what is a payroll management system

In this article, we will discuss the important points about the payroll management system. It will help you get oriented and be familiar with this efficient tool. We will tackle the following:

  1. What is a payroll management system?
  2. What are the benefits of the payroll management software?
  3. What are the processes involved?
  4. The features of a good payroll management system.

What is a Payroll Management System?

When we talk about this tool, we must first answer the question: what is a payroll management system? Answering this question would give us an overview of the tool we are dealing with. This way, we can discuss its benefits, processes, and desirable features with a proper understanding of the topic at hand. 

So, what is a payroll management system? It is a tool used to automate payroll services in different industries. It is often part of a larger software that has more services.  

The software is used to improve school processes and transactions. Aside from the payroll management system, this software can also be used for student records such as class attendance and grades. Good school management software can also be used to collect fees.

When it comes to the payroll management aspect, the software offers features such as teacher attendance and salary computation. It offers easy management of personal data and the work performance of employees.

The payroll management system also aims to automate the payroll process to avoid errors such as miscalculations. The general services offered by a payroll management system must be but not limited to:

  • Attendance and work hours tracking
  • Keeping salary record
  • Bonus and deduction computations
  • Tax filing


The payroll management system would be in demand in the market if it weren’t for its benefits to an organization. After answering the question “what is a payroll management system”, let us discuss its benefits.

1. Helps Keep an Organized Record

Employing a lot of personnel usually equates to filing tons of records. These records contain important information such as personal staff details, work designation, and salary grade. It is important to keep these documents like the employee roster is one of the backbones of school management.

When it comes to payroll, organized documentation will help avoid confusion. This way, you can always stay on top of the payroll processing. The majority of payroll management systems offer these kinds of features.

Employee details such as salary and attendance records are easily accessible through a good payroll management system. Below is an example of an easily accessible employee record through the patrol system.

2. Saves Time and Money

As we already know what a payroll management system is, we were able to shed light on its basic features, such as automating processes. It aims to remove manual work on simple tasks.

Nowadays, different management processes are being automated to save time and improve correctness. Before, computing employee salary based on hours spent working was done manually. With the existence of tools such as the payroll management system, these kinds of tasks can now be done in an instant.

Automating these tasks also means less manpower. Institutions or organizations can save up on employing less staff. An extra hand or staff would be needed as machines can now do this kind of work. The way schools can save money on employee salary.

3. Accessibility and Secured Data

A payroll management system is usually stored in the cloud. Cloud-based software offers accessibility and more security. 

When it comes to accessibility, a payroll management system is more accessible because it can be accessed anywhere. The data is stored online, so employees can view the information that they need as long as they have the device and internet connection.

Aside from keeping data organized, institutions should also keep them safe. As mentioned, this kind of data serves as the backbone of an institution’s operations. So, its existence ensures a smooth flow of processes.

It is important to keep these sets of data secured and safe from breaches. Payroll management software also offers backups that can be stored in the cloud. This way, organizations can still access them even if it is compromised.

4. Can be Used for Planning

The data produced by this management system can be used for strategic planning. For example, as it includes attendance records, this information can be incorporated in allocating tasks for teachers in the future plans of the institution.

Payroll Management Process

Pre-Payroll Stage

This stage involves the setup of necessary policies and tools to operate a payroll system. Below are just some of the things to finalize to have a smooth payroll process.

Employee Data

The first thing to do is to put the employee information. This should include personal details, job description, salary, and other relevant information. 

This is important because it serves as your employee database. Without this, your payroll processing would be disorganized and may cause confusion to the whole organization. This data would also serve as the main record of all payroll transactions.

Setting Policies

Different organizations implement different employee policies. Those policies depend on the needs of the school or organization. So, defining the set of policies you want to implement is also important.

Payroll policies revolve around factors such as base salary, leave and benefits, attendance, and other things that you may deem necessary. The policies must be approved by the management before being carried out. The policies or guidelines would also set the standard processing of payroll management. 

Data Validation

The last pre-payroll step is data validation. The first two steps mainly involved data input. So, before finally launching the payroll system, validating or checking the data should be done.

Data validation helps avoid bigger complications. This step helps ensure that all information that will be used for the payroll system is one hundred percent true and accurate.

Main Payroll Stage

The payroll stage is the phase where all factors will be accounted for the total and final amount of salary. This step includes adjusting the salary based on benefits or deductions such as taxes.

A good payroll management system allows the management and the employees to see the overview of their salaries. Below is GoSchooler’s interface in payroll processing. It shows the base salary, benefits, and deductions.

Post-Payroll Stage

The payout is categorized under the post-payroll sage. This stage also includes statutory compliance for filling remittances to different government agencies.

The main payout transaction can be done by cash, check, or bank transfer. 

It is also important to keep a record of all payout transactions. Every organization should keep a record or a payout accounting to promote transparency. This would also serve as proof of payment to the employees.

Features of a Good Payroll Management System

As the questions “what is a payroll management system?” and two others have been answered, we can now look into the features of a good payroll management system.

Attendance and Performance Tracking

A good software or system must be able to help your organization track your employee’s attendance. As mentioned above, employee salary greatly depends on their attendance or hours spent working. So, an efficient system must offer this feature.

It should be able to provide reports on the overall performance of the staff. For example, GoSchooler provides a detailed breakdown of what your employees have been working on. This is necessary as good teaching skills translate to better student performance.


Accessibility is also one of the factors that you must consider. It is essential that all concerned personnel have access to their data and performance information. This way, they are given a chance to track their own performance. This promotes self-accountability and discipline. 

In addition, they can also contest inaccurate information and avoid further issues. The majority of payroll management systems today also support cloud storage which allows the management and staff to access the data.

Automated Computations and Tax Filing

The system or software must also provide automated calculations to be able to save time and other resources. It should also offer features such as automatic filing of fees to the necessary government agencies. 

Offers Support

Lastly, a good payroll management system is one that still offers help to the clients. Developers should be able to extend a helping hand to these institutions as these systems are relatively new.

Not all organizations are familiar with these kinds of advancements and may need further help. So, it is essential to choose a developer that offers customer support.


Is a payroll management system essential?

Yes. These days, a software that can help your organization create a faster and more efficient system is highly recommended.

How do I choose the best payroll management software?

The best software would depend on the needs of the client or institution. However, in general, the best software is the one that offers the widest scope of services.

Points to Remember 

There are many available tools that can make different organizational processes easier and more efficient. In educational institutions, a payroll management system is necessary to keep an organized payroll. 

These tools are beneficial, especially for school systems. It helps organizations keep a smooth flow of processes as it offers detailed steps in accomplishing the payroll. In choosing which software or system is fit for you, always remember that the best software is one that meets the demands of your organization. 

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