Most payroll software offers certain basic payroll features to help you pay your employees correctly and on time. For example, payroll processing, tax management, tax form preparations, direct deposits, etc.
Depending on the software, extra features may be included as part of customisable or enhanced payroll package, to help you manage different aspects of payroll effortlessly and reliably.
Various payroll periods
Weekly and monthly pay intervals are standard in most payroll software. If your business has other requirements, make sure that you chose software that can adapt to different intervals (eg fortnightly, quarterly or annual). Some software can support multiple pay schedules, allowing you to customise your pay schedule based on your employees' needs.
Multiple user operation
Smaller businesses may only require support for a single payroll operator at a time, but you should check that multiple user operation is available in case you need it in the future. If you intend to grow your business, choose a payroll system that is easily scalable and customisable according to your changing needs.
Some basic end-of-year reports are included as standard in most payroll software. You should choose software that has flexible reporting and supports online filing - consider features that allow you to handle RTI submission, generate expenses and benefits reports, prepare and print P45, P60, P30 and P32 forms, etc. Other features may allow you to create reports for payroll history, paid time off, deduction analysis and more. You may be able to use template reports from the software or build custom reports, if you need them.
All payroll software will tell you the amounts that you need to pay to employees and HMRC, but check that you can use this information in a way that meets your requirements. For example, you may want the software to create and print payslips for you, or automatically email payslips to employees on a specific date. You may want features that allow you to customise digital paystubs, send payslips in different formats or let staff view their payslips online.
Pension scheme automatic enrolment
Some payroll packages now boast automatic enrolment functionality, allowing you to set up your pension scheme, enrol employees, process opt-out requests, issue communication, make contributions, view reports and more.
Fully featured payroll software may also include functionality to help you calculate and record holiday entitlements, track sick leave or provide self-service to allow employees to request or book annual leave online. Some packages may also be able to keep records such as job position history, previous employment history, education and academic qualifications, references, skills and competencies and training records.
Most payroll software can integrate with another accounting or HR system, which can be highly useful and desirable. For example, time tracking integration can automatically import employee hours from payroll into a HR system. Expense integration can help you automatically synchronize expenses with payroll. This helps to minimise the need for duplicate data entry, and allows you to streamline processes and prevent errors. For integration to work, a payroll product must be compatible with the related system.
Some businesses may prefer to process payroll via their accounting software. However, keep in mind that payroll modules of accounting packages may not always provide all capabilities of a dedicated payroll solution. See payroll software: what it can and can't do.