How to Choose the Right Payroll Software: Complete Guide
Incorporating the payroll solution is a vital investment for every business to embrace long-term organizational success. Whether you are an SME or a big MNC, the system inefficiency & complexity due to the absence of payroll software lead to a waste of money & time. Utilizing a digital payroll system is imperative to enhance the precision of your system, seamlessly manage employee data, and effectively collaborate with various teams, all while significantly reducing the possibility of human errors. Furthermore, relying on a manual payroll system is difficult due to the constant changes in payroll policy.
Determining which payroll software offers the most suitable features while addressing your requirements is crucial when considering various options. So, “How to Choose the Right Payroll Software?” In this blog, we will take you through all the mandatory details of payroll software to help you make an informed decision.
What is Payroll Software?
Payroll software is a cloud-based or on-premises program designed to automate and streamline how organizations manage, calculate, and distribute wages, salaries, and other employee benefits. Bringing payroll software to your current business is crucial for long-term business success. It brings fruitful results by ensuring compliance with tax laws, minimizing the scope of human-based errors, and saving time for the HR and Finance departments. Moreover, it simplifies payroll administration by keeping accurate records of deductions, tax withholdings, working hours, and other payroll-related information.
What Makes Good Payroll Software?
Effective payroll software should have valuable features that transform businesses by adding value. Many companies expect features such as automation, security, integration, etc., when choosing payroll software. Here is what good payroll software should comprise:
1. User-friendliness
You will get many great features lined up in payroll HR software, but it’s only valuable if it’s user-friendly. For example, If HR and Payroll Managers waste a lot of time trying to figure out how to use different functions and find what they need, then the software isn’t making payroll work any easier or faster.
2. Employee Self-Service
Employee self-service in payroll software, now employee can handle their own work-related tasks through a simple portal. They can manage bank details tax details, view payslips, download company policies, and track their work hours and leave balances. This not only makes things easier for employees but also saves time for HR and payroll teams.
3. Automation
Payroll software’s ability to automate complex payroll processes directly impacts its effectiveness in enhancing payroll efficiency. A highly automated payroll system minimizes errors and saves valuable time for your HR team, ensuring a smoother and more reliable payroll operation.
4. Mobile Access
With the help of a dedicated app or a mobile-friendly interface, access to payroll information becomes instantaneous for the managers & employees.
5. Customization
Good payroll software allows easy customization through software configuration. This way, your organization’s specific payroll structures & policies are easily matched with the payroll software to ensure flexibility.
6. Accuracy
A highly effective payroll software provides accurate calculations of deductions, taxes, employee benefits, and timely disbursement of salaries. It ensures that the staff is paid the correct amount that adheres to the legal norms.
7. Integration
Integrations are the final step when proceeding towards payroll automation. It is very convenient and easy for the payroll team, such as calculating employee wages and formulating bulk payments automatically means less workload for the payroll team. Businesses serious about making the payroll as automated and effective as possible need to go beyond and integrate their payroll software with other tools like biometric systems. In this approach, businesses can automate payroll while minimizing human involvement.
8. Cost-Effectiveness
Cost-effectiveness in payroll software is about getting the most value for your investment. A good payroll system streamlines processes, cuts down on manual errors, and saves time, which all lead to cost savings. Instead of spending hours on payroll tasks, your team can focus on more strategic activities, making the best use of their time and skills.
9. Tax Compliance
Ensuring tax compliance is a critical aspect of payroll management, and the right payroll software plays an important role in this. It should be up-to-date with the latest tax laws and regulations to calculate deductions accurately and manage employee withholdings. This helps in submitting correct tax filings and avoiding potential legal issues and penalties associated with non-compliance.
10. Scalability
The effectively designed payroll software easily handles the daily changes in the organization, such as the increasing or decreasing number of employees.
11. Reporting
Payroll software provides valuable data and insights into payroll and workforce management. A robust payroll system should offer a range of customizable reports, enabling businesses to track and analyze employee hours, payroll expenses, tax deductions, and other critical data.
12. Security
Security is important when it comes to payroll software, as it handles sensitive sensitive employee information and financial data. A secure payroll system ensures that all data is protected from unauthorized access and breaches, maintaining the confidentiality and integrity of employee information. It should employ robust encryption methods, secure login protocols, and regular security audits to safeguard data.
13. Support
Just like any software or product services, the payroll software should also come with compatible customer support. Payroll is critical for all organizations, and if there are any problems with payroll, it can result in severe repercussions that can put the company as, the employees, in a problematic spot. If there is a problem, then the customer should be available to solve the issue as quickly as possible.
Overall, good payroll software provides a solution to existing businesses by simplifying & streamlining their payroll process. It meets your organizational needs by ensuring data security, integration, accuracy, compliance, etc.
How do you Evaluate a Payroll System?
Here are some tips for evaluating a payroll system
How Payroll Software Works?
Payroll software works by automating, streamlining & computing every aspect of the payroll process. Payroll systems handle everything on behalf of the HR department, from paying salaries, tracking working hours, delivering checks, and calculating earnings to filing payroll taxes. It saves time, effort & energy for HR professionals to focus on key business areas. As a result, the payroll system minimizes the manual tasks & the scope of human-based errors.
How does Payroll Software Process Salary & Calculate Taxes?
A detailed discussion with the payroll provider on how the Payroll software processes salaries and calculates taxes can be helpful in the evaluation process. Generally, they follow direct deposit arrangements with trusted banks for employee salary disbursements to their respective bank accounts. The payroll software automatically computes employee state insurance (ESI), provident fund (PF), income tax, professional tax (PT), and labour welfare fund (LWF). It also helps set different work locations for individual state regulations, stay updated with the tax laws, personalize the PF settings, and generate structured reports for tax filing & handling commissions, bonuses, holiday pay, & cost reimbursement.
Is it a Cloud-Based Payroll?
One of the critical parameters to consider while evaluating a payroll system is if it’s cloud-based software. As per one of the survey-based articles released by ‘Business Wire,’ 64% of organizations with cloud-based HR platforms have achieved more excellent business value & returns on their investments. Data on the cloud is 100% secure compared to on-premise data because of data encryption, security management, etc. It easily simplifies & upgrades the HR systems, allowing employees to work from anywhere.
What is the Implementation Process?
As far as the implementation process is concerned, the payroll software companies in India start the process by collecting your specific requirements and take a few weeks to evaluate the needs before coming up with the testing & final configuration. Here, you need to understand How to Choose Payroll Software by differentiating between time-consuming payroll providers & efficient payroll-providing firms. The best payroll software companies initially provide the demo sessions by preparing the testing & implementation environment within a few hours of your request for payroll software. It allows you enough time to experiment and configure the process.
Does it Integrate with Existing Systems?
Always look for payroll software that can easily integrate and merge employee payroll with your existing HR system. Some examples of integrated payroll software are time & attendance tracking, sick pay & vacation requests processing. Moreover, it should have application programming interfaces (APIs) to synchronize the employee data accurately in real-time. An integrated HR system with payroll software reduces your paperwork, eliminates duplicate data entry, and enables integrated reporting.
What Security Measures are in Place?
Payroll processing comprises employees’ confidential data such as salary figures, bank account details, addresses, identity proofs, etc. A strict security system that follows International Security Standards Protocols is required for a smooth payroll process to avoid data leakage, data breaches, or hacking. Check for security features like two-factor authentication and ISO/IEC 27001 security certificate while purchasing the payroll software.
Does the Reporting and Analytics Features work?
Payroll reports are crucial for tax filing, budget analysis, and governance. Before finalizing the payroll software, check if it provides relevant payroll expense data such as reimbursement, payment summaries, and salary registers. Also, understand if the software offers pre-formatted reports for tax filing. Ideally, once you know How to Choose Payroll Software, ensure that it generates the following report:
- Form 24Q for quarterly filing
- EPF-ECR reports for EPF returns filing
- ESIC reports for ESI returns filing
- Reports for Tax Deducted at Source (TDS).
Can Employees Use Self-Service Features?
The major payroll challenge the HR department faces is constantly answering employees’ questions related to their paid time off (PTO) balances, withholding, pay stubs, salaries, tax deductions, etc. With the help of Employee Self Service, such payroll processes are automated, allowing employees to
- View and download payslips
- Create, modify, and submit income tax plans
- Directly apply for leaves
- View attendance regulations
- Use the help desk to raise tickets
How Much does Payroll Software Cost?
The cost of Payroll software generally depends on the reputation, experience, customer base & valuable features offered by the payroll firms. It can cost as low as INR 29/- per month or as high as INR 2450/-.
The payroll providers set different pricing models for payroll services & various factors define the additional fee they charge. They might have a monthly fee model, a quarterly fee model, or an annual fee model. Most of them charge a fixed amount for their services.
Moreover, the cost will vary based on whether you opt for a basic plan, a standard procedure, or a premium-level enterprise plan. Also, check for hidden costs incurred in scalability, customer service, setup, cancellation fees, training, etc.
Which is the Best Payroll Software in India?
Top 7 Payroll Software to Simplify Your HR Task
1. KekaHR
KekaHR is a cloud-based HR and payroll software that serves startups, SMEs, and agencies. It offers a simplified yet configurable payroll process primarily focused on user experience. Keka’s payroll-based system smoothly integrates with essential HR functions leading to accurate calculation of tax & payroll.
Features
- Multi-user login
- Payroll management
- Asset management
- Loan & advances management
- Expense management
- Payroll integration
2. greytHR
greytHR is one of the most preferred payroll software that offers prominent features to SMEs and large businesses. It streamlines the entire HR process by automating Payroll Management, attendance, and leave tracking. The greytHR payroll software manages 10 lakh employee records daily and has provided satisfactory results to 9,000+ customers.
Features
- Expense management
- Reimbursement management
- Taxation management
- Geo tracking
- Employee Lifecycle Management
- Overtime Calculation
3. Zimyo
Zimyo is India’s #1 Employee Experience Platform & a reputed payroll software system. The software has a user-friendly interface helping even the non-tech-savvy to understand & operate the system efficiently from scratch. Its price starts from INR 80/- per month & goes to INR 200/- per month.
Features
- Reimbursement management
- Statutory Compliances
- Survey Management
- Taxation Management
- Real-Time Reporting
- Salary computation
4. Qandle
Qandle is an end-to-end payroll & HR solution with 20+ modules for StartUps, Enterprises, SMEs, and Agencies. It is super intuitive & has a fully functional mobile app and 100% configuration capability. Its pricing starts from INR 49/per employee/month.
Features
- Statutory compliance
- Claims and advances
- Statutory Compliances
- Reporting/Analytics
- Taxation Management
- Automated check-ins
5. Spine HR
Spine HR is a popular premium Payroll Management software. It’s a flexible and straightforward open-source database with a user-friendly interface. The software stays up-to-date with the trending features providing value for money. Spine HR is a one-stop solution if you are a business whose HR functions often need a change where scalability is required.
Features
- Statutory Compliance
- Employee Information System
- Web Based Module
- Mobile Support
- Multi User Login & Role-based access control
- Salary Information & History
6. Pocket HRMS
Pocket HRMS is the leading Payroll Software in India that revolutionizes HR and Payroll operations. It brings every operation digital related to HR, payroll processing, onboarding, attendance, etc. With the help of cloud and mobile technologies, employees can access their sensitive data instantly on the go from anywhere. Its price starts from INR 4995/- for up to 100 employees.
Features
- Multi-company and Multi structured payroll
- Forms generation
- Employee self-service
- Loan & Advances Management
- Exit Management & Separation Management
- MIS reports
7. Akrivia HCM
Akrivia HCM is a new age simple and effective Payroll Software Solution for businesses. It promotes employee engagement, efficiency, and enhanced productivity at the workplace. Akrivia HCM has won the “User Recommended Winter 2023 Award” by Software Suggest.
Features
- Employee loans and advances management
- API Integration
- Formula Defined Salary Calculation
- Asset Management
- Audits trail
- Taxation Management
Conclusion
In conclusion, Choosing the right Payroll Software that specifically meets your organization’s needs can be complex. However, your need for clarification regarding How to Choose Payroll Software ends with our many choices. Our HR experts at StartupHR Software find the best Payroll Software at a pocket-friendly price to suit your unique requirements. We offer a 100% Comprehensive HR Management Solution.
As a result, employee engagement increases through HR automation, minimized manual work & real-time data analytics. Further, we schedule a FREE OF COST Demo Session to let you understand all the prerequisites of the system & how it can take your business to new heights by saving time. Also, we have partnered with Top HR Software companies that simplify your payroll process in the blink of an eye.
