Should payroll and HR live in the same software?

Summary

Combining them pays off when the same employee data is being typed into two systems every pay period, usually hires, time, and leave. If your HR records are already under control and payroll is simple, a payroll-only plan costs less and has fewer moving parts. The pricing is the other thing to watch, because HR features often come with a different pricing unit, not just a higher price.

What a shared employee record actually saves

Start date, job title, pay rate, work location, and leave balance are used by both HR and payroll. With two systems, a raise or an address change has to be entered twice, and the one that gets missed is the one that shows up as a wrong paycheck. Counting how often that re-entry happens is a better test than counting features. Hours copied from a time system every pay period is a clear case for combining. A handful of changes a year is not.

Price jumps that come with HR features

Justworks shows how far apart the options can be. Its Payroll plan is a $50 base fee plus $8 per employee a month and comes with HR tools and support. PEO Basic has no base fee but costs $79 per employee, and PEO Plus, which adds medical, dental, and vision administration, costs $124. For ten employees:

The PEO plans include HR consulting, 24/7 support, and a 401(k), so they are a different product, not an expensive version of payroll.

Gusto draws the line at time tracking. Its single-state Simple plan ($49 plus $6 per person) can take a Time & Attendance add-on at $6 per person, which comes to $169 a month for ten people. Plus, at $80 plus $12 per person, includes time tracking along with multi-state payroll and next-day pay, and comes to $200. The $31 difference buys the extras on Plus, and they only pay for themselves if you use them.

Adding payroll to the system you already use

Homebase prices its plans per location and sells payroll as an add-on to any of them, at $49 a month plus $6 per employee paid. A restaurant or shop already on one of those plans can add payroll without replacing anything. The same logic applies to a company that already has an HRIS it likes. A separate payroll product fed from that HRIS is a common setup, and one that avoids migrating employee records at all.

Sources

• https://www.justworks.com/pricing
• https://gusto.com/pricing
• https://www.joinhomebase.com/pricing

Related on this site

• What does payroll software do, and where does a payroll service take over?
• What should you compare before picking a payroll provider?
• What can employees do on their own in a payroll self-service portal?
• Payroll software cost calculator