Payroll Software: Definition, Advantages, and Functionalities

Payroll software is an essential IT tool for automating payroll processes and thus optimizing HR management within the company.

Payroll software: definition

Payroll software is a tool enabling the automation of payroll data collection, processing, and calculation of these, and the administrative staff. The objective is to produce a payslip and declarations by both social legislation and the employee's situation.

The payroll software simplifies the processing of "human resources" processes in the context of payroll management, from the hiring to the departure of employees.

It can be installed:

On-premise: also called “single-user”, this is software that is physically installed on the company's servers. The user acquires a license from the publisher.

SaaS and online payroll solution: the software is installed on the hosting provider's servers and can be accessed remotely via any web browser. Usually, the user pays for a subscription.

The two solutions each have their advantages and disadvantages to study depending on the size and specificities of the company.

What are the advantages of a payroll management solution?

The advantages of having payroll software are numerous. However, before embarking on the implementation of the tool, the company must analyze its existing processes and ask which ones can be automated without prejudice to the teams.

It will be a question of choosing a software adapted to the structure (size of the company, organization of HR processes…) as well as to its sector of activity. This due diligence work maximizes the benefits of automated payroll processing and significantly improves productivity within the company.   

• Time-saving: the automation of time-consuming tasks with low added value allows the optimization of the working time of HR teams;
• Reduced risk of human error  :

1. Social and contractual rules are updated by the software publisher, which monitors legal matters;
2. The centralization of data in a single database avoids errors generated by the double-entry of social data which is thus made reliable and secure;
3. The automation of declarations (DUE, DSN) and payroll calculations reduce the risk of errors or forgetting;

• Scalability of the tool: it is possible to change your payroll application as your business and its workforce evolve. 
• Control of your social data: in the era of big data, data processing is essential to master your HR function and control your social data. With payroll software, the company can have reporting tools to produce the main control reports.

The features of payroll software

Thanks to the upstream work of assessing needs and defining the budget, the company chooses between several payroll software, the one that will be the most suitable. Certain basic functionalities are essential, others allow advantages of flexibility and control of the payroll function. Often, the dual management of personnel administration and payroll is facilitated within the same tool. 

• Collection of the data necessary to establish the payroll;
• Calculation of pay based on variable elements (overtime, sick leave, paid leave, etc.) and applicable legal rates;
• Calculation and collection of the withholding tax to be declared;
• Editing of the simplified payslip for employees, it can be dematerialized and archived;
• Production of the various mandatory declarations: Single Employment Declaration (DUE), Social Nominative Declaration (DSN);
• Production of compulsory documents: employment contracts, employment certificates, the balance of any account;
• Production of control reports (especially for accounting) and edition of HR dashboards. 

Find the best payroll software with an addon human resource management system