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Advantage of computerized payroll system
1. Advantage of Computerized Payroll
System
Time Importation
Many employers use a timekeeping system, such as time clock, to track employees' work
hours. A manual system requires tracking employee time by hand; a computerized payroll
system often has the ability to automatically transport employee punches/swipes from the
timekeeping system into the payroll system automatically. Such a system can separate
regular hours from overtime hours worked. All the payroll person has to do is make
edits/adjustments, if necessary.
Automatic Calculations
If employee time is imported into the computerized payroll system, the latter rounds the
employee time up and down appropriately, such as to the nearest quarter hour. It calculates
the total hours worked and to be paid. This saves on time spent manually calculating the
hours and reduces errors. If the payroll person enters the hours into the system herself, it
calculates the wages automatically, based on her input. The system calculates all pay
frequencies, such as weekly, biweekly, and semimonthly.
A computerized payroll system automatically calculates employee statutory deductions,
such as taxes and wage garnishments, and voluntary deductions, such as parking fees, 401k
contributions and medical benefits. The payroll person simply enters the data upon which
the deductions are based, such as Form W-4 information for federal income tax
withholding.
Paycheck Processing
A manual payroll system requires you to print paychecks on a typewriter or by hand. A
computerized payroll system has direct-deposit capability, which saves money spent on live
checks and reconciliation. Additionally, paycheck and pay stub generation occurs quickly,
regardless of volume.
Report Generation
A computerized payroll system generates and prints payroll reports. If you want to double-
check the payroll before printing paychecks/pay stubs, simply reference the corresponding
reports. Furthermore, the U.S. Department of Labor requires employers to retain payroll
records for at least three years. A computerized system enables hard-copy printing of payroll
registers pertaining to each pay period. It also saves the information in the system
indefinitely.
The system generates tax reports to ensure payroll tax compliance. This includes quarterly
and annual wage reporting and generating employee W-2 forms. If a related department
such as accounting handles the company's payroll tax and reconciliation duties, print the
2. necessary reports the department needs via the computerized system. Furthermore, the
system tracks benefit days, such as vacation and personal time, taken and paid.