Payroll software is a digital solution designed to simplify the payroll process for businesses of all sizes. It automates the complex operations of calculating salaries, deducting taxes, and assuring timely and correct employee payments. What can take hours per employee when done manually, now only takes minutes. To sum up “What is Payroll Software?” It’s one of the most important tools modern businesses use.

The Purpose of Payroll Software

Payroll software ensures that all operations, from the moment an employee joins a company to every salary calculation, tax deduction, and payment, run smoothly and efficiently. It provides two main functions: streamlining payroll tasks to save time and money and keeping accurate records for compliance and financial reporting. With payroll software, organizations may reduce errors, increase efficiency, and ensure tax compliance.

Common Features of Payroll Software

While each payroll provider has its own unique features, there are some common ones you can expect throughout the industry.

Automatic Calculations: No more manual calculations or human error. With payroll software, overtime, bonuses, and commissions are accurately calculated based on hours worked.

Third-Party Integrations: Enables data flow across payroll, human resources, and accounting systems, resulting in more simplified operations.

Employee Self-Service Portal: Employees can submit their own time, select their deductions, view paystubs, and more!

Automatic Time-Tracking: Track hours worked including overtime digitally, with a punch card system, and other methods automatically. If not included, you often integrate free time clocking solutions like Clockify. 

Tax Calculations: Automatically conforms to varying tax laws depending on your location, including local/state/and federal taxes.

Direct Deposit: Offer secure payments directly into employee’s bank accounts all with a couple of clicks.

Compliance Tools: Like with tax calculations, the payroll can be automatically set to follow local laws and make sure you stay compliant with your payment methods.

Reporting Tools: Generate detailed reports in a flash for financial analysis and better payroll management.

Benefits of Payrolls

Payroll software can provide many benefits even if you run a small business.

Save Time: With automated workflows and calculations, payroll can be done with just a couple of clicks. You don’t have to manually input the time and manually review each account as the software can flag any problem accounts.

Save Money: You can save money by using software to simplify your workload instead of hiring more workers to handle payroll. Payroll can be cumbersome, but if you have the right tools, you don’t have to spend money on an expansive team. 

Scale Your Payroll Needs: Your payroll software can add/remove employees in just a couple of minutes. Also, the effort to add new employees to your workload is minimal compared to doing so manually.

Reduces Errors: The game is all about accuracy. With automated computations, the possibility of human error is considerably reduced.

Enhanced Reporting: Generate reports much easier and much more frequently with payroll software.

Enhances Security: Payroll software can help secure sensitive financial data from prying eyes and make sure only certain members have access to what they need.

Price of Payroll Software

The price of payroll software depends on a couple of factors such as:

• Number of employees
• Features included
• The actual provider

There are a couple of different types of pricing models as well.

Pricing Model	Common Pricing	Notes
Subscription-Based (Monthly)	Varies widely $30-$250+	Cost-effective for varying sizes, watch for overpaying for unnecessary features. Usually allows you a certain number of employees per subscription tier.
Base fee + Per Employee	$20-40+ base fee + an employee fee	Common model that can easily scale as you do. Can get pricey as you add more employees.
Free	Free for a certain amount of employees and limited features.	Often has ads in the software and is often limited on features and how many people you can run payroll for without paying.

Most companies are switching to a ‘base fee + employee fee’ and some of the biggest providers use this model.

Additional Costs to Consider:

Startup/Implementation fee: Some companies may charge you setup fees if there is professional help needed to set up the software.

Support and Maintenance: Priority support or having dedicated support may cost extra if you want to access afterhours.

If you would like to see some of the top providers, check out our article here for a full breakdown.

Need Payroll Software Now?

Are you looking for payroll software that can empower your business without breaking the bank? Yeah, we got you covered. 360Connect pairs customers with qualified suppliers every day. Just fill out our 1–2-minute form and we’ll contact you to verify your information and needs. From there, just sit back up and relax as up to 5 suppliers will reach out to you with quotes. This process is free so don’t wait!