What HR Needs to Know About Payroll

June 24, 2015 Brian Kreissl

Brian Kreissl from Thomson Reuters recently shared this blog post about the importance of HR and Payroll working together. We thought it was definitely worth sharing so he has kindly agreed to allow us to re-publish this for you.

What HR Needs to Know About Payroll

It never ceases to amaze me how much overlap there is between different professions. For example, tax work is handled by both accountants and lawyers, labour relations work is done by HR practitioners and lawyers, and payroll professionals and HR both need to know about things like taxable benefits and employment standards legislation.

It seems like not only is there quite a bit of overlap in terms of the coverage of the recognized body of knowledge, but also some degree of competition among the various professions. Nevertheless, people in various functions and departments should be able to work closely with one another – particularly within the same organization. That applies particularly to closely related functions like HR and payroll.

Payroll a changing profession

The Canadian Payroll profession

While HR doesn’t always feel it gets the recognition it deserves, there can be a bit of a tendency for HR practitioners to label payroll as transactional and highly administrative in nature. However, having a greater knowledge of and an appreciation for the payroll function is highly beneficial for HR.

I believe I mentioned this before, but my mother was a payroll supervisor for years. She frequently had to work very long hours, and it always seemed like a very thankless and administrative role with lots of manual calculations and tight deadlines.

But with so many organizations automating and outsourcing their payroll processing to external vendors these days, the role has taken on more of a compliance flavour in recent years. There are a number of reasons for that, including the ever increasing legal and regulatory burden placed on employers and the fact that employers themselves are still responsible for the legal and regulatory compliance side of payroll – even if they have outsourced payroll processing to a third party.

But aside from legal and regulatory compliance – which is definitely getting more complex – payroll is definitely also becoming more involved with technology and strategic concerns. The fact is, employee compensation is the single largest expense in many organizations, and employees tend to get very upset if they aren’t paid accurately or on time. Because of that, employers are starting to realize the importance of the payroll function to the organization.

HR working closely with payroll

HR working with Payroll

HR generally needs to work very closely with payroll in several different areas including taxable benefits, employee set-up, base pay reviews, bonus payments, overpayments, vacations and statutory holidays, leaves of absence, year-end reporting, human resources information/payroll systems, pay equity and employee terminations. The payroll function frequently reports into the HR department – particularly in larger organizations – with the result that HR has strategic oversight of the payroll function. In smaller organizations, the HR and payroll person may even be one and the same.

Of course, in many organizations payroll reports into finance due to the obvious overlap with that function. Payroll is very much about dollars and cents, and payroll practitioners definitely need to understand accounting, taxation and other statutory deductions. But even if payroll is part of finance or is a standalone department, the relationship with HR remains strong, and there is a need for collaboration between the two areas.

Carswell’s payroll products

In spite of the fact I am an HR practitioner by profession, from a product development perspective payroll is also part of my portfolio. Carswell has several innovative payroll products, along with our in-house Payroll Hotline, which provides product support and assistance with payroll compliance and best practices over the phone.

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

This post was originally published on Canadian HR Reporter's HR Policies & practices Blog

Avanti is a proud supporter of Carswell, a Thomson Reuters company.

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About the Author

Brian Kreissl

Brian Kreissl is the product development manager for Carswell's Human Resources, OH&S, Payroll and records retention products and solutions. Brian is an experienced HR professional with backgrounds in law, business administration, people management, product development, marketing, professional writing and information technology.

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