Payroll software is a portion of the larger set of HR software. It has the specific purpose of producing paychecks for employees and includes tracking the necessary deductions for benefits, taxes, and other deductions. Typically it interacts with or is a part of a more complete HR system.
Payroll occurs in any organization that is not staffed completely by volunteers, and therefore has become a sub-industry in itself. Back in the 1950s, when the earliest computers were beginning to be used for business, payroll was the first functionality moved to an automated process. Since then it has evolved to include many forms of payroll services software, from large, complex, enterprise software to free payroll software.
There are thousands of payroll services software packages available today, each with it's own good points and bad. Even the small business startup can handle the cost of a simple payroll package. In fact, most businesses only make use of a small portion of the functionality of even the small inexpensive payroll services software packages.
Basic rules of thumb for payroll services software lead to 3 basic paths for solutions:
- Small payroll services software packages that allow interaction with other HR packages
- HR packages that have their own built in payroll
- Payroll services like ADP, handled by outside service provider
Major entries in the small business and medium business payroll package environment include:
- Pensoft
- ADP
- ZPay
- Checkmark
- Redwing Software
- And others
In selecting the proper payroll package for your business, consider the following:
- The time involved in producing your own payroll. If, after gathering the required information, it seems to take excessive time to produce the actual payroll, then you may want to consider a service
- The breadth of payroll needs can determine, if you have multi-state or multi-nation payroll, whether it may be best to have a paid service
- If auditing is a regular process in your organization, then payroll services build this into their costs
- Otherwise, a simple payroll package will likely meet all your needs