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How to Choose a Payroll Company

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How to choose a payroll company


In today’s growing economy, financial experts would agree that an accurate and legislatively compliant payroll system is essential for any size business. Payroll systems, if used correctly and to its full potential, can swiftly reduce or even eliminate time-consuming tasks that are involved with manually processing payroll information. Some business owners that do not make use of a payroll system, often prefer to hire third-party payroll processors to handle employee payments since it frees up their time and reduces the stress of handling a month-end payroll.

Deloitte compiled responses to a 2019 payroll benchmarking survey from 750 businesses in 55 countries. The poll found that outsourcing is still an important part of a global payroll strategy, and that 73% of participating organisations outsource at least some aspects of their payroll.

Payroll processing in South Africa is not a simple process. To remain compliant with the Department of Labour and the South African Revenue Service (SARS), businesses must fulfil a long list of requirements and submit number of various reports and/or documents. South African payroll software developer PayDay Software Systems provides a variety of powerful, yet straightforward; payroll solutions that help make these submissions effortless.


What you should look for when choosing a payroll service


Payroll system options


To efficiently process a payroll that complies with SARS’s regulatory standards, a business can go one of three ways: it can build its own payroll department and system in-house; it can outsource payroll processing to a third party; or it can use a hybrid model.


In-house payroll system


Payroll can be handled internally by staff that are properly trained to use a payroll system. Choosing the right software supplier is crucial. Software support should be available when needed and ideally, the service provider should also provide extensive training on the system. In addition to keeping the payroll personnel informed of legislative amendments and system updates, training should also address the various software features and modules.

Errors in submitting tax returns to SARS can be reduced by using software that can perform accurate calculations and produce statistical reports that are compliant with SARS requirements.


Full outsourcing of the payroll


When dealing with a large or complicated payroll, some businesses prefer to use a third party to handle everything.

PayDay Software Systems is one of South Africa’s leading online payroll and human resources software developers that offer a complete payroll solution that enables businesses to manage they own payroll efficiently and effectively without the need to outsource it to third party payroll management companies.


The hybrid models


A hybrid offering is deployed for access via the traditional desktop route in addition to accessing the system through a web browser.

Cloud computing has quickly become the new trend for businesses, more so since the outbreak of COVID-19, therefore the hybrid option has emerged as a viable option for businesses giving them the best of both worlds.


Consideration when choosing a service provider


The following are important factors to keep in mind when choosing a payroll service provider in South Africa, as this practice is becoming increasingly popular around the world.


Experience counts


It is essential that the service provider has extensive experience, expertise in industrial relations, and technical knowledge of all aspects of the payroll process. Speak to a salesperson or browse their website for more information on when they were established, what their core values are and what products and services they offer. More years of experience shows their ability to adjust and adapt to the ever-evolving nature of technology.


Industry and legislative knowledge are important


If a service provider wants to process payroll efficiently and accurately, they will need to learn the ins and outs of their client’s industry. In industries like hospitality and retail, for instance, knowing how to handle shift-based rules within a payroll is crucial. 

Keep an eye out for reviews of the payroll service written by satisfied clients to learn how other businesses have benefited from using it. They should provide industry-specific payroll solutions. For instance, businesses or organisations that work with salary scales and notches or require integration with their existing financial system.

Leading payroll companies in South Africa will have extensive knowledge of government legislation and a track record of successfully communicating, administering, facilitating, and implementing complicated regulatory changes.


Report generation


Service providers should advise their clients on what reports and/or documents their payroll system can generate especially if the client has specific requirements in that regard.

For example, PayDay’s payroll software, produces IRP5’s and various statistical reports for IOD, UIF, Skills and PAYE.


Consider cloud-based solutions


A payroll system should lessen, not increase, the administrative burden for a business. Paper leave requests, spreadsheets, and handwritten paychecks are all obsolete practices that modern businesses have stepped away from. Payroll services available on the cloud are now the most advantageous option for modern businesses. Depending on the internet connection, it is a simple and quick solution that can be used at your convenience no matter your location.

Another cloud-based system that works together with the payroll system is an employee self- service portal. Using an employee self-service system, employees can update their own basic personal information, submit leave requests, view their time sheets and more. For maximum convenience, the best ESS solution will come with a mobile app for both employers and workers to use.




For all your payroll and human resource software requirements contact PayDay Software Systems.

Their payroll software is user-friendly, accurate, legislatively compliant, and secure, Payday Visual – Employee Self-Service, PayDay Virtual – Online Payroll and HR. Both on-premises and cloud-based solutions are available, visit their website for more information: payday.co.za.

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