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A good Payroll Department is crucial to an organisation’s success

Payroll is one of the most critical aspects of business. Not only does it ensure that employees are paid timely and accurately, it also affects employee morale and reflects a business’ financial stability and reputation.

Payroll is typically managed by the HR and/or Accounting department. For some organisations, employee records are handled by the HR team while computation of salaries, taxes and benefits are handled by the Accounting team. In larger organisations, they may have the capacity to have a specific payroll department or team that focuses specifically on payroll processing.

Payroll teams are key contributors to the organisation’s company culture and financial stability. Here are some reasons why a good payroll team is crucial to an organisation’s success.


The key characteristic of payroll is that it allows employees to understand their net worth within the organisation. An employee’s total compensation is built into payroll, which includes their basic wages, allowances, bonuses and benefits. It is the role of the payroll department to ensure that employees’ salaries are accurately computed and disbursed on-time to their bank accounts.


One important aspect of payroll is the impact it has on the morale of employees. For one, timely and accurate salary disbursement indicates to employees that the organisation values them to ensure that they are well remunerated. Secondly, timely salary disbursement is an indication of the organisation’s financial stability. If payroll is late, employees may start to question the financial stability of the organisation. This may result in them feeling insecure and underperform as employees start to care less about their jobs. As such, the payroll department is responsible for ensuring compensation is paid in an accurate and timely manner to maintain high levels of employee morale.


In some instances, employee benefits are handled by the payroll department. Employee benefits such as leave applications, insurance premiums, statutory contributions and deductions and long-term incentives tend to be unique to certain groups of employees. The payroll team has to keep track of these employee benefits and ensure that these contributions and deductions are taken into account during employees’ salary computation.

Tax filing

Besides timely and accurate disbursement of compensation, the payroll department is also responsible for tax filing and deductions. Year-end tax filing is the most crucial aspect of the payroll process. Payroll professionals are responsible for verifying that employees’ annual compensation are computed accurately for tax filing. Concurrently, they will also need to ensure the right amount of taxes are being deducted as per local statutory laws. Incorrect and late tax filing may incur hefty fines for the organisation.

Record keeping

The payroll department is responsible for reconciling any discrepancies in payroll data. At the same time, they are also in-charge of keeping payroll records based on labour laws in the respective countries. This could include information such as payroll data, leave applications, timesheets, and expenses forms. For instance in Singapore, organisations will need to retain employees’ last two years records. For ex-employees, they will need to keep the employee’s last two years’ records for a year.

While the payroll department may be a team under the broader HR umbrella, they play a very crucial role in supporting employees and the entire organisation. They act as a bridge between HR and other functions such as Accounting, Finance and even banking institutions to facilitate on-time and accurate salary disbursement to employees. Their role helps to drive employees’ morale, increase productivity levels and benefit the organisation in the long run.

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