Business owners have a general sense of most HR terms, but still some questions keep coming again and again. In particular, the relationship between payroll and HR often creates confusion

1. What’s the role of HR in
payroll processing?
Business owners have a general sense of most HR terms, but still some questions keep
coming again and again.
In particular, the relationship between payroll and HR often creates confusion.
We often hear questions like –
What is the role of HR in payroll processing?
Does HR include payroll?
What is the connection between HR and payroll?
What are the advantages of integrating HR software and payroll software?
Let’s address these questions in this blog post.

2. What exactly is the role of HR in payroll processing?
The role of HR in payroll processing is crucial. HR (Human Resources) plays a
significant role in ensuring accurate and timely payment to employees.
Here are some specific responsibilities of HR in payroll processing:
1. Employee Data Management: HR collects, verifies, and maintains employee
data such as personal information, employment details, tax withholdings, and
benefits enrolment.
2. Time and Attendance Management: HR tracks employees’ working hours,
leave records, overtime hours, and other attendance-related information. This
ensures accurate calculation of wages.
3. Payroll Calculation: HR works closely with finance departments, or outsourced
payroll providers, to calculate employee wages based on the agreed-upon pay
rates, deductions, bonuses, and allowances.
4. Compliance with Employment Laws: The human resource department
ensures that payroll processes comply with labour laws regarding minimum wage
requirements, overtime regulations, tax withholdings, and other applicable legal
obligations.
5. Payroll Administration: HR handles administrative tasks related to payroll
processing, including preparing pay cheques or electronic transfers for
employees, distributing payslips or statements, and addressing any
payroll-related inquiries or discrepancies.
6. Benefits Administration: In most organizations, HR manages employee
benefits programs such as health insurance, retirement plans, and other
voluntary deductions that impact payroll processing.

3. 7. Reporting and Record-keeping: HR maintains accurate records of payroll
transactions and generates reports for management’s review or external audits.
These reports may include payroll expenses, tax filings, year-end reports, etc.
Overall, the role of HR in payroll processing involves–
Managing employee data accurately and ensuring compliance with relevant laws and
regulations to facilitate smooth salary payments to employees.
Does HRMS include payroll software?
Yes, HRMS (Human Resource Management System) typically includes a payroll
module. HRMS is a software or system that helps organizations manage various HR
functions and processes efficiently. While the specific features and capabilities may vary
depending on the HRMS software, it commonly includes a payroll module as an integral
part.
The payroll module within an HRMS enables organizations to streamline and automate
the payroll processes. It allows HR professionals to accurately calculate employee
wages, process payments, handle tax withholdings, deductions, bonuses, and maintain
compliance with employment laws and regulations.
By integrating payroll within an HRMS, organizations can have several
advantages:
1. Centralized Data: The integration of payroll with other HR functions in an HRMS
enables centralized employee data management. This reduces redundancy of
data, improves accuracy, and also ensures consistency across different
processes.
2. Time and Cost Efficiency: Automating payroll processes through an integrated
system eliminates the need for manual calculations. It also reduces paperwork.
This saves time for HR professionals and minimizes errors. It also helps in faster
processing of salaries and reduces administrative costs.

4. 3. Compliance Management: An HRMS with a payroll module ensures adherence
to labour laws and regulatory requirements related to payroll processing. It
assists in accurate tax calculations, generating necessary reports like tax filings
or year-end documents, thus facilitating compliance with legal obligations.
4. Employee Self-Service: Many modern HRMS systems provide self-service
portals for employees. These portals allow them to access their payslips, view
tax information, update personal details relevant to payroll processing (such as
bank account information), and submit reimbursement claims online.
5. Reporting and Analytics: An integrated payroll module within an HRMS provides
comprehensive reporting capabilities. It generates reports on various aspects of
payroll such as expense analysis, salary distributions, overtime tracking, etc. It is
a great help to management in making informed decisions.
So we can say, while not all HRMS systems may include a payroll module, it is a
common and valuable component of an HRMS. Its integration within the system offers
several benefits in terms of efficiency, accuracy, compliance, and employee self-service.
What is the connection between HR and payroll function?
The connection between HR (Human Resources) and payroll is closely intertwined. HR
and payroll work in collaboration to ensure accurate and timely payment to the
workforce.
Key connections between HR and payroll:
1. Employee Data: HR is responsible for collecting, verifying, and maintaining
employee data such as personal information, employment details, tax
withholdings, benefits enrolment, and changes in salary or position. This
employee data is vital for accurate payroll processing.

5. 2. Salary Determination: HR plays a role in determining salaries based on various
factors like job responsibilities, experience levels, market trends, internal policies,
and negotiated agreements. The payroll department relies on HR’s input to
calculate wages accurately.
3. Time and Attendance: HR tracks employees’ working hours, leave records,
overtime hours, and other attendance-related information. This data is crucial for
calculating wages correctly in the payroll solutions.
4. Payroll Processing: Once HR has collected relevant employee data and
attendance records, it shares this information with the payroll department or
outsourced providers responsible for processing payroll.
HR ensures that the necessary calculations regarding wages, bonuses,
deductions (such as taxes or benefits), and compliance with labour laws are
accurately implemented in the payroll system.
5. Compliance with Employment Laws: Both HR and payroll team must work
together to ensure compliance with labour laws related to minimum wage
requirements, overtime regulations, tax withholdings, benefits contributions, etc.
HR provides guidance on legal requirements while the payroll department
ensures that these requirements are met during salary processing.
6. Communication with Employees: When it comes to communicating changes in
compensation or benefits to employees (such as promotions or pay raises), it is
typically handled by HR.
Payroll relies on HR to provide accurate information about any updates or
changes that impact an employee’s salary.
7. Problem Resolution: In the case of any discrepancies or issues related to
salaries or payments, both HR and the payroll department collaborate to
investigate and resolve them effectively.

6. HR communicates with employees to understand their concerns, while payroll
investigates the technical aspects of the problem.
8. Reporting and Record-keeping: HR and payroll departments work together to
maintain accurate records of payroll transactions, employee earnings, tax filings,
benefits contributions, and other relevant information. These records are
essential for audits, financial reporting, and compliance purposes.
Overall, the connection between HR and payroll is crucial for ensuring accurate,
compliant, and timely payment to employees while maintaining proper documentation of
all payroll-related activities.
Is payroll handled by HR?
Payroll is typically handled by the HR (Human Resources) department in established
organizations. The HR department plays a central role in managing various payroll
activities.
Here’s why payroll is handled by HR :
1. Employee Data Management: HR is responsible for collecting and maintaining
employee data, including personal information, employment details, tax
withholdings, benefits enrolment, and changes in salary or position. This data is
essential for accurate payroll processing.
2. Time and Attendance Management: HR tracks employees’ working hours,
leave records, overtime hours, and other attendance-related information. This
data is used to calculate wages accurately in the payroll system.
3. Payroll Calculation: HR works closely with the finance department or
outsourced payroll providers to calculate employee wages based on pay rates,
statutory deductions (such as taxes or benefits), bonuses, and allowances. HR
ensures that all relevant factors are considered during the calculation process.

7. 4. Compliance with Employment Laws: HR ensures that payroll processes
comply with labour laws regarding minimum wage requirements, overtime
regulations, tax withholdings, benefits contributions, and other applicable legal
obligations. Staying updated with changes in employment laws is crucial for HR
to maintain compliance.
5. Payroll Administration: HR handles administrative tasks related to payroll
processing, such as preparing pay cheques or electronic transfers for
employees, distributing payslips or statements, addressing any payroll-related
inquiries or discrepancies from employees, and maintaining proper
documentation.
6. Communication with Employees: HR communicates important information
about compensation changes (such as promotions or pay raises) to employees.
They inform employees about how their salaries are calculated and provide
assistance if there are any questions or concerns regarding pay.
7. Problem Resolution: In the case of any discrepancies or issues related to
salaries or payments raised by employees, it is often the HR department that
investigates and resolves them effectively in collaboration with the payroll
department.
8. Reporting and Record-keeping: HR maintains accurate records of payroll
transactions and generates reports for management’s review or external audits.
These reports may include payroll expenses, tax filings, year-end reports and
other relevant information.
While the HR department is typically responsible for handling payroll, it’s important to
note that some organizations may have a dedicated payroll department or outsource
their payroll processing to external service providers.

8. In such cases, HR still plays a crucial role in coordinating and providing the necessary
data and information for accurate payroll processing.
Summary: Generally, payroll function is a part of human resources department. And even if it is
kept separate or the payroll function is outsourced, HR plays a significant role in payroll
generation for employee compensation.
A wide range of payroll activities are handled or supported by the HR team. Without close
coordination between HR and payroll, payroll compliance would not be adhered to. And errors
can crop in the salary calculations.
It’s highly recommended to keep payroll as an integral part of HR function
About Us:
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automation solutions. We are here on the HR-Tech scene for
more than a decade, creating innovative products & solutions,
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Our team of young and experienced professionals get the kick
out of solving business and HR scenario challenges! Tougher it
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HR Automation is our passion. Along with HR processes, we
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