Payroll and HRIS – Two Sides of the Same Coin?

HRIS and payroll functions have many similarities and differences. In a lot of small businesses, the same employee performs both HR and payroll management tasks. Therefore, both processes can be done side by side. In a small company, payroll software is enough to manage staff salaries. But an expanding enterprise needs HR software to handle the needs of a larger number of personnel.

Business managers need to comprehend the differences between the two functions to simplify and streamline the tasks. Both payroll and HR software solutions need to work in a coordinated manner to smoothen business operations and boost staff productivity. To learn the differences between HR and payroll software, first, let’s analyze the functions of each system.

Features and Benefits of an HRIS

A quality HRIS optimizes and simplifies HR management and enables you to effectively utilize your workers’ talents and skills, thus improving productivity. It allows you to quickly and efficiently resolve staff complaints and grievances to boost their satisfaction and morale.

Organizations like retail chains, hospitals, and restaurant chains have big workforces. In these places, staff members typically work on multiple shifts. An HRIS can help here as it can integrate modules such as workflow management and scheduling. It offers an employee management portal to assist managers. The software permits personnel to track their worked hours, view schedules, and request time off.

You can use the HRIS to reward and motivate your employees. The tool also aids in team building, planning company events, and more. Thus, the HR software creates a trouble-free environment where employees can contribute towards organizational goals and targets in an empowered manner.

Features and Benefit of Payroll Software

Complete payroll solutions help to calculate and pay out staff compensation and wages in an accurate and timely manner. The systems automate payroll processing, eliminating the errors associated with manual paper-based procedures. The payroll solution can process, balance, and reconcile payroll information with accounting tools. It can also help with tax calculations and filing, and in meeting payroll and tax compliance requirements.

Payroll software makes it simple to calculate overtime worked, reimbursements, holiday pay, bonuses, benefits, and deductions. You can use the platform to store records securely and accurately and verify data before and after payroll processing. The product can automatically print and send pay stubs or help to manage direct salary deposits as needed.

Common Points between HR and Payroll Functions

HR and payroll departments share many common points and coordinated tasks like hiring, salary and bonus payments, benefit deductions, and vacations and leaves. For example, if the HR unit devises a bonus scheme for staff, the payroll unit should be informed about it. Plus, the HR department needs to continuously update the payroll unit about workers’ performance so the latter can calculate and pay wages correctly.

If salaries are not paid on time or accurately, the HR department can get complaints from employees. Both HR and payroll units share sensitive business information like staff members’ personal and financial details, bank account and social security numbers, and others. Therefore, the two units need to coordinate properly to ensure the security of this confidential data.

Differences between HRIS and Payroll Software

Now, let’s look at the aspects where payroll and HR software differ:

Varied Skill Sets

Payroll is related to accounting, tax management, and finance processes, while an HRIS is used for staff management. The latter helps with activities such as performance tracking and worker attendance and increases the organization’s overall productivity.

Company Size is Important

Small businesses can use a payroll solution even for staff management. They typically have a small number of workers and can manage their payroll tasks easily with a basic system. Payroll software is typically simple to learn and utilize even by lay employees in a small firm. Large organizations need an advanced tool for their greater needs.


Both HR and payroll software tools are essential for businesses. They share similarities and differences, and both departments need to coordinate closely to ensure proper payroll and HR management. The systems offer a 360-degree overview of a company and deliver insights which can be used for informed decision making.