Payroll software is technology that aims to streamline and automate the process of paying a company's employees. Payroll software can be purchased from a human resources technology vendor or included as a module within a larger enterprise resource planning (ERP) package.
Functions of payroll software include automatically calculating withholdings or deductions, processing direct deposits, voiding payments and generating tax forms and other reports. Some systems also feature check printing capabilities.
Experts say organizations that use payroll software reduce cycle times and manual errors. Some companies choose to outsource the payroll process to a third-party provider that runs payroll software on its own systems.