5 integral Parts of Payroll Management

5 integral Parts of Payroll Management

Paying your employees is not a hurtful thing at all as you have already taken the work from them in exchange for their salaries. However, it is not all about the movement of money. It requires a lot of hard work and calculations at the end of every month to pay your employees. You have to keep a record of their working schedules, holidays, leaves, overtime, etc. before calculating their salary.

All these things come under the payroll management category. You can do this by yourself or hire accounting staff for that purpose as well. For payroll management, many companies make use of a broad range of payroll software programs available online. However, there are some organizations that still rely on old age, dated manual methods of payroll calculations.

The basic purpose of any payroll management system is to pay its employees on time. Minimizing the mistakes in different calculations and depositing salaries directly into employees’ accounts are also major functions of payroll management.

Whenever you are trying to adopt a payroll management system or looking to design your own system to manage all payments, there are certain things that must be kept under consideration. Following are such things that are integral parts of any payroll management system and if lacking any one of these, it means your payroll management system is incomplete.

1.     Defining Your Payroll Policy

The first integral element of any payroll management is that it must-have features or capability of defining your payroll policy. There are certain payroll policies depending upon the payment methods you are using, the system of calculating working hours, and the salary period. You can have one or more policies at the same time. Your payroll management system will define all these policies and help you to proceed accordingly.

2.     Integration

You are not receiving the data about the working of your employees and their estimated salaries from a single person. Therefore, it comes in different forms and formats from different people. This data, especially about the time and attendance of employees facilitates you to pay your employees on time. Your payroll management system must be capable of integrating these data.

3.     Validation of Data

No matter how strong and advanced your payroll management system is, you can still have some mistakes in the data of your employees. These mistakes can create hurdles for you during each payroll cycle. Therefore, the next integral element of a payroll management system is the validation of data. After a certain time, this data is assured by employees and the HR team. This helps you to proceed with your payroll successfully.

4.     Process Automation

It is one of the most important elements of a payroll management system. The basic purpose of any management system is to organize different things accordingly so that you don’t waste your precious time. The same is in the case of payroll management. When it gets process automation, it will do certain calculations automatically and you don’t have to spend time on correcting different mistakes as well because it minimizes the risk of errors. It will automatically perform the same tasks of collecting data, calculating salaries, excluding taxes, etc. for every payroll cycle until you introduce some changes to it.

5.     Security

As you are aware of the fact that a payroll management system has the responsibility of handling sensitive data throughout the year. However, it is not all about handling it, a payroll management system’s part is to keep it secure as well. The confidentiality and protection of this data is an integral part.


Now you are aware of the different integral parts of a payroll management system and their purposes as well. So you should also design your payroll management in such a way that it has all of these five parts. The best advice, however, would be to start using payroll software. You can easily find HRM software with payroll that makes the job convenient for you. For example, Netchex is a reliable payroll solution you can use for ensuring smooth payroll operations. It can also serve as applicant tracking software and offer a broad range of other functions.

Dani Khan