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BUSINESS ADVICE •  20 JANUARY 2022 • 3 MIN READ

How to choose the right payroll software for your business

Calendar showing payday

Do you dread the idea of manually recording your employee’s hours and days worked again? Do you struggle to keep track of their annual leave days? If this sounds familiar, there’s good news: there’s software for that!

This blog discusses 9 things to help you choose the right payroll software. Whether you operate with a small team or have multiple locations and employees, there are plenty of ways to streamline your payroll processes.

9 things to help choose the right payroll software in New Zealand

Before you start researching, establish a clear idea of your business needs. These include the number of employees you need to pay, how many administrators will be using the payroll software, your budget, ease of use, and ongoing support. 

1. How many employees do you have?

How many employees do you need to do the payroll for? Are they full-time employees, seasonal, or temporary employees? Are they in the same country, or are they based in different countries?

Payroll software is often priced based on the number of employees, so this one is key.

2. How many users will use the payroll software?

Consider the number of users who need to use the software. If you have a small team, you may need fewer features. Larger teams could warrant a platform that offers advanced features such as automatic data capture and data import.

3. How do you conduct payroll?

There are many questions to ask yourself when conducting payroll. What is the payroll cycle? How often do you pay your full-time, part-time employees, and contractors? Do you have employees whose payroll cycles are different from others? Are your employees getting paid salaries or by the hour? Do your employees get a set number of holidays every year, or is it based on the percentage of hours they worked? These need to be taken into consideration when choosing payroll software that suits your needs.

4. What’s your budget for the payroll software?

How much have you budgeted? Is the pricing structure clear and transparent on the website? The most common pricing structure is per employee per month. This means you need to calculate the monthly total cost and compare this number with your budgeted costs to get your total. Remember to account for more seats if your company is in a growth phase.

5. Does it comply with legislative requirements?

Apart from employment law, are there any legislative requirements to consider when processing your payroll? Does your company have enterprise agreements or award rates? Does the software get updated as the new regulations pass? For example, if a public holiday has been added or the tax rates have changed, the payroll provider will ideally update them as they go into effect.

6. Does it integrate with your current accounting software?

Do you want your software linked to your accounting system? Do you need to import information from spreadsheets (such as timesheets) or other platforms? Integrating with your current accounting system and other software helps you streamline and manage information, ultimately reducing time, resources, and costs for business owners. 

7. Does it have the level of reporting you need?

You will be able to view your payroll data clearly using the reporting and analysis features. Using the right level of reporting, you'll be able to see and track important metrics such as employee salaries, holidays, taxes (e.g., Kiwisaver, ACC) and tax deductions.

8. Is it secure?

Your payroll data contains personal information of your employees (e.g., their banking details), as well as information about your business and access to your bank accounts. Choosing a provider that offers top-tier security is essential in order to protect data from potential breaches.

9. Do you need mobile access?

Opt-in for a cloud-based solution (e.g., Xero Payroll) if you need access from multiple locations. This offers several benefits, including:

  • You can access it from anywhere and get real-time data. No matter where you are, you can check to see if your employees’ paychecks are being processed
  • Its ease of use makes it a great choice for first-time administrators, saving you time and money in the long run

Payday filing

The IRD requires all employers to send payroll related information to them every time a pay run is made. This could be weekly, fortnightly or monthly. This includes payments for gross wage, tax and Kiwisaver for all employees each time a payroll run is processed. IRD requires all employers to fill payday filing online, meaning extra administrative work for employers. Fortunately, most payroll softwares in the market can file payday filing returns for you directly from their system to IRD. Once the payroll is completed, you can simply file the payday filing return.

Best payroll software in New Zealand

We’ve rounded up some of the best payroll software solutions in New Zealand: 

  • Xero payroll: Automate tax, pay and Kiwisaver
  • Myob Payroll: Cloud payroll software, automatic payday filing to the IR
  • Employment Hero: All-in-one software for HR, people, payroll, and productivity
  • Pay Hero: stress-free payroll and timesheets for employers
  • Smartly: payroll software for business with all sizes
  • Pay Sauce: user-friendly cloud payroll
  • iPayroll: the payroll solution for successful businesses
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Tori Ma

Performance marketer

Performance marketer at Beany, and into true crime documentaries.

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