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What is Payroll Software? How to Choose the Best Software for Your Payroll


HRM and Payroll Software

What is Payroll Software? How to Choose the Best Software for Your Payroll

A payroll software application manages, automates, and organizes the entire payroll system. That is all the employee payment processes and operations.........

April 30, 2024
min read
April 30, 2024
8 min read
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What is Payroll Software? How to Choose the Best Software for Your Payroll

A payroll is an integral function of any business. It is the lifeblood of many business operations and can significantly influence a company's success. Running a payroll can be time-consuming and prone to errors if done manually. However, with today’s dynamic technological landscape, businesses don’t have to perform such tasks manually due to an increased use of payroll software systems. With the right payroll software, employee compensation tasks should never be an uphill task.  

Small or large businesses should invest in payroll software system to enhance salary payment operations. For one, payroll software is automated. Therefore, it facilitates employee payment operations and saves time. Second, it simplifies payroll compliance, keeping businesses updated with tax regulations and labor-related laws. In addition, payroll software reduces the risk of errors, unlike manual data entry. All these benefits can increase employee job satisfaction, positively impacting the business. 

Overall, payroll software ensures accurate and timely recording and payments to employees. But what exactly is payroll software? This article discusses in-depth insights to help you understand everything about payroll software. It also provides a guide to help select the right software systems for businesses. After all, employees need to receive their salaries on time. Keep reading to find out more. 

Understanding Payroll Automation Software 

A payroll software application manages, automates, and organizes the entire payroll system. That is all the employee payment processes and operations. Used mainly by HRs (Human Resources) and accountants, payroll software performs various payroll functions such as salary and tax calculations, compliance, generating paychecks and direct deposits, tracking payments, collecting and analyzing payroll data, and maintaining records. Additionally, it can be used manually or on-site, depending on what the business desires. An efficient payroll software system eliminates repetitive tasks, allowing HRs and accountants to focus more on other business aspects. 

Who Requires a Payroll Automation Software?  

Many people assume that payroll software is for established businesses and payroll for those with long-period contracts. However, this is not the case. You need a payroll and a payroll software system as long as you have employees or have employed yourself. This means every business, small or large, no matter the industry, must have a functional payroll system. 

Payroll system examples include in-house payroll, where a business has its team that manages payroll internally. Outsourced payroll solutions where one hires an agency that specializes in payroll. Professionally managed payroll solutions that involve hiring expert CPAs (Certified Public Accountants) or bookkeepers to handle the payroll processes. The last one is payroll software, which any business can use in any industry. 

How Does a Payroll Software Work? 

A payroll software is typically integrated into the payroll system and other central company software and functions to ensure accurate and timely compensation. For instance, it can be integrated with HR, bookkeeping, time tracking, and financial expenses software. Because most software is automated, integration with the payroll software takes a few minutes. However, it is essential to note that integration depends on the type of payroll software. 

Payroll software integration eliminates the need to use separate software, which can be hectic. Most importantly, employees can access the software and enter their personal data and payment details. This means the HR or accountant does not have to do all the data entry work, which is why businesses need an employee self-service payroll software. 

Payroll Software Integration

Payroll integration means connecting a payroll software system to other applications to enable automatic data exchange and system synchronization. Here is a step-by-step process: 

  1. Analyzing the Current Payroll Process 

Before integrating your payroll software system into other applications, assess your current payroll to establish if it requires some improvement and determine the best software for your business. 

  1. Select a Payroll Software 

Choose the right software once you've established the payroll is in order. This means it should match your business needs, be compliant, ensure timely and accurate payments, and, most importantly, perform all core functions of the payroll software mentioned earlier. 

  1. Integrate an Application Programming Interface (API) 

An API is an intermediary software that enables different applications to connect. It is the channel through which data can be shared within a system. You can connect the payroll software to other applications via an API-to-API data connector. Ensure the APIs you use are compatible with the payroll software systems. 

  1. Authentication 

For data protection, ensure secure methods such as API keys or Open Authorization tokens that only authorized personnel can access.

  1. Data Mapping 

Data mapping tracks and evaluates how data from one system corresponds to the payroll software system. 

  1. Data Transfer/ Migration 

Data transfer can be real-time or processed in batches. Real-time ensures data is transferred immediately while batch processing is scheduled in intervals. Once you authenticate and map data, the other applications can initiate requests to the payroll software to receive or send data. 

All in all, key factors to consider when integrating payroll software into other systems include determining the objectives of the integration, selecting a compatible payroll software, conducting tests and data validation, and ensuring the relevant personnel are well-equipped to use the new systems. 

Popular Payroll Software Integrations 

Payroll software can be integrated with various business solutions for smooth workflow. Some of the most common considerations for integration include: 

  1. Time Tracking and Attendance Apps

Attendance applications track when an employee is present for work for a certain period. Employees log in when starting work and log out once they are done. Time tracking monitors an employee's total hours during a specific period. These apps gather information on data, overtime, and Paid Time Off. When synchronized with payroll software, it eliminates the need for manual data entry. 

  1. ATS (Applicant Tracking Systems)

ATS is recruiting software that provides details on new hires and employee updates. Once a new hire is onboarded or employee information changes, the data is refreshed automatically, allowing accurate payroll processes. 

  1. Accounting Software 

Accounting systems contain payroll data and financial reports necessary for payroll processing.  

  1. Expense Reporting 

This component contains detailed employee reimbursement or deduction details that need to be reflected on the payroll software; for instance, if an employee incurred extra expenses for the sake of the company, they need to be reimbursed. In case of any deduction, the payroll database must be updated automatically. 


These HR systems must be integrated with payroll software to enhance payroll processes. HRIS (Human Resources Information System) collects, manages, stores, and processes detailed employee information and HR-related procedures and policies. HCM (Human Capital Management) is a combination of practices that are focused on people resource management. HRMS (Human Resources Management System) is a software that manages HR functions. 

Selecting the Best Payroll Software: Key Factors to Consider 

When choosing payroll software, it is essential to do your due diligence to ensure you get the one that aligns with your business needs and facilitates payroll processes. The following are features to look for in payroll software systems. 


Payroll processing entails numerous tasks that can make payroll software complex to navigate. Complex software can have great features, but it will not benefit the company if it is hard to use. 

Ensure your payroll software system is easy to use and one can quickly find what they are looking for. It should be simple, accessible from different devices, quick, and allow employees and the payroll team to log in without complications. Most importantly, it should be clutter-free and have an intuitive interface that works exactly how a user expects. 

Employee Self-Service 

Self-service payroll software systems allow employees to assume some functions independently without seeking the HR or accountant's approval or help. For instance, it should allow them to enter their personal data and bank details and edit them in case of updates. They should also be able to download their pay slips, claim reimbursements, issue investment declarations, and receive notifications. 


Scalability is a system’s ability to function well and meet the demands of a business. The right payroll software system should adapt to the business changes such as growth. It should feature customization options tailored to a business' ever-evolving needs. 


The best payroll software should be compatible and synchronize well with other business systems. It should integrate with other applications and reduce the need to perform tasks separately and manually. 


Some companies offer payroll software for free. However, other payroll software costs a fee, which varies with different vendors and business needs. Payroll software vendors that require a fee should offer free trials to allow clients to run a test and gauge if it's best suited for their business. Good payroll software should allow you to run a test pay before making any decisions. Before purchasing, it is advisable to make a free trial payroll request. 

High Automation Level 

The goal of using software is to avoid manual work. So, the best software should have a wide range of automation capabilities. 


Payroll contains sensitive data that only authorized personnel should access. Choose software from a trusted vendor that prioritizes the safety of information. When picking vendors, ensure they are ISO-certified and comply with International Security Standards. Avoid any payroll software system with low-security levels because sensitive data must be protected with the highest security standards. 

Types of Payroll Automation Software's

There are several types of payroll software designed to function differently. They also have distinct benefits, allowing businesses to pick whichever aligns with their needs. 

  1. Pure Payroll Software 

As its name suggests, pure payroll software only offers functions that are exclusive to payroll. It is easier and more affordable to set up than other payroll software with extra functions. While it may be affordable, it requires extra manual work, such as entering data and connecting it with other systems. 

  1. HR Integrated Payroll Software

This payroll software is linked to other HR software to facilitate HR payroll functions. It allows the HR team to manage workflows from one place rather than separately. Unlike pure payroll software, whose payroll is its main feature, the HR integrated payroll software has many other features that may sometimes lack functionality. 

  1. Accounting Integrated Payroll Software

This type of payroll is integrated with accounting features to provide interlinked services such as tax filing and calculations. However, businesses may need to be cautious since linking accounting systems with payroll software poses a risk of data breaches. 

  1. Mobile Payroll Software Extensions 

Good payroll software is easily accessible, uses different devices, and still functions well. Payroll software system like Workpay has mobile versions that allow employees to access their salary information anytime and wherever they are. All they need to do is conduct a payroll app download on Play Store, available for Android and Apple mobile devices. 

Even though mobile payroll software is convenient, the connection may not be as reliable as a network connected to an on-site system. 

  1. Payroll Software for Small Businesses 

These are payroll application systems designed to help SMEs (Small and Medium Enterprises) with their payroll needs. Payroll software for small businesses is typically scalable, cost-friendly, and user-friendly.

A good small business payroll sample is Workpay. It is easy to set up, has intuitive features, and provides basic payroll functionalities that align with small business needs. In addition, it ensures compliance with tax and government regulations. 

  1. Regional Payroll Software

These are payroll software tailored to specific regions. They are region-specific due to varying state payroll regulations, tax requirements, and labor laws. For instance, payroll software in Kenya may significantly differ from the payroll format in Nigeria and payroll software in South Africa. This is because they all consider the unique laws and requirements specific to these countries.

What is the Most Used Payroll Software in Africa?

In 2024, the HR and accounting departments have seen exponential changes due to the increased use of technology. Additionally, the remote work model has also changed the game for HR's. This has increased demand for automated processes, and payroll is no exception. Workpay is one of the most used software services in different regions of Africa. It is reliable, convenient, and accurate, making payroll processes a bliss. Other popular payroll system examples include payroll software Xero and Sage payroll. 

A Payroll Software is a Need, Not a Want 

Businesses are increasing, and they are everywhere today. Competition is getting tougher, and only those who embrace technology can survive this demanding and ever-changing landscape. Investing in a payroll software is one way to stay ahead of the game. There is so much to gain from payroll software, which is a critical function for business operations. You will save time and money, attract and retain top talent, make a name for yourself, and facilitate payment processes. 

Workpay, the leading payroll software in Africa, is one application to consider. It offers complete cycle payroll processes, and you don't have to worry about your region or currency. Ours is an accurate, fast, and multi-country payroll. We are compliant and pay employees in multiple currencies. Contact us today to learn more about our payroll services and check our payroll samples.

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Workpay is a HR and Payroll software company that offers time & attendance, payroll, human resource, leave, expenses and remote teams solutions to businesses across Africa.

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