Most of us take our payslips for granted. We expect to get our salaries on the same day every month and carry on regardless until the next payday. Technology has made paying employees’ wages incredibly easy and reliable, but what is it and how does it work?

Payroll software takes the bank account details of each paid employee from part-timers to the CEO. It then accounts for their weekly, monthly or annual salary and transfers money from the company’s account to theirs, ensuring they get paid. Initially, the tech behind payroll was far more primitive, starting with good old-fashioned bookkeeping.

While punch cards were used in the early 20th century to record employees’ hours, computers were not used in accounting until the 1950’s. From that point on, recording data such as salaries and tax rates became a little bit easier, becoming more streamlined as computers became more sophisticated.


Automation and Payroll

The processing of payroll became automated, partly because specialist payroll software was created. Around the time of the mid-1990’s, software designed specifically for accounting was made and snapped up by businesses all over the world. The days of organising payroll, tax and so on by paper were numbered.

While some tasks are still done using paper, a combination of data spreadsheets and payroll software have furthered the use of automation to deliver workers’ salaries. However, some flaws did occur, such as late payment and miscalculation of tax rates. To iron out these flaws, payroll tech needed to be streamlined further.

Part of this meant making it easier to outsource payroll services or access it remotely. For the latter, online payroll management has been incorporated into HR software suites. Being part of the same set of software as time management and appointment calendar tools saves admin departments time, money and effort.


Data Analysis

Future payroll technology is likely to make greater use of data. It will analyse such figures as the hours worked by each member of staff and help to determine if they deliver value for money. This trend is following a wider one of analytics being used to gauge performance and is likely to play a big role in driving businesses’ future success.

Another development will see payroll become manageable with smartphones. For small businesses who have a small budget to work with, this will save plenty of effort by enabling small tasks to be done on the move. Apps and online, cloud-enabled HR software will make this become more prevalent.