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?
The Functions of HR and Payroll Departments
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.
The Functions of HR
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.
Functions of Payroll
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.
Similarities and Differences
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 |
Integrated Payroll and HR Systems
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.
Advantages of Using an Integrated Payroll and HR Systems
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
- Efficiently consolidate reports - With an integrated solution, generating reports on employee benefits and payouts can be easily done. Your HR or payroll team dont need to waste too much time chasing information and verifying them. Integrated solutions will allow you to access employee data and reconcile differences in minutes.
- Less Paperwork - The integrated solution lets both HR and payroll teams consolidate information, and update and verify them in a user-friendly dashboard. Once information or data is updated, it will be easier for either team to review and verify. There is no need for them to scramble through physical documents for information.
- Better compliance with tax laws and business regulations - Having an integrated HR and payroll solution helps your organization better comply with tax regulations. The integrated system should help you easily assess the total number of employees receiving benefits for healthcare and other compensation.
- Easy updates - the payroll team dont need to go over tons of paperwork and data to check who got a raise or who has been qualified for a benefit. With an integrated HR and payroll solution, it will be easier to track changes and updates and translate them into payouts.
Features of an Integrated HR and Payroll System
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:
- Cloud-based - Your payroll and HR solution should be cloud-based so it becomes easily accessible for everyone. Employees can do a quick login to update their information wherever they are.
- Accessible dashboard - Data is important when it comes to evaluating employee performance and benefits. Integrated HR and payroll solutions should have an accessible dashboard for managers and other key employees to conduct analysis and make informative decisions.
- Added tools - Tools incorporated in the software should be available for other services. One of the added features that could be very helpful is a tracking tool for schedules, attendance, absences, leaves, and payouts made.
- Report generation - Seamless reporting is one feature of integrated HR and payroll systems that should be readily available. Both HR and payroll teams should have synchronized data that could be formatted and generated into reports for tax filing and other purposes.
Reconciling the Differences Between HR and Payroll Services
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.
