Is Payroll HR?

Many small business owners classify payroll into one of two categories - Human Resources or Finance. Payroll is a unique business function that is doesn’t fall neatly into one category. Focusing just on payroll leaves out all of the HR and finance implications that of paying your employees.

Your HR and finance partners will work together in their areas of expertise to ensure that your process is legally compliant all around. There are HR laws that apply to employees based on how much they get paid and other laws that regulate what records you need to keep on the financial side.

What is human resources role in payroll?

Let’s start with HR. Your HR team is going to be integral in managing your staffing, scheduling, and attendance. This is using the dollars you have available to get the maximum results from the team you pay. This is important for ensuring that people are getting paid for their work correctly. An HR professional will also help you drive your company’s profit by ensuring your benefits, bonuses, and incremental pay are directly tied to organizational results. HR is also the first place employees go when they have questions about their pay. Finally, HR will ensure that you keep the correct employee records, worker’s comp insurance, and unemployment benefits.

What is finance’s role in payroll?

Finance will work on the dollars and cents side of payroll. Your finance expert will double-check that you’re getting the right deductions and credits for your employee’s payroll taxes, they will create and review budgets, payouts, and checks. Finally, they will ensure that all of your Sarbanes-Oxley records are maintained (hello, you don’t want Enron on your hands), and your taxes filings and payments are made on time.

Who should do my payroll?

Either of these professionals can (or you) can do the weekly, bi-weekly, or monthly payroll run. However, without both of these professionals working their magic, your payroll will become disorganized, full of mistakes, and create a poor experience for your employees.

So how should you execute your payroll functions?

• If you only run payroll for you and your immediate family members, you can run your regular payroll through a payroll processor like Gusto.

• If you have 10-50 employees, you should have a monthly review by an HR professional and a finance professional to ensure everything is on track. If you’re between 50-100 employees, one of these professionals should also run your payroll for you.

• If you have 100+ employees, it’s time to hire a payroll employee. This is someone that will check your timecards, schedules, and commission payments 5 days per week and will maintain contact with your HR and finance professionals.