Payroll management is an important function for business managers. The payroll management involves a lot of functions like, calculating the pay of the employees, generating the reports, printing payslips, maintaining compliances, generating forms and reports for filing employee tax returns etc. All these functions were performed manually earlier, but the advent of modern technology has led to the automation of the payroll management function.
Automated payroll management using the modern payroll software, makes it easy for the managers to calculate the pay of the employees, generate reports, issue payslips and maintain tax compliance. Some of the advantages of automating payroll management are
All the employees in a business organization are not paid uniformly. It is a difficult task for the managers to record and maintain the time clock data, manually and calculate the wages of the employees. The time keeping system of payroll software, aids the managers in calculating the working hours of the employees.
Accurate calculation of payments
Automated payroll software helps the managers to calculate the accurate payments of the employees. The salaries and wages of the employees consist of a number of components like bonuses, overtime worked, Expense reimbursement, commissions and deductions. The automated system calculates all these components accurately and determines the exact payment of the employee. Apart from calculating the payments, the systems also generates payslips of the employees.
Accurate calculation of deduction
Employers need to withhold a certain part of the employee salary for payment of taxes. The tax legislations of a country are dynamic and keep changing frequently. It is a difficult task for the managers to understand and remember the dynamically changing tax legislations. Automated payroll management system helps the managers to calculate the applicable deductions for each employee accurately and eliminates calculation errors. This helps in improving the tax compliance of the organization and the employees.
Efficient record keeping
Business organizations should mandatorily keep the employment tax records. The automated payroll software helps the managers to store the records securely and retrieve them whenever needed. The automated payroll management system also helps the managers to generate the various annual reports and employee data for the purpose of year-end reporting.