17 Awesome Advantages Payroll Automation Delivers for Your Business

Jacqui Coombe



Payroll automation involves the use of a software platform to calculate employee pay. These all-in-one tools can process everything from tax withholdings to benefits and overtime payments.

The core benefits of payroll automation include time and cost savings as well as accuracy. According to research, automation can lower your payroll processing expenses by as much as 80%.

However, organisations of all sizes can reap other advantages from payroll automation. Here are the 17 most significant ways payroll automation can drive enhanced processes and improve outcomes for your business.

1. Eliminate most manual processes

Manual processes are some of the most labour-intensive payroll tasks. This is whether it’s your employees tracking their work hours on a spreadsheet or payroll staff manually working out wages and benefits.

Manual payroll errors can cause payment delays and disrupt your business. They can be costly to identify and correct.

Late payments can lower employee morale and, in some cases, lead to stress, worry, and risks impacting employees’ financial situation.

With an automated system, you’ll eradicate these tedious, time-intensive procedures. What’s more, you’ll likely improve accuracy as well.

2. Minimise errors

Manual data inputting, calculations, and checks can be subject to frequent human errors.

The intricacy of payroll regulations and unique requirements for different groups of employees add to the complexity of the function.

You have to take into account different shifts, awards, overtime, and benefits for each employee. It takes only one wrong digit or number to lead to a paycheque mistake or even a complicated tax error.

With payroll automation, these errors associated with manual inputs and calculations can be reduced or even eliminated.

Take note, poorly managed payroll processes could lower morale and increase turnover. It could lead to poor reviews from employees and reputational damage.

3. Track work hours

Eliminate manual attendance record-keeping with automated payroll systems. These can be integrated with building-access cards, computer log-in platforms, and other tools.

The bigger your organisation, the more challenging manual tracking of work hours becomes. As your workforce grows, an automated system ensures accurate work-hour tracking while reducing administrative burden.

4. Automate payroll compliance

Do you have in-house employment law experts who oversee your payroll compliance? If employing a team of experts isn’t cost-effective for your business, your best option is to use an automated payroll system.

Payroll, wages, salaries, and benefits are subject to frequent regulatory changes. Automated payroll, such as through a software platform, can keep you ahead of compliance.

This can reduce the risk of costly non-compliance outcomes such as penalties for even accidental underpayments. It can ensure employees are paid correctly and tax withholdings also reflect the latest legal changes.

5. Save time on payroll calculations

Manual payroll calculations can be time-consuming and the risk of inaccuracies due to human error can be high.

Automating payroll calculations can improve accuracy and save you considerable time. This allows you to direct your labour resources to more value-adding activities for the business.

You’ll have the confidence of knowing you have accurate figures for salary, benefits, overtime, deductions, and perks.

6. Streamlined payslip production

Payslip generation used to be a time-consuming process, traditionally requiring manual checks. With an automated system, you can create payslips and amend them with a click of the mouse.

Automating payslips can also ensure greater accuracy. It can reduce the risk of human errors that, again, cost your business to rectify.

7. Accessibility and reporting

Automated payroll systems give you easy access, typically through the cloud. Instead of paper records or complex spreadsheets, HR and managers can access the information they need through an integrated platform.

You can generate detailed reports to assist with decision-making, such as costings forecasts or strategic payroll decision-making. Details are updated in real-time, so managers have the latest information at their fingertips.

You can also set different access levels to boost the security of your employees’ data and manage who can make changes.

Payroll platforms let you generate specific reports such as attendance and leave summaries for groups and individuals. It’s also easy to produce employee earnings reports, tax reports, cash-requirement reports, and much more.

8. Safeguard private data

With payroll data, you’re collecting highly personal data about your workforce. Spreadsheets and paper files are inefficient and potentially unsafe ways to keep essential records.

Storing physical copies is space intensive. It can heighten the risk of data theft if you don’t have adequate physical barriers and security features in place.

Automated payroll platforms typically include security features. For many platforms, these could be encryption measures, firewalls, password access, and other tools that secure your employee’s confidential data.

Your organisation likely has a legal responsibility to safeguard this data, so it’s important for compliance purposes as well.

9. Self-service tools

Payroll platforms often come with self-service tools that allow employees access to details about pay and benefits.

These can boost transparency and employee satisfaction. It can also save time for your payroll function. Your payroll staff can probably use their time better than having to deal with numerous requests for paper printouts when employees want more details about their pay and benefits.

Your staff will be able to log in and clarify things like how their working hours are used to work out exact payment amounts. They might be able to request leave and directly communicate with HR through the platform.

Your employees can update their contact details and bank account information without needing to go through HR. All of these features can make things easier and more flexible for both your HR function and your workforce.

10. Upgrade the HR function

Payroll automation can upgrade your HR function by allowing your HR team to concentrate on more strategic activities that bring value to your business.

Instead of performing manual tasks like tracking work hours, calculating time off, and producing payslips, HR personnel can concentrate on other responsibilities.

These can include innovative ways to engage employees, implementing effective training programs, and creating more effective recruitment processes.

11. Reduce payroll management expenses

Payroll automation can lead to lower payroll management expenses. You don’t have to have dedicated payroll staff and finance specialists as the software will do complex calculations and factor in regulatory updates without your input.

You’ll be able to run payroll processes in minutes instead of hours or days. Finally, you’ll also save on costly errors that tend to be more likely with human, manual calculations.

12. Timely payments

Accurate, timely payments are easy to achieve with payroll automation since you can run payroll in a matter of minutes. Even with a large workforce, you can deliver timely payment for staff, without the repetitive and time-consuming need to write cheques and make manual deposits one by one.

Even if you have HR staff who are sick or on leave, an automated system can ensure the continuity of your payroll function. This could lead to higher employee satisfaction and save you from having to deal with disgruntled employees and complaints.

13. Automated recordkeeping

For all businesses, maintaining accurate records for a given number of years is essential for both compliance and payroll accuracy. Payroll automation can streamline your tax filings and reports by ensuring you keep accurate records.

All payslips, periodic reports, databases, and tables are securely retained in the cloud. These can be backed up regularly so you don’t run the risk of losing invaluable data.

You can easily fulfill compliance requirements to retain tax and other records for a given number of years. You won’t need considerable physical space to keep paper records that are easily misplaced and hard to access.

14. Simple updates and editing

Payroll automation platforms make it simple to update employee information and keep it accessible for all relevant parties, including HR personnel and managers. You can effortlessly update employee records with their changed bank account or address details.

These will then be automatically reflected in their payslips and other documents. In addition, other updates that can be easily made with payroll automation include changes in last names, wage increases due to raises, and details for new hires joining your organisation.

15. Integrations

Payroll automation software can be integrated with other platforms like accounting and HR software. This makes data updates and migration simple.

These different tools can communicate with each other, share data, and access information in real-time to generate updated reports. Integration also makes it simple to manage your employee data in a centralised location.

16. Automatic filing

Payroll systems can automate tax filing. This means time savings as your HR staff won’t need to keep track of deadlines manually.

It also ensures effortless timely filings, reducing the risk that your organisation may be subject to fines and other penalties for missed deadlines.

If your business spans multiple jurisdictions, your tax filings could be even more complex. Payroll automation can also make it simple to keep abreast of tax law changes with your calculations and filings.

17. Contractor management

Your business likely works with freelancers and independent contractors from time to time. Payroll automation can also facilitate contractor management, making the process streamlined and compliant.

For large organisations that regularly engage with and pay contractors, payroll platforms can make both local and global contractor payments easy. Recordkeeping, tax, and other compliance obligations are automatically taken care of.

You won’t have to get detailed specialist advice to verify your calculations and payments reflect legal requirements.


Automating payroll has countless advantages for organisations. It speeds up your processes and boosts accuracy. Your business will likely save considerably on time and costs, and your staff can direct their time to more profit-generating activities for your business.

Compliance is another key advantage. Up-to-date compliance with tax, employment, and other regulations is built into payroll platforms. This saves your HR and payroll team from keeping up with constant legal updates and the complexities of applying these to individual employees.

Ultimately, payroll is a complex function for which accuracy and legal updates are fundamental. As your business and workforce grow, the more manual payroll process you’ll need to deal with in the absence of automated tools. As such, automation can lead to numerous advantages that impact your whole organisation, from higher employee morale to improved and informed strategic decision-making by management.

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Jacqui Coombe has been a prolific reader since childhood, and now channels her love of the written word into writing content on a range of topics from business, marketing and finance to travel and lifestyle.

Santa Monica, CA

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