Payroll management vs. payroll processing in HR
Payroll as a process is when employees receive a salary for the work they have completed. This process includes reconciliation, deposits and reports of the payments to employees.
Using payroll management software in HR can help reduce the amount of paperwork needed when updating employee payroll information to the Australian Tax Office (ATO).
A payroll software combined with HR functions allows you to handle wage deductions, verify pay data and handle record-keeping in one place. Additionally, payroll management is also in charge of reimbursements, overtime, holiday pay, bonuses, tax compliance, and paperwork for new and existing employees.
HR professionals handle performance management and generally serve as a bridge between management and employees.
As the overall function of HR is people, many different responsibilities fall into their purview. This may include recruitment, staff management, maintaining company culture, staff development and training – to name a few.
The two departments have to work together on different tasks across an organisation. HR and payroll share many functions including salary, bonus, employee benefits, leave, recruitment and termination.
There are several steps HR and payroll teams must take to ensure payroll data is accurate and for the HR software to work optimally. For example, when dealing with maternity leave, there are both financial regulations to follow and a duty of care for employers as well.
Ultimately, it's up to the business owner to decide whether payroll should be in the HR or finance department, or on its own. But for many small business owners, it makes sense to combine these departments into one functional team.