Choosing the right in-house Payroll Management System automates manual processes, ensures tax compliance, and puts detailed employee information within easy (and secure) reach of your payroll HR team.
Brushing up on your payroll management terminology will help you evaluate your options for new payroll processing software.
Payroll Management System
At its core, a comprehensive payroll management system serves as the secure repository for managing and maintaining employee records and the turbo-charged engine for in-house payroll processing. The most powerful payroll software will track employee time; process employee pay, deductions, benefits, and taxes; process direct deposit paychecks; print manual paychecks; calculate employer taxes; generate electronic files for submission to local, state, and federal tax agencies; track and process ACA reporting; offer robust reporting and human resource tools; and include an Employee Self-Service portal.
Employee Time Tracking
Tracking employee time accurately benefits both the employee and the employer. Time tracking software ensures that employees are paid for the hours worked and that employers are accurately tracking their employee-related expenses.
Also called an employee portal, employee self-service software lets employees view and manage their payroll and HR information. The self-service portal for employees offers secure access for keeping contact information up to date, viewing paycheck stubs, benefit enrollment, and more.
Successful companies often have locations in more than one state. Having a multi-state payroll can be complex and challenging. Awareness of residency determinations, compliance with state and local income tax withholding, and properly configured payroll software are necessary for accurate and timely payroll processing in multiple states.
Employers are required to report to the IRS wages, tips and other compensation paid to employees. Employers also must report taxes they deposit by filing Forms 940, 941, and 944 using either paper forms or e-file.
Payroll Direct Deposit
A direct deposit paycheck is an electronic transfer from an employer's bank account to an employee's checking or savings account. Direct deposit, which is a type of ACH payment (Automated Clearing House), facilitates the automatic deposit of payroll checks into employees' bank accounts. To set up direct deposit, the employee provides their employer with bank account information. When the employer processes payroll each pay period, the employee's paycheck is electronically deposited into their account.