Introduction
One of the biggest administrative burdens that many entrepreneurs face as their team grows is payroll and HR-related tasks. The increase in remote work, the need for compliance, and the new generation workforce have significantly shaped how businesses adapt and integrate HR and payroll software in their daily operations.
Payroll refers to “compensation a business must pay to its employees for a set period and on a given date”. This includes managing employee records, performing payroll calculations and issuing of payslips.
Other payroll administrative tasks include managing monthly employee tax submissions (PAYE, UIF, tax certifications) and other annual reconciliations. As well as other statutory deductions and generating of compliance reports.
HR involves managing all employee-related tasks. Typical small business needs include having proper and relevant employment contract on record for each employee. Full-time employees should receive contracts and remuneration in line with the Basic Conditions of Employment Act.
HR also involves recruitment and performance management. Small businesses often don’t have a dedicated HR or recruitment manager, meaning it’s often an owner or manager who is responsible for hiring. An effective and efficient candidate sourcing process is therefore key to finding and hiring qualified people.
According to the Sage Productivity Tracker, South African companies lost R7.2 billion in economic value to admin in 2018 to administrative costs. Payroll and HR software can help to reduce these costs.
Main Features
Payroll management
Your payroll management tool helps with the administration of an employee’s financial records like the salaries, wages, bonuses, deductions, and net pay.
It ensures details like contact information, addresses, new benefits, salary increases, and promotions are updated as they change. Certain fixed and financial information is submitted to SARS twice a year.
You can use employee self-service tools to let employees update their details, beneficiaries, apply for leave, file expense claims, and more, which removes a plethora of admin away from the HR and payroll teams.
Legislative and payroll reporting
Beyond just generating automated payslips for employees, the right software helps small business owners to adhere to payroll legislation. An automated solution can calculate the complex formulas for the various statutory deductions and generate compliance reports.
Some of the deductions that need to be considered are: PAYE (the tax deducted from your employees), the skills development levy (SDL), Unemployment insurance fund (UIF). Other legally required contributions include the payments to cover Compensation for Occupational Injuries and Diseases (COID). These contributions/payments are paid by the employer, not the employee.
Medical aid, pension, provident and retirement funds
Every business offers a selection of benefits to employees regarding paid leave, contributions towards retirement funds, medical aids, and making certain statutory payments. It is essential to know what is required by legislation and the additional non-compulsory benefits provided to employees.
You don’t have to contribute towards a retirement fund or medical aid unless specified in a regulating measure for that industry or agreed upon in the employment contract.
Data reporting & analytics
Use, measure and analyse all of your workforce data, which helps with workforce planning and managing non-compliance.
A solid audit trail should be a feature of your payroll software. Audit trails are beneficial because they can validate any unusual payments and can track changes to a payroll. Audit trails can also be used if there is any suspicion of fraudulent activities.
Leave management
Leave management is an important part of payroll and HR software. The software will help you to manage both annual, sick, family responsibility or maternity leave. Some software options also offer the option of self-service, where employees are able to apply for leave or download payslips themselves.
HR files management
HR document management helps business owners to manage the entire lifecycle of employee documents to ensure proper storage of required records. This has never been more relevant with the POPIA legislation coming into effect. POPIA requires that employers protect employees’ personal information.
New employee onboarding
Onboarding candidates and employees refers to integrating new hires into the organisation. HR software can help you manage the entire process from new hires, onboarding workflows and generate reports to get insights into employee performance.
Other features
Your software should also be able to handle tasks such as – handle annual, ad hoc and performance bonuses, travel allowance and reimburse kilometers, commissions and overtime, independent contractors and labour brokers, bursaries and other non-cash benefits.
Pricing
Free trial
The free trial can range from seven to 30 days. For most platforms, you can sign up with a Google email account. You will only be required to provide your credit card details once the trial is completed.
Monthly or annual subscriptions
Most HR and payroll software businesses offer annual and monthly subscriptions. Depending on the platform, each plan may come with many functionalities, including basic payroll processing, tax calculations and filing. HR functionalities you can expect are employee onboarding, employee database management, HR files management, employee self-service, time off management.
Buyer's Guide
Cloud-based HR and payroll software has done a lot to ease the administrative burden associated with payroll. Simply put, it offers better and faster software that’s easier for your business to use whereas traditional HR systems required installing across your network. HR cloud systems also allow you to skip on expensive software, which often requires infrastructure and regular maintenance from IT experts. When selecting the right software for your business it’s important to consider the needs of your business, its size and integration with other software, including accounting and CRM.
Consider the following:
Easy to use – An easy-to-use dashboard that allows employers to sign up, add employees and start payroll processing, easily onboard candidates and employees or track time, leave and attendance.
Available anywhere, anytime – Business owners can access their data at any time. All they need is an Internet connection.
Tax submissions – Comply with tax regulatory requirements such as compliance reports and keep track of annual changes to tax laws and regulations that impact payroll tax calculations. A good payroll software solution will be constantly updated to align with the latest tax laws and tables, so you don’t need to update your spreadsheet formulas or learn to make new manual calculations every year.
Unlimited companies, employees and users – Choose a software option that will allow you to grow as you expand and hire more employees. The most effective payroll software allows you to scale for growth. With some cloud solutions, you can pay per payslip per month and easily add more employees as you need to.
High data security -HR is at the forefront of data security. An HR system that not only ensures the security of personal data but also ensures that it is updated and correct, deleted, or anonymised in accordance with relevant legislation is a must.
Flexible pricing – The pricing plan is often based on the employee count. You can also choose between a monthly or annual subscription.
Payroll & HR Software Benefits
- Save time and resources – completely automate administrative tasks.
- Always available – improve accessibility with cloud-based software across devices.
- Bird’s eye view – streamline processes to better visibility into business performance.
- Reduce costly mistakes – eliminate errors with data capture or calculation.
- Reduce risk – put tight financial controls in place to reduce the risk of payroll fraud.
