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What is payroll software?

Payroll software is a digital solution, on-premises or cloud-based, that manages and automates employee paychecks and other payroll processes.

Businesses have the demanding and often tedious job of processing payroll throughout the year, including getting employees paid on time, filing taxes, and remaining compliant with laws and regulations. The human resource department or accounting is primarily responsible for keeping track of employee information and ensuring everyone is paid accurately, but as more and more of these office and employee-related processes are digitized, so is payroll.

Payroll software is used by a lot of companies now to streamline this process, especially since it keeps track of all the relevant information, prevents human error, and documents the most important data for tax duties. This article will go over the basics of payroll software, why it’s so valuable in the modern workplace, and how to select the right software for your business.

The most notable benefits of using payroll software are how convenient and accurate it is for all kinds of companies.


Firstly, this type of software ensures that employees are paid. Not only are they paid, but they are consistently paid the correct amount, at the right time, and via the payment method they prefer. If they want a direct deposit and their money divided up into specific accounts, then the automated payments will move the funds to their bank account, 401K account, etc.

Aside from getting paid on time and having easy access to funds, other employee benefits include:

  • Can view payment history
    Employees need to be able to look into their finances to see how and when they get paid, which is made easy when software stores all of this important data. Employees can see the breakdown of their paychecks, see where their withholdings are going, and more.
  • Adjust personal information and payment information
    When someone moves into a new home, starts banking with a new credit union, gets married, or whatever the change may be, employees do not need to necessarily make requests to the HR department and can instead jump on the payroll software and update their information themselves.
  • Get answers quickly to questions
    Payroll software cuts out the middleman in general and offers information and insights when employees do have a question, which means they don’t have to wait on someone else’s schedule to get that information promptly.
  • Minimize work disruptions
    Getting a hold of HR or accounting during the middle of the day or scheduling an appointment with someone takes away time from actual work tasks or free time from both the employee and the payroll departments. With easy access to payroll information online or using an app, employees can manage their own time and get what they need without losing momentum during work tasks.


Employees are not the only benefactors of payroll software—in fact, they benefit even more from this tool. The big advantages are how this software makes teams more efficient, tracks data more accurately, and provides additional tools outside of processing payments. Some specific business benefits include:

  • Higher employee morale
    Employees appreciate transparency. And when they have access to what they need, get paid on time for what they are owed, and can live their lives otherwise unimpeded, they are happier with their workplace.
  • Improve security
    The personal information of your employees is private, and instead of trying to manage and protect paper files or share that confidential information over insecure channels, everyone has access to what they need without compromising any security measures or data.
  • Deepen business insights
    When payroll information is digitized, processed using advanced and automated software, and integrated with other business tools, it is easier to understand the financial insights for companies. Budgeting, department costs, departmental revenue, and even real-time data can be used for time-sensitive decision-making.
  • Improve reporting
    Payroll software makes more accurate calculations and documentation when it comes to reporting for compliance and any kind of tax needs.
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Payroll software has a lot of advantages that are not only convenient but increasingly essential for modern companies who want to minimize mistakes and continue to function efficiently. Using payroll software, you can promote the following benefits for your employees:

  • Timeliness and accuracy in pay
    There are endless factors that affect payments for employees, like mergers and acquisitions, shifts, new hires, salaries, bonuses, etc. Having a resource like a payroll software allows organizations to get the right payments to the right employees every time, which boosts trust between employees and employers and ensures people have the money they need for expenses.
  • Transparency for businesses
    Personal costs add up for businesses, and it can be difficult to manage those costs among the rest of your organization’s spend. Great payroll software integrates with other departments like accounting so organizations can enjoy greater transparency and perspective for budgeting, reporting, and allocating resources.
  • Flexibility
    Payroll software is designed to adapt to your line of business and scale with the size of your organization, so even when your company is facing large-scale changes, this type of software should not only keep up with those changes but make them easier. For example, if a corporation opens a new office in a completely new location with different tax regulations, payroll software should automate and adjust to the new rules for those employees.
  • Allows for more time on high-level tasks
    Instead of spending valuable time processing payroll using outdated methods, organizations can focus on the most important aspects of their business, like innovation and fulfillment.

The benefits listed above will all depend on the software that you use—not all systems work the same way or meet higher standards. The software should perform all the functions your organization uses and be innovative, customizable when needed, and user-friendly for everyone. When trying to determine what payroll software to purchase, ask the following questions to find the right fit for your organization.

  • What size is your business?
  • How many employees do you have?
  • Are your employees hourly or salaried?
  • How often do you pay your employees?
  • What is your budget for payroll software?
  • Who will manage your payroll calendar?
  • Does the system support every region where you have employees?
  • Does the software integrate with your other core business systems?
  • Is the software easy to configure?
  • Are you experienced with organizations like mine?
  • Is the software easy to use?

Again, no two payroll software systems are the same or created equal, but there are some basic functions that you should ensure your program has. If you are going to pay for the software, make sure you are getting the biggest bang for your buck that will take the more laborious tasks using the following features:

  • Calculate wages earned
    This one is a fundamental function of payroll software; make sure the system you get can automatically calculate the wages of employees whether full-time, part-time, etc.
  • Integrate payroll with time and attendance
    The best programs will help you incorporate your payroll processes with timesheets and attendance practices. This will help ensure all time management factors are digitized and automated, whether your employees are hourly or salaried.
  • Withhold taxes and other deductions
    You should be able to trust the software to accurately calculate and automatically withhold taxes and any other customized deductions for employees. Those deductions are usually editable by the employees themselves, too, so they can tailor their paychecks as needed.
  • Pay employees
    While you may still have managers approve timesheets and other elements of payroll, your software should be able to make automated payments according to your setup. If you pay employees every Friday, you should be able to set those payments up weekly
  • Run payroll reports
    Running your estimates and cross-checking your finances with any tax liabilities can be stressful, wearisome, error-prone, and time-consuming. Payroll software can run payroll reports for you so that you can get the accurate information you need in an instant.
  • Access important tax forms
    Both HR professionals and other employees should have access to tax information and tax forms. These payroll systems should also be safeguarded with security features that guarantee only the relevant people can view confidential data.

You may find that your organization values certain features over others, but especially if you are paying a solid sum of money to use the software, do not accept anything less than the above attributes.

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Payroll software is transforming procedures for human resources and managers so that everyone is on the same page with the best visibility. Employees have their needs met, are paid what they are owed on time, and can access essential information as needed. Meanwhile, HR can focus on more demanding and impactful work to optimize the function of your organization.

ServiceNow provides users with a self-service platform that empowers them to easily locate all the payroll information they need, directly when they need it, with ServiceNow Knowledge Management. By consolidating this information in a powerful knowledge base, employers can reduce the workload for their HR teams and provide direct information access 24/7. Additionally, ServiceNow's Case Management solution provides employees with the ability to submit requests regarding payroll questions so they can be answered immediately by HR teams. This feature streamlines the payroll process and helps to ensure that employees receive timely and accurate responses to their inquiries.

Through effective and easy-to-use self-service options, ServiceNow solutions provide employees with easy access to everything they need to optimize their approach to payroll. Reduce HR workloads, give your employees the power to find answers to their questions, and streamline your payroll process like never before to improve employee satisfaction, increase productivity, and reduce costs.

Make payroll a breeze; contact ServiceNow today to see how.

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