HR and payroll responsibilities

Human resources and payroll are two critical functions for any business, no matter what industry you operate in. Each has its own domain. Payroll works to manage your employees’ paychecks, withholdings, and PTO. HR works to protect the business and employees while keeping employees happy and synergized with the company mission.

So, how should payroll and HR interact? If you’re starting out in business and want an explainer, or if you’re thinking of restructuring your current organization, read on. In this post, we’ll cover the following topics:

• What is payroll?
• Does payroll fall under HR?
• How does payroll interact with HR?
• Payroll functions
• HR functions
• How to improve how HR and payroll work together at your business
• Maintain clear communication
• Establish a centralized data management system
• Ensure roles are clear to employees
• Streamline HR and payroll

Before we get into the details, it’s good to first get a firm grasp of the basics: What, exactly, is payroll?

What is payroll?

Payroll is the process of paying employees in the workplace. Calculating employee wages and factoring in federal and state payroll taxes are all part of running payroll. Payroll can also refer to employee financial records at a company, paychecks sent to employees, and employee wage records kept annually.

Alongside inventory and other overhead costs, payroll might be a company’s most expensive overhead expenditure. Furthermore, the payroll procedure is complex. But knowledge of each component of payroll may help you have a better understanding of your company’s finances. It can also help you stay in compliance with federal and state labor and tax regulations.

Are you just starting out in business? Read our quick guide to hiring employees to gain insight into the best way to conduct your hiring process. And don’t forget to check out our step-by-step guide on how to do payroll.

Some of the topics that are likely to fall into your payroll department’s responsibilities include:

• Employee pay, including pay rates, raises, and bonuses
• Benefits administration, such as health care, dental, and vision
• Retirement account administration, such as employer-sponsored 401(k)s
• Tax withholding and payment

Payroll administration involves working with people, which raises the question: Is it part of HR?

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Does payroll fall under HR?

It depends on the way your organization is structured. Some managers think that, because payroll deals directly with employees, it’s best suited as a part of HR. However, others may think that the finance and accounting wing of an organization is better built to tackle payroll because of their numbers expertise.

Ultimately, the way you organize your business is up to you. However, some of the ways that payroll and HR interact are good to keep in mind as you finalize business plans or consider an expansion.

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How does payroll interact with HR?

No matter how your organization is structured, it’s important for payroll to work closely with HR. That’s because there are many areas where HR and payroll administration can overlap, such as:

• Negotiating pay
• Negotiating and administering employee benefits
• Bonuses
• Complaints about pay

Ultimately, however, these two departments take different approaches and serve different functions when it comes to these and other issues. Let’s break it down.

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Payroll functions

Payroll functions tend to be more administrative and straightforward. A good payroll department ensures that employees’ pay is correct, delivered at the right time, and documented correctly. Here are some of the payroll functions you can expect to task payroll departments with:

• Processing pay during each pay period and ensuring the right amount goes to the right employee
• Using payroll software to manage employee data
• Managing W-2s and W-4s for employees, including deductions, withholdings, and withholding allowances
• Complying with IRS tax laws, paying payroll taxes, and filing taxes
• Employee time tracking
• Managing deductions to 401(k) contributions and insurance premiums
• Reviewing timesheets at each pay period to ensure that hours, rate, and pay align for each employee
• Verifying new hires’ salaries and ensuring that terminations are fully paid out

Get your payroll system running smoothly with quick insights and payroll tips from QuickBooks!

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HR functions

On the other hand, human resources departments tend to take a more holistic approach. Their functions not only encompass employee pay and benefits but also relations between coworkers. HR professionals are trained in conflict resolution, managing negotiations, and other interpersonal-oriented business needs. Some essential HR functions to keep in mind include:

• Talent acquisition when your company is expanding
• PTO, sick leave, and other time off policy administration
• Processing salary changes for raises and new employees
• Verification of employee information, such as address, phone number, and Social Security information.
• Benefits enrollment for employees using company health insurance
• Conflict resolution between employees and management
• Conflict resolution among employees
• Onboarding new employees and running new employee orientation programs

Having solid HR services at your business can help improve employee retention and overall employee experience. They can also help with everything from data entry to running innovative webinars. The bottom line is, HR professionals are versatile.

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How to improve how HR and payroll work together at your business

Having a robust payroll department and a fine-tuned HR department is critical. However, it’s also critical that these two branches of your company work together in a synergistic and effective way. Here’s what you can do to ensure your HR and payroll teams know exactly how to work well together.

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Maintain clear communication

Every part of a business should maintain clear communication. The relationship between payroll and HR is no different. HR professionals and payroll professionals should maintain constant and clear lines of communication to ensure no information falls through the cracks.

You might have weekly meetings where different professionals can share updates, or a channel on a business messaging platform like Slack. Or your workplace might simply have a shared HR-payroll work environment where coworkers can openly talk to each other. Whatever makes the most sense for your business, it’s essential that these two departments know what the other is up to.

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Establish a centralized data management system

Another way to facilitate HR-payroll relations is to have one shared system for all employee information. A solid HR software platform that can house payroll data, for example, is a great way to make sure everyone’s on the same page. Whenever an HR or payroll professional needs access to critical data, they can simply log on to their shared database.

As an added bonus, using one platform as both your payroll and HR system will likely save your business time and money, too.

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Lastly, one of the easiest ways you can ensure no one is stepping on anyone’s toes is just to make roles clear to everyone. When hiring for these roles, be sure they know what their responsibilities will be and who to check in with periodically.

When everyone is working together like clockwork, mistakes should happen less often and work can be done faster. One of the best ways to reduce errors and improve efficiency is by opting for an all-in-one payroll, accounting, and HR solution.

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Streamline HR and payroll

QuickBooks Payroll paired with intuitive HR outsourcing can be one of the most effective ways to streamline your workflow. QuickBooks payroll is built to take the hassle out of payroll processing, reduce human error, and make essential payroll processing easy to complete in minutes. Some of the benefits you can expect from QuickBooks Payroll and HR services include:

• Ready-made tools and templates: Job descriptions, onboarding checklists, and employee handbooks can all be customized to help your workers perform better.
• HR and payroll together in one place: With HR tools and one-to-one assistance from our partners at Mineral, you can save time, stay compliant, and expand your business.
• Legal compliance: At no extra cost, get up-to-date information on state and federal pay and overtime regulations, as well as the basics of hiring, firing, and employment laws.
• Get in touch with a professional: For help with essential HR concerns, contact a Mineral adviser by phone or online. We can also build personalized handbooks and rules made specifically for your business.
• Stop worrying about taxes:QuickBooks payroll can file and pay your payroll taxes so you can get back to focusing on what matters most: your business.
• Self-service functionality: With an intuitive design built to put the power in your hands, you can gain the insights you need and tackle tasks with confidence.
• Automatic integration: Once you’re set up in QuickBooks Payroll, it’s easy to get started managing your business finances with QuickBooks Online accounting software. Just a few simple clicks get you the automation and insight you need to succeed.

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Opting for a combination payroll and HR system is a great way to improve workflow at your workplace. Plus, with a shared suite of tools in their hands, your payroll and HR professionals will be ready to work together. Whether you need help setting up payroll or managing your business finances top to bottom, QuickBooks is here to help.