According to PersonnelToday, 88% of businesses experienced payroll errors that led to employees not being paid correctly or on time. For this reason, switching to SaaS is a smart move. This article delves into SaaS payroll software, its benefits and how to choose the right one for your needs.Â
What is a SaaS Payroll Solution?
SaaS payroll solutions are cloud-based HR software services that automate wage calculations, tax filings and compliance management. They are accessible from anywhere with a simple subscription and streamline payroll-related tasks to eliminate human error and improve efficiency.Â
Popular examples of SaaS payroll systems include:
- Sage Payroll
- Xero PayrollÂ
- BrightPay Connect
- QuickBooks Payroll
- IRIS Payroll
- KashFlow Payroll
- Moorepay
- Papaya Global
SaaS Payroll vs Traditional Payroll Solutions
SaaS payroll solutions differ from traditional payroll systems in how they’re accessed, maintained and scaled. Traditional payroll software is typically installed on company servers and requires manual updates and IT support. SaaS payroll, on the other hand, is cloud-based, updated automatically and accessible from anywhere.
Managing payroll with a traditional system, you’d need to manually enter employee data, calculate taxes and process payments using installed software. If regulations change, you’d have to update the software yourself.
With a SaaS payroll solution, tax rates update automatically, payroll runs on schedule with minimal input, and employees can access payslips anytime.Â
Benefits of Using SaaS PayrollÂ
- Time efficient – Payroll management is automated, making tax calculations, deductions and benefits quickly available.
- Scalable – Additions and expansions are easy to implement, making payroll management suitable for any company size.
- Accessible – Available anytime from any location as long as you have a device that connects to the internet.
- Cost-effective – ‘Software as a service’ solutions require no upfront costs, just subscriptions, eliminating the need to buy a software license and purchase hardware and infrastructure necessary to power traditional software.
- Updates automatically – Updates to the software are installed in real time, at any time.
- Accurate and compliant – Computer calculations, automation and regulation make it less likely for errors to occur.
What are the Core Features of Payroll SaaS Solutions?
At the core of any SaaS payroll solution, there are some key features that define its functionality and adequacy. Outsourcing payroll to a SaaS solution should save time and increase data security if you invest in a well-functioning software.Â
Some of the features that define a good SaaS payroll solution are as follows:
- Payroll processing automation – Calculating wages, taxes and more.
- Compliance management – Providing tax compliance, information about local laws and international requirements.
- Self-service portals for employees – Generating pay stubs, tax documents and benefits information.
- Integration with other software – HRIS, accounting, employee time tracking, performance management, etc.
- Reporting and analytics features – Providing customisable reports, payroll insights, cost tracking, etc.
- Security features – Encrypting personal data, access controls and backup protocols.
- Employee benefits administration – Providing pension schemes, insurance and other perks.
- International – Providing multi-currency and multi-country support for global businesses. Of course, not all businesses will need this functionality.
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How to Choose SaaS Payroll Software
Once you’ve decided to hop onto the cloud payroll train, you will need to decide which payroll solution suits your business needs the best. Therefore, evaluate the factors below and determine which category you fall into to determine which payroll software works best for you.
Company Size
- Small businesses (1-50 people): You will need a simple, user and budget-friendly solution at a low price point, i.e., Xero Payroll or QuickBooks Payroll.
- Medium to large businesses (50-500+ employees): You will need a strong, scalable system with extensive features, i.e., Sage Payroll.
Technicality
- Less technical: You should prioritise intuitive software with a minimal learning curve, i.e., BrightPay Connect.
- More technical: If you’re comfortable with software and want extra control, pick a system with custom workflows and advanced features. Example: KashFlow Payroll – flexible and detailed but requires more setup.
Customisation
- Basic payroll needs: If you just need to pay employees and handle taxes, a simple, off-the-shelf solution works fine. Example: Xero Payroll – does the job without unnecessary complexity.
- Complex payroll requirements: If you need advanced reporting, multiple pay schedules or benefits administration, look for customisable tools. Example: IRIS Payroll – strong reporting and configurability for detailed payroll needs.
Cost
- Small businesses on a budget: Look for transparent, low-cost solutions without hidden fees. Example: QuickBooks Payroll – affordable, with a clear pricing structure.
- Growing businesses: A solution that scales in pricing and features as your business expands. Example: Sage Payroll – tiered pricing with advanced functionality for larger teams.
Compliance and Regulation
- UK-specific compliance: Ensure the software supports HMRC RTI submissions, auto-enrolment pensions and statutory pay. Example: BrightPay Connect – keeps everything compliant automatically.
- Global payroll compliance: If you operate internationally, you need a system that handles multi-country tax regulations. Example: Papaya Global – designed for international payroll with built-in compliance tools.
Security and Privacy
- Standard security needs: Look for GDPR compliance, encrypted payroll data, and regular backups. Example: IRIS Payroll – trusted for secure UK payroll processing.
- Enterprise-level security: If handling sensitive data at scale, choose a provider known for top-tier security measures. Example: ADP – a global leader in secure payroll services.
Customer Support
- Need hands-on support? Look for providers with UK-based customer service, fast response times, and phone support. Example: Moorepay – excellent support and onboarding help.
- Comfortable troubleshooting on your own? Choose a provider with a good help centre and online community. Example: Xero Payroll – plenty of online guides and community support.
Scalability
- For startups and small teams: You need a solution that works for now but can grow with you. Example: QuickBooks Payroll – simple for small businesses but integrates well as you expand.
- For fast-growing or enterprise-level companies: A system that scales across multiple locations and complex payroll structures. Example: ADP Workforce Now – built for high-growth businesses.
Reputation and Reviews
- Want a trusted name? Go for a well-established brand with a strong reputation in the UK. Example: Sage Payroll – widely used and well-reviewed.
- Prefer a modern, agile provider? Consider newer players with fresh, user-friendly approaches. Example: BrightPay Connect – highly rated for ease of use and strong customer feedback.
Trial Period and Demos
- Want to test before you commit? Look for a free trial or a no-obligation demo. Example: Xero Payroll offers a free trial to explore features.
- Prefer a guided setup? Some providers offer personalised demo sessions. Example: Sage Payroll lets you book a walkthrough with an expert.
System Integrations
- Need payroll to sync with accounting? Choose a provider with seamless integration into finance software. Example: Xero Payroll – built to work perfectly with Xero Accounting.
- Want HR and payroll in one place? Look for software that connects payroll with HR and benefits management. Example: ADP integrates payroll with HR systems for a streamlined workflow.
Training and Resources
- Need structured training? Look for providers that offer webinars, tutorials, and guided onboarding. Example: Sage Payroll provides detailed training videos and support.
- Prefer to learn as you go? A provider with an easy-to-navigate help centre might be enough. Example: Xero Payroll offers self-paced learning and articles.
Common Questions About SaaS Payroll Solutions
Q: How do I migrate my payroll data from an existing system to a SaaS payroll solution?
A:Â
- Export your data from your current system in CSV or XLSX format.Â
- Clean the data to ensure accuracy.Â
- Upload or import the data onto your new SaaS payroll system.Â
- Run tests to verify accuracy and eliminate mistakes.Â
- Run the payroll cycles on both software initially for assurance.Â
Q: What are the technical requirements for using a SaaS payroll solution?
A: To access a SaaS payroll solution, you will need an internet connection, a web browser and a device (computer, tablet or smartphone). You may also need login credentials from your company’s payroll team or payroll provider.Â
Q: Who owns the payroll data in a SaaS payroll system?
A: You (the business) own your payroll data in the SaaS payroll software. The cloud payroll provider only hosts the data but does not claim ownership of the information and grants you full control of it.
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