5 Essential features of a good Payroll Management System

payroll management software

Companies have emphasized payroll management in today’s business environment, and this is because of the administrative advantages it may provide a company. On the other hand, payroll administration is one of the most critical and one of the most challenging corporate processes. Consequently, an increasing number of organizations are using payroll management software.

In this article, we will discuss some critical characteristics of a payroll management system. SMEs are now experiencing a difficult period in the market. Using human resources solutions such as payroll software may help differentiate your business from the competition in such a competitive environment


  1. What is payroll management in human resources?
  2. How are the payroll management processes like in 2022?
  3. Which are the challenges that are facing human resources managing payroll?
  4. What is payroll management software?
  5. How many functions does payroll management software have?
  6. Is it beneficial to use payroll management software in today’s business market?
  7. Simplify, streamline and ensure payroll compliance in your company with Connect HR solutions


1. What is payroll management in human resources?


Employees have a continuous critical role in commercial operations. Their functions enable the business to carry out the procedures required to provide the end product or service. As a result, it is the responsibility of human resources and the company’s leaders to reward workers fairly for their work.

As discussed before, payroll administration is one of the most critical and one of the most challenging corporate processes. Human resources’ role is to ensure that the organization’s operations function as effectively as feasible. Among them is employee compensation. However, even though this is a critical human resources function, errors may occur when performed manually, which might have significant repercussions.

Payroll management is the administration and execution of payroll activities by a business. For instance, keep track of employee details, handle payments, monitor hours and manage leave, incentives, and deductions. All of these are payroll management tasks in businesses.

SMEs often have fewer staff than huge enterprises. As a result, all payroll activities are usually conducted manually, and a payroll management system structure is ineffective. As a result, companies implement digital human resources management systems into their organizations.


2. How are the payroll management processes like in 2022?

In 2022, many businesses will use digital solutions to handle their workers’ payroll. These solutions have been made available via human resources service providers such as Connect HR. After years of study and testing in high-demand areas, these solutions have been developed to assist businesses.

These payroll management software applications, which we will explore in further detail below, are used to handle certain payroll operations. Numerous these techniques have become ingrained in the commercial industry throughout time. However, many of them have been tailored to the specific demands of each nation, market, and firm.

If HR do not make the payroll process appropriately, this might risk employee morale and corporate performance. Additionally, non-compliance with law rules governing employee compensation includes income tax, workers’ compensation, and more. These qualities are critical for a labor organization to operate effectively in 2022.

The payroll process is separated into three stages to guarantee compliance with these elements: pre-payroll, payroll, and post-payroll. This method of organizing the payroll process has already been demonstrated to be an effective structure for human resources. Consequently, human resources teams can effectively complete these tasks.


2.1 Pre-payroll process

This first step of payroll processing involves collecting employee data and establishing all relevant payroll regulations. This has been developed since payroll consists of a plethora of variables. Pay is influenced by various factors, including attendance, productivity, and more.

Communication with multiple departments and workers is critical for the payroll process. Data collection may be a challenging task in international firms and massive organizations. However, inputs are derived from a single source or fewer teams in a small firm.

After acquiring the data, it is time to ensure that it complies with business regulations. This is performed via validating investment declaration bills, reimbursement receipts, and variable payment data. Management must draft and approve these rules to guarantee that payroll operations and administration are methodical. Among the most significant are the following:


  • Time & Attendance Policy
  • Employee Compensation Policy
  • Leave and Benefits Policy
  • Reimbursement Policy


2.2 Payroll Process

Human resources staff must do the calculations required to make payments when it comes to payroll. Thus, the gathered and authorized input data is loaded into the payroll management system for payment processing at this stage. The first part of the process is critical, as you would not have the essential knowledge without it.

After HR evaluates all of these elements, they calculate the salary. These components include statutory incentives, statutory bindings, and appropriate taxes. In the UAE’s case, the WPS system is also took into consideration. Furthermore, the final result of adjusted taxes and other deductions is the In-hand salary.

To prevent mistakes, human resources normally reconcile the statistics and double-check the data at this point before processing payroll. This ensures that the HR make the payments accurately and follow all applicable regulations.


2.3 Post-payroll process

The labor does not cease even if the company make the payment. Post-payroll is the payroll process’s third and final step. This is the most critical stage of the three. Particularly in countries with the WPS, such as the UAE. Consequently, it is the longest owing to the inclusion of essential functions inside businesses.

Depending on the country, Companies send the payment to either personal accounts or company-assigned accounts. Companies may pay this remuneration in cash or installments in certain instances. In the UAE, the WPS legislation establish the payment options. A government initiative that guarantees workers get their wages accurately and on schedule.

The most critical part of this step is to keep the data provided by payroll. This comprises an accurate record of employee paychecks, tax information, withholdings, and a ledger with matching accounting records. This information is necessary for the company to calculate future employee benefits.

Payroll would be incomplete without tracking all financial transactions. Salaries are among the highest running costs that companies record. It is vital to monitor economic data as part of the payment process. The human resources team performs this via the department’s informative reporting.



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3. Which are the challenges of managing payroll?

One of the most time-consuming jobs is payroll administration when it comes to human resources. This is because each employee’s pay package contains a wealth of information. Additionally, there is compliance with applicable legislation and the possibility of payroll computation errors.

As a result, human resources often encounter a variety of issues. We shall describe one way to address these issues via payroll management software in the next section. In 2022, these issues may be classified into data security, maintaining regulatory compliance, and a lack of process flexibility.


3.1 Data security

Payroll processing requires a significant quantity of employee personal information. Companies require personal information about employees, as information about their bank accounts, rental agreements, and other private information. The human resources department often utilizes this data to handle payroll.

However, employee data may be hacked, and a company’s reputation can be badly harmed by neglecting to safeguard it. Paper-based files are prone to be lost. Even if the data is saved in spreadsheets, it is vulnerable to hacking with just a passcode. As a result, the human resources team should preserve all this sensitive employee data.


3.2 Keeping up to date with statutory compliance

If we discuss a critical and complicated aspect of payroll, we can discuss statutory compliance. If not carried out properly, submission can be time-consuming and costly. HR make these calculations using information from each employee’s paycheck. Additionally, businesses must submit such estimates to the legislature periodically.

Most businesses manage compliance through spreadsheets and other manual processes, which is not the most efficient way to stay compliant. Calculations are tedious, time-consuming, and inaccurate. Additionally, it is crucial to keep in mind that laws are continuously changing.

As a result, without the assistance of payroll software, this process becomes a little more challenging for HR.


3.3 Lack of process flexibility

Employees frequently reach the payroll department to have their information updated. The staff regularly updates rental contracts, bank account information, and other critical documents, and this is to make sure the process runs smoothly.

Multiple update submissions necessitate significant time and money for all parties. If all these records are not updated, salaries may be incorrectly credited. Employees may fail to submit information on time. This effectively halts the operation and makes the whole process a source of frustration for the entire organization.


4. What is payroll management software?

As this article has demonstrated, the solution to the issues is implementing payroll management software. This type of software automates the calculation and handling of employee compensation. Additionally, this type of solution automates the generation of tax forms and simplifies administration.

This digital solution created by experts in the field, reduces problems for human error. In 2022, any organization that wishes to increase the performance of all departments must implement payroll management software.

The benefit of this type of payroll management system is that it you can integrate it with other human resources management solutions. Attendance software, for example, or the well-known HRMS integrates flawlessly with dedicated payroll software. However, HRMS is the preferred option because it manages and helps streamline the human resources process.



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5. How many functions does a payroll management software have?

Companies such as Connect HR have perfected these sorts of software. They initially performed just a few duties, such as doing rudimentary payroll calculations and maintaining records of the computations conducted. They now automate every payroll procedure.

Some of the functions performed by today’s payroll management software are:


  • Statutory Compliance
  • Compensatrion structuring
  • Calculation of benefits
  • Employee Loans
  • Expense management
  • Remote payment
  • Reports
  • Payroll integration
  • Calculation of payroll
  • And more.


6. Is it beneficial to use payroll management software in today’s business market?

It is worth emphasizing the advantages of payroll software in a labor organization at this point in the article. Your workers will profit from the payroll management procedure since it instills structure and routine in their lives. Additionally, it offers them a dedicated avenue for resolving grievances.

Effective payroll management software may benefit a business in the following ways:


  • Time-saving
  • Data security
  • Payslip generation
  • Law compliance
  • Cost-effective
  • Helps SMEs administration
  • Automation of payments
  • Productivity boost
  • Remote access
  • Make payroll reliable
  • Streamlines all payroll processes


7. Simplify, streamline and ensure payroll compliance in your company with Connect HR solutions

As previously said, payroll processing is crucial for enterprises, as is payroll software. They are critical for maintaining organization in today’s corporate environment. This benefits not just internal operations but also the general productivity of your business. As a result, your business will stand out from the competition in the market.

Connect HR provides the best human resources solutions in the UAE and the Middle East. Our solutions are industry leaders with over two decades of expertise. This positioned us as one of the top HR software and solutions suppliers in Dubai.

In the Dubai company market, the WPS-Payroll solutions, for example, are among the top solution. However, our HRMS is the answer if you are seeking the ultimate payroll and human resources management tool. With this solution, you can simplify, streamline, and assure the HR department’s processes.

Would you like to contact Connect HR for more information about our company’s payroll software? If you have questions about our solutions and services, call us at +971 43 316 688. Also, write us an email at [email protected].

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