What is payroll management system? | Pocket HRMS

What is payroll management system? | Pocket HRMS
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This blog will cover everything about payroll and payroll management system. It has all you need to know about the PMS and compliance.

Before we dive straight into payroll management and software, let’s start with the basics.

What is payroll?

In simple words, payroll is any process of providing salary to employees and wages to part-timers based on their worked hours and decided pay.

This is not so simple. Calculation of final pay to be paid requires several other calculations and data like leaves taken, remaining PLs, LOP, loan, compensations, appraisal, withholdings, etc.

Payroll involves the process to provide pay to your employees by the employer on agreed terms. There are 2 basic categories into pay:

  • Gross pay
  • Net pay

Net pay is the actual amount received by the employee after all deductions made into gross pay.

Net pat = Gross Salary – Deductions

Steps included in the payroll management process:

A payroll manager needs to be attentive during the payroll management process.

It requires proper planning and assistance to effectively perform without any error. There are always ongoing tasks, which need constant attention to everchanging amendments and withholdings. To learn easily, we have segregated the entire process into 4 major categories as below:

  1. Gathering employee information

Bank information

Self-service portal

Addressing working policies and overtime rules


Attendance management software

Administrator approval

  1. Withholdings and Taxes

Gross pay


Net pay calculation

  1. Payments

Salary slips

  1. Tax filing & Reporting

IRS reporting

Read also – How to calculate CTC in basic salary? What is CTC?

What is payroll management system?

Payroll software helps with payroll processing of the entire workforce in seconds. Yes, you heard it right. Payroll management software is capable of tracking and recordkeeping payroll and employee parameters like employee leaves, tax deductions, ESI calculation, etc.

From calculating the precise payroll amount to managing taxes, a payroll solution could help businesses function smoothly.

Also, the software generates payslips and important reports at a click. Employees can upload, access, and edit their personal details on the employee service i.e. ESS portal from their smartphones on the go. Also employees can apply leaves, salary details, and deductions when needed through their service portal.

4 Benefits of having a payroll management system-

  • East detailed reporting
  • Time savior
  • Online payroll software
  • Compliance management

Related – How payroll software can give your business the right edge?

Easy detailed reporting

A good payroll system will facilitate this process seamlessly. This can be extremely valuable when you are looking to retrieve information for any queries related to these matters.

The payroll software allows you to generate accurate payroll reports like monthly payslips or leave report of any employee.

Time savior

Since everything in a payroll management system is automated, you will be saving a lot of time. You don’t have to manually enter the information for every cycle. You set it up once and let the software handle the rest. The only thing you will probably do is new employee registration for every new hire.

Online payroll software

The online functionality of a cloud-based payroll system makes it an easy pick for any business. Instances like remote working bring challenges like remote workforce management and online payroll.

A payroll software, whereas allows the HR manager to digitally collect the hour details of employees and keep the right data for payroll. Online payroll software promotes flexible working and easy management.

Compliance management

This refers to the legal framework your business must adhere to. As an employer, you are required to maintain various payroll and payment records of your employees. Every organization that hires employees and pays salaries must comply with the labor laws. By having a payroll process in place, you are automatically complying with the employment and labor laws in India.


Information is the key. The HRMS solution with an inbuilt payroll management system could bring the much-needed wave at the firm.

No one knows your business better than you. Know the requirement and choose the right HR management solution for streamlined processes and cost-saving.

Pocket HRMS is one such HR software. It is loaded up with various business solutions and features directed towards effective HR management. To know more, contact us here or write to us at sales@sagesoftware.co.in


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