Characteristics of Payroll System

Characteristics of the Payroll System include automatic calculation, security, and a lot more. A payroll system that is computer-driven offers to manage and automate the functions of payroll systems in a particular organization. Before the emergency of the computer systems, most organizations calculated the payroll manually.

The use of the computer in payroll calculation facilitates management to make and retain the information.

The main characteristics of payroll systems include heightened security with regard to the storage of sensitive company information. And also the automatic calculations in employee payments (Morochove, 2013, 1).

Characteristics of the Payroll System:

Automatic Calculation, accuracy, and characteristic of the payroll system:

The characteristic of the payroll system includes automatic calculation and accuracy. The payroll system that is computerized has a capability of computing wages automatically.

Due to 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. (Bragg, 2013, 199)

An organization’s payroll system ought to effectively accommodate all its workers.

In essence, good payroll systems are the once which ensure 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. 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. It could effectively and accurately keep and record the hours for outsourcing the payroll functions (Morochove, 2013, 2).


The characteristic of the payroll system includes the best security. A payroll system includes addresses, names, social security numbers, and other confidential information.

A computerized payroll system is effective in securing confidential information regarding organizational employees.

If such information gets into the wrong hands, it may result in problems for employees and organizations.

A computerized payroll system makes it easy for the management and administrators to control the access of such information.

Such a system would also offer an audit trail. In this trial, all user transactions and the dates for login are recorded.  Security is, therefore, another feature of a payroll system (Bragg, 2013, 218)


The characteristic of the payroll system includes high-quality reports.

Payroll systems are able to generate different types of reports.

Such reports may include information on tax, employee pay stubs, information. Further, such a system may offer other special reports. That can use by an administrator in cost accounting and generating reports on tax liability.

The systems facilitate the generation of reports using a variety of criteria as most of these systems contain various reporting capabilities (CIPP, 2012, 3).