The line between the team that manages employees and the team that processes employee compensation is so indistinguishable that we think they are the same. Although the payroll department is often mistaken as the same as the HR department, it is essential to know how the two differ from each other.
There is no right or wrong way of organizing the different departments that manage employees and their compensation. Sometimes the payroll team is under the finance department; in other instances, they work closely under the same team as the human resources.
So how do we clearly draw the line between HR and payroll?
At a glance, HR is concerned about hiring a person fit for the job while payroll compensates a person according to the job performed. To produce a better result on outputs from both teams, company owners should know the differences between the two.
Human Resources primarily manage all activities and transactions that involve the employees of the company. HR is responsible for employee hiring, retention, and promotion ensuring that all the company’s regulations are compliant with labour laws. HR is also responsible for implementing programs related to employee motivation and development by creating compensation and benefits packages.
The payroll team is generally responsible for processing employee compensation. Salaries, bonuses, and reimbursements are a few payroll services that this team is in control of. The payroll department also takes care of reconciling payroll data, reporting taxes and verifying all payment information is accurate. The functions of the team are essentially finance-related based on the HR records.
Probably the main difference between HR and payroll are the people being hired to be part of each team. Those who fortunately fit under HR roles should have organizational skills and employee relation skills to promote collaboration and teamwork. On the other hand, those who would want to work in payroll services should have computer proficiency and solving skills.
Below is a summary of HR and payroll functions that would help you distinguish the differences and similarities between them.
|Functions||HR Team||Payroll Team|
|Responsible for guiding employee conduct at work and even on social media||Yes|
|Handles the correct payment for employee services||Yes|
|Knowledge of tax rates and payments||Yes|
|Organizes training for staff||Yes|
|Implements timekeeping and reviews time sheets||Yes|
|Pays bonuses and incentives||Yes|
|Verifies and stores employee data||Yes|
|Uses employee data for the computation of payouts, salaries or wages||Yes|
|Updates salary or compensation changes||Yes|
|Approves payments of bonuses, salaries and incentives||Yes|
|Hires new employees||Yes|
|Settles employee back pays and tax obligations||Yes|
Although there is a distinction of functions between HR and payroll teams, integrating the two roles together is possible through apps and software such as Zebra. Integrated payroll and HR solutions are now readily available for companies who would want to reconcile the differences between the two.
Separating HR and payroll can be very functional but may lead to delays and irreconcilable discrepancies. To avoid further confusion between the two, companies and business owners should consider integrated HR and payroll systems to
Although the integration of HR and payroll functions sounds beneficial to your organization, not all software out there may fit your requirements.
Here are a few of the things you should look for in an integrated system for human resources and payroll:
HR and payroll functions are intricately intertwined with each other. Having software as a service and other cloud-based solutions are, no doubt, the best way to reconcile the discrepancy between the two. Integrating these two essential aspects of an organization will not only trim down the nuances of employee management but will also save your organization from data errors, tax payment delays, and employee dissatisfaction. Considering integration through Zebra and other SaaS solutions can help you gain employee confidence and productivity.