Wednesday, February 8, 2023

Payroll Automation: The What, How, And Benefits

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HR processes can be cut short or automated to a great extent with the right technology. Among them, making the payroll process automated can help the HR teams better handle the payment process. Be it small, medium, or large business organizations, payroll automation has its own advantages. It ensures the employees are paid accurately and on time.

What is Payroll Automation

Payroll automation refers to the automation of the whole payroll function under the HR teams. Utilizing advanced programming, algorithms, artificial intelligence, and machine learning this process can be done automatically by the system. The system replaces the manual work of data entry, employee information gathering, analysis of attendance, payment calculations of each individual, and bank transactions.

Automation eliminates manual errors of HR personnel and assigns the correct salary to employees. It validates the workflow for payment teams. Each business has different payroll requirements and processes. Here is a list of tasks that an automated payroll system can perform:

  • Track and update payroll data
  • Run payroll
  • Track attendance
  • File taxes
  • Calculate overtime, double-time, bonuses, raises, etc.
  • Tax reduction calculation
  • Keeps records of payment
  • Financial planning
  • Modify, edit, and track financial documents

ALSO READ: 6 Impacts of Information Technology On HRM

How Payroll Automation is Done

The payroll automation process can be done in several steps.

Find a System/Software

Not all automation systems in the market may suit your company’s requirements. First, analyze the solutions available in the market and select the best that suits your needs. Each function needs to align with your business goals. Categorize and filter from the options and select what works best for the business.

Prepare the Information

Once you’ve selected the software for automation, be prepared with the necessary documents for input. The more accurate the added data to the system the better the results will be. This will reduce the mistakes down the line.


Ensure that all the documents are in place before the rollout of the automation process. Each department has its own documentation and formats. Make sure the right documents are in place and cross-check if you are missing anything.

Train Employees

Employees need to be trained on the new system, its usage and troubleshoot procedures. Depending on the complexity, training needs to be conducted for each department or concerned people.

Benefits of Payroll Automation

If you are thinking about whether payroll automation will work, think again. Here’s why.

Saves Time

The payroll process is repetitive and mundane for HR teams. It takes up a lot of time from their daily work schedule. Automation helps them reduce the time spent on it and increase efficiency. Automation helps to streamline the process.

Reduce Errors

Utilizing automated software reduces the risks of human error that come with manual verifications and data entry. As all data can be retrieved by the system automatically, it can calculate deductions, bonuses, overtime, etc. accurately.

Regulations are Maintained

Regulations like taxes, rules, laws, licenses, etc need to be considered in some cases of providing payroll. The automated systems can be fed with such information and automatic update capabilities to understand the present rules and regulations. By maintaining the regulations, the payroll automation system ensures that you comply with the financial laws.

Easy Updates

Data of individual employees can change from time to time under certain circumstances. Automated payroll software can help the employees directly update their information without the help of HR. Employees can view the pay checks, edit information, update direct deposit, view pay stubs, view deductions, and much more with such solutions.


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