Characteristics of Payroll System

A payroll system that is computer driven offers to manage and automate the functions of payrolls systems in a particular organization. Before emergency of the computer systems, most organizations calculated the payroll manually. The use of the computer in payroll calculation has de it easier for the management to make and retain the information relating to payroll. Among the main characteristics of payroll systems, include the heightened security with regard to storage of sensitive company information and automatic calculations in employee payments (Morochove, 2013, 1).

Automatic Calculation and accuracy

The payroll system that is computerized has a capability of   computing wages automatically    of which an employee has worked when data is coded into the computer. Further, the computer is able to automatically compute the employee’s time, absences, sick days, vacations personal hours and tardiness. Moreover, these systems are able to change in premiums and the amount of overtime worked. Commissions and bonuses can also be automatically set and disbursed to employee’s paychecks on a schedule, which the administrator has set (Bragg, 2013, 199)

An organization’s payroll system ought to effectively accommodate all its workers and the hours worked by each in an accurate manner.  In essence, a good pay roll systems is the once which ensures that the hours worked by each employee in the firm are accurately kept.  Although human is to err, an automated system minimizes the potential of such error as the only factor employed is the reporting and departure of these employees.  In the case when the time clock malfunctions or when certain employees forget to go out for lunch, the correction can easily be made by the administrator or the accountant using the payroll system. Therefore, the payroll system is the third party which could effectively and accurately keep and record the hours for outsourcing the payroll functions (Morochove, 2013, 2).


A payroll system includes addresses, names, social security numbers and other confidential information. A computerized payroll system can be effective in securing the confidential information regarding organizational employees.  If such information gets into wrong hands, it may result into problems not only to employees but also for an organization. A computerized payroll system makes it easy for the management and administrators to control the access of such information and setting of different users.  Such a system would also offer an audit trail where all user transactions and the dates for log in are recorded.  Security is therefore, another feature of a payroll system (Bragg, 2013, 218)


Payroll systems are able to generate different types of reports. Such reports may include information on tax, employee pay stubs, information regarding hiring and termination, check printing and register.  Further, such a system may offer other special reports, which could be used by an administrator in cost accounting and generating reports on tax liability. The systems facilitate generation of reports using a variety of criteria as most of these systems contain various reporting capabilities (CIPP, 2012, 3).