Payroll is always a part of both human resources (HR) and finance, making it seem like the treasured kid of most organizations—highly valued for any organization. According to several recent surveys, opinions on where payroll should be there within an organization, with some HR and payroll professionals holding the view that it belongs within the HR department, others holding the view that it belongs within finance, and the remaining group holding the view that it belongs between the two departments.

1. Is payroll a part of HR or Accounting
Payroll is always a part of both human resources (HR) and finance, making it seem like the
treasured kid of most organizations—highly valued for any organization.
According to several recent surveys, opinions on where payroll should be there within an
organization, with some HR and payroll professionals holding the view that it belongs
within the HR department, others holding the view that it belongs within finance, and the
remaining group holding the view that it belongs between the two departments.
Does it really matter where payroll places as long as it is with HR and finance both? This
paper explores these many choices, weighs their advantages, and poses the question.
What is the basic function of Payroll?
Payroll is about remunerating people, and since dealing with people falls under the
purview of HR, this division would be more equipped to handle inquiries and problems
relating to payroll. Numerous payroll-related concerns are frequently linked to HR-related
issues like hiring, firing, salary increases/ appraisals, benefit deductions, and bonus
payments.
Payroll’s position inside the HR department is also suited by the confidential nature of the
information it processes.
Some may further contend that because of the problems they face if payroll system is not
on time, HR payroll software are more aware of the importance of timely payroll
processing.
How does HR Payroll software impact both?
● Some contend that the finance function should include the payroll function. Payroll
is a significant portion of any department’s expenses, hence it should be a part of
finance.
● Few people who have experience in both fields firmly believe that payroll belongs
under finance.
● Since payroll is typically an organization’s major expense, tax compliance and
reconciliations are essential to the organization’s financial stability.
● The payroll function of HR Payroll software is a numbers-driven operation, just like
the finance department. Payroll administration incorporates accounting procedures
and knowledge of those procedures, such as posting to the general ledger.
● It also necessitates a thorough knowledge of tax law.
● Some believe that payroll is better positioned within the finance department to
ensure that it is in compliance with the law!
How to find the middle ground?

2. Many people think that the payroll department is in between the HR and finance
departments of an organization. This well-liked strategy acknowledges that while payroll
has connections to both departments, it does not naturally belong in either. Payroll in the
finance department and payroll in the HR department cannot be different.
Payroll needs to be a part of the two departments. Many people believe that payroll should
be the responsibility of payroll professionals rather than being physically there within an
organization. Numerous businesses effectively outsource their payroll.
Maybe there is no correct or incorrect response, and payroll placement depends on the
industry it serves.
Why do HR payroll software and Finance teams need to work together?
The HR division oversees the daily attendance and working schedules of the company’s
personnel. Payroll processing can only there accurately with this data. A worker’s gross
pay, cost to the business, remuneration, overtime pay, benefits, raises, leave encashment,
incentives, and bonus pay are all decided by HR Payroll software specialists. Employees
typically approach the HR department rather than the finance department if they have any
questions or issues about their pay. Payroll is therefore seen as an integral component of
HR operations.
The technical side of payroll processing undoubtedly influences the finance department in
a firm. They are in charge of figuring out various tax deductions and deducting them from
each employee’s gross salary.
Depending on regional and federal labor rules and regulations, the tax deductions may
vary. The finance department conducts payroll after determining an employee’s net
compensation and gives out pay slips to staff members. In order to assure compliance, the
finance department is also in charge of preserving payroll records and data.
If neither team does its share, the payroll process will degenerate into chaos. Your HR and
finance divisions must communicate effectively at all times. Determine the formula for
calculating salaries and group your staff members according to the nature of their
employment. Then, decide on your ultimate tax deductions, benefits, payment plans, and
payment systems. Setting a mutual deadline for both teams to share the payroll-related
employee attendance and time off information is also crucial.
To know more: https://www.eve24hrs.com/blog/is-payroll-a-part-of-hr-or-
accounting/