What is a payroll management system and how does it work?

A payroll management system is exactly what it says on the tin: a system for managing payroll. When we say ‘payroll’, we’re talking about the process by which employers withhold some of their employees’ earnings to pay directly to the government as tax.

Payroll management systems simply make sure this process runs correctly and easily, processing the data you input; working out how much you owe, to whom, and when; and ensuring that all payments are sent to the right entities on time.

What is the main purpose of a payroll management system?
The main purpose of Payroll in QuickBooks software is simple: to manage everything you need to do to run payroll, from calculating the correct withholdings to keeping clean books and paying HMRC and employees on time. The system aims to make sure that this complex process is performed properly, quickly, and without stress.

On top of the basics, QuickBooks payroll software adds unique features to empower employees. Workers are allowed easy access to their information, can request time off through the system, and can upload their timesheets and expenses directly. For small business owners, we crunch all the numbers, from overtime, bonus payments, and PAYE to NI and pension contributions. That’s your payroll, sorted.

Who needs payroll software?
In short, anyone with employees or who pays themselves as an employee. Though it is possible to work out payroll manually, it can present serious costs in terms of time and energy, as a maze of deductions needs to be worked out for each individual employee.

If your workers make little enough that they don’t need to pay taxes, you can still use a payroll management system to ensure they’re getting paid the right amounts at the right time.

You can see the UK government’s up-to-date guidelines on registering employees for Pay As You Earn (PAYE).

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