee taxes.
These tasks can include keeping records of hours worked, calculating wages, writing paychecks and distribute them and filing of employee taxes to the government. Payroll software often requires very little input from the employer hence are easy and user-friendly to use.
About Payroll Management System
Payroll management system, as the name suggest, refers to a program or application in a system that is utilized by enterprises and organizations to manage the salary of the employees. Various important aspects included such as the salary, allowances provided to the employee, deductions and the net payable to the employee. Most payroll management systems also deal with generation of payslips for the desired duration of time.
Complicated computations that are usually performed manually can be automated using payroll management system, thus proving to be its most significant benefit. When the various aspects, such as salary, allowance, deduction, and net payable are worked on manually for each and every employee, proves to be more time consuming in comparison to automated payment management system. Apart from the factor of being more time efficient, it also significantly brings down the possibility of having errors that may happen during manual calculations.
The capability of using a single system can prove to be extremely advantageous, considering that the need to refer to various sources in the search for data can be drastically negated. Vital data such as attendance, number of leaves taken, tax deductions and so on can all be found in one single location which results in adding ease to generating reports. During audits, where specific reports are need to be submitted in rigid deadlines, having these data available at ease of access proves to be useful for legal documentation and tax compliance.
The usage of payroll management system endorses better and robust security ensuring that employee data is kept confidential. The rights to access can be given to only those with administrative authorization, which enforces tighter controls. On the other hand, the system proves to be useful to the employees as well, wherein they can log on to their to get a clears picture of the current status, enabling them to keep track of their available leaves and so on.
Although there are numerous kinds of payroll management system present in the market, the types of payroll management system can be broken down in three fundamental categories—in-house, software and outsourcing.
Although each process have their own advantages and disadvantages, it is important to understand that there is no ‘one size fits all’ solution for payroll management system, considering that now two enterprises are different and each of them have their own set of challenges and shortcomings. The main focus of payroll management system is to automate and restructure the process of paying salaries to the employees at an organization. For this reason, it is also referred to as salary management system.
Payroll or salary processing is a group of tasks that implies the computing and disbursement of salaries to all the employees. The payroll process is defined into five sets.
4.Release payments: this step is where the payment is released with the assistance of a wizard that helps to create Bank Transfer Statement. Once this is created, it can be downloaded in the format required by specific banks and submitted to get the payout.
5.Publish info: as the process of payout is accomplished, the payslip is required to be generated and delivered to the employees. After the processing of salary, employees can view, download and print their respective payslips in the specified formats. As an option, the payslip can be emailed to the employees or alternatively publishing the details on a self-service platform. Depending on the practices follow at different organizations, the above mentioned option can be used or if hard copy is to be delivered, the payslips can be downloaded in their .pdf formats and printed to hand out to the employees.
Payroll Management System Features
Apart from being cost and time efficient, payroll management system provides many other advantageous features such as providing employee calendar, providing tax updates, provide reminders and so on. Owing to the simplicity involved in the process, there is no need for skilled professionals to deal with the payroll management system. A person with expertise in the field of Information Technology would be sufficient to efficiently manage a company’s payroll management system. This provides flexibility to enterprises, particularly the smaller ones. In addition to all other advantages, when using external payroll management software, customer service is available to help with any issues or shortcomings in the software.
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