You know about payroll services. But what about Payroll-as-a-Service? This new software breed allows companies to establish future-proofed, integrated, and efficient payrolls.
“Payroll-as-a-Service is a new option created through modern cloud technologies,” says Heinrich Swanepoel, Head of Growth at PaySpace by Deel. “It changes how companies access and leverage payroll services, enhancing not just payroll and HR but many different business operations.”
The best Payroll Services use Payroll-as-a-Service
Payroll administration calculates money owed to employees, which varies from set salaries to hourly wages and overtime. Payroll also deals with tax filings, bonus payments, employee loans, time and attendance tracking, benefits, and meeting payroll regulations in different territories or countries.
Many first- and third-party payroll administrators smartly exploit the advantages of Payroll-as-a-Service software, says Swanepoel: “Payroll-as-a-Service payroll software is cloud-native. It’s a software platform that functions as an operating system for all things payroll, hosted on major cloud infrastructure that the payroll administrator and other stakeholders can access remotely via web portals or mobile and desktop apps.”
How it Challenges Traditional Software
Payroll-as-a-Service replaces traditional payroll software. Rather than own and run expensive software on local machines, payroll administrators use the advantages of a cloud platform that constantly improves and evolves, passing those improvements to users without extra cost.
Modern email services provide an equivalent example. While some businesses still use internal email systems and users download mail to their local machines, most now use services such as Microsoft 365 and Google Workspace/Gmail. These services store emails on large cloud servers and let users access them securely through internet-connected devices. We can call these Email-as-a-Service providers.
Payroll-as-a-Service does the same for payroll ecosystems. These are easy to access, scale up or down, and extend into different business environments, whether other departments or payroll service clients.
Payroll platform operators constantly push improvements that enhance payroll processes. For example, they can quickly implement new regulatory changes, enabling customers to use the new regulations in their calculations immediately. What used to take months to request and change now happens quickly and automatically.
The model also gets rid of lengthy and expensive software licences. Companies instead pay per administrator and can manage their software as an operational fee, not a capital expense.
What it means for your business
Cloud platforms are a powerful market force worth $317 billion. Its popularity has big implications for the payroll market, service providers, finance departments, and HR teams.
“You can do much more with cloud-native payroll software, and do it for less,” says Swanepoel. “There are the automatic updates that save time and help avoid penalties. There is the ease of integrating payroll platforms with other business systems, like using your ERP as the system of record while the payroll platform does the crucial payment calculations.”
While traditional payroll systems create silos that only a few can access, payroll platforms let diverse stakeholders get insight. Finance can create ad-hoc reports on spending. Legal teams can use insights to find payroll fraud. HR can integrate payroll with talent management. Employees can use self-service features.
Payroll-as-a-Service is very flexible. Companies can often rebrand their instances of payroll platforms to reflect their logos and colours, and users can customise elements such as form fields to match company processes.
“Payroll-as-a-Service makes sense for everyone,” says Swanepoel. “Internal teams and payroll service providers can leverage these platforms to deliver integration, automation, user enablement, and many new features. They can offer improvements like using WhatsApp channels to request payslips or arrange leave, using the platform as the face for their services. Our most mature clients are using our payroll platform to create continuous payroll to replace month-end crunches, and integrate with tax authority systems to enable real-time tax calculations. Payroll-as-a-Service is creating the future of all things payroll.”
