When you’re looking to implement an HRIS (Human Resource Information System) for your company, you’ll see that there are many options with a wide range of features. One of the most commonly asked about features is payroll: Do all HRIS systems include payroll?
While we can’t say that every single HRIS system has a payroll module, it’s safe to say that almost all HRIS systems include payroll. This is because managing payroll is far more complex than most people realize, and it’s one of the best tasks for automation.
Why payroll is a good fit for an HRIS
To understand why almost all HRIS systems include payroll, it helps to look at the requirements of payroll. There’s a substantial amount of information that needs to be considered, even before the first payment is processed. Whatever system you use needs to know how to manage the following for each team member:
- Current name & contact Information
- Tax filing status (taxes must be collected for federal, state, and local governments)
- Additional tax withholding requests
- Pay frequency
- Salary vs hourly
- Exempt vs non-exempt
- Paid time off (PTO) management
- Additional time off management including family medical leave act (FMLA allowances), maternity/paternity leave, bereavement leave, and unpaid time off
- Bonus structure including separate taxation
- Health insurance deductions
- Potential wage garnishments
This is a substantial amount of information to manage even once, but when you consider that tax rates and policies change, employees move or change their filing status, workers at different locations add layers, remote work adds potential confusion, different team members have different amounts of PTO, the complexities become exponentially greater.
Making mistakes in payroll is a major problem. It is one of the quickest ways to cause dips in employee morale, resentment towards management, and turnover. There are also substantial legal ramifications for making certain payroll mistakes, including being in trouble with the IRS or state governments. You can get sued by team members who were not paid appropriately, or not given the benefits required by law.
These considerations explain why almost all HRIS systems include payroll management. Many businesses will say there is no single task that is better suited to automation than payroll. HRIS systems that include payroll generally give employees a way to track their time, management a way to approve employee timekeeping when needed, automatic overtime calculations, automated tracking of time off, and seamless tax withholding. Generally, these systems let you pay team members with a few clicks, potentially saving weeks of your time each year.
To learn more about choosing the right HRIS, including payroll, contact Benefit Leader.