Payroll Software Integration: What It Is & How It Works

Payroll software integrations allow you to sync your payroll system with other software used to help run your business. It saves you from having to enter the same payroll information into separate programs and allows your employees to do some of the work for you.

Payroll software commonly integrates with HR, time and expense tracking, and bookkeeping software. These integrations, which usually take just a few minutes to set up, create seamless workflows and automate many of the processes it takes to pay employees on time. You can find integrations for a wide range of tasks, depending on which payroll software you use; some enable more integrations than others.

If you are still not sure which payroll provider is right for you, you can learn more in our how to choose a payroll software article. Be sure to consider services that offer a wide range of software integration capabilities to make the most of your payroll software integrations.

How Payroll Software Integrations Work

As a small business owner, finding strong business management tools can help you to complete tasks faster and more efficiently. Many third-party tools that help you manage your employees, expenses, accounting, and more are able to directly integrate with your payroll software.

The process of setting up payroll software integrations is usually pretty simple and just requires a few clicks to start. For example, our top payroll software for small business, Gusto, has an app directory on its dashboard that allows business owners to browse their different payroll software integrations and easily log in to third-party apps and tools to get those integrations set up in a matter of minutes.

Gusto’s “App Directory” breaks down each of its available integrations into categories. You can also search for an app if there’s a software you’re already using.

Once you click the software you’d like to integrate, Gusto gives you a brief breakdown of what the integration offers and any other information you may need. Once you’re ready to set up the integration, you can simply click “Connect” and will be redirected to the provider’s website to log in and finish setup.

There are many reasons why utilizing payroll software integrations can be a great tool for your small business. Some of those include:

Provides flexibility: With integrations (as opposed to an all-in-one system), you can select the software that suits your needs and budget. You may even find freeware or free plans that do what you want and work with your payroll software.
Saves time and money: With integrated software, your team is freed from making manual inputs or preparing spreadsheets for bulk upload. This can save valuable hours each pay run. A third-party app can often be more cost-effective than a more advanced payroll plan.
Prevents errors: With information moving seamlessly between programs, there’s no chance of a mistyped data entry. However, anything entered wrong travels to all the integrated programs, so you’ll want to correct it and check all the programs.

Most Common Software That Integrates With Payroll

Payroll software can integrate with a host of different software, from onboarding and learning management to compliance and tax preparation. Click the tabs below for information on some of the most common integration categories.

This software lets employees track work hours. Some offer mobile clock-in/out, location and geofencing (meaning you can restrict the physical location of where employees clock-in), and notes or categories for employee work hours that may be charged to clients.

Homebase is a popular time and attendance software that many payroll systems integrate with; you can also use it for free if you have one physical location and less than 20 employees. For more time and attendance options, check out our buyers guide on the best time and attendance software.

These apps let you build schedules, see who’s available, track shift swaps, and budget your labor resources. By integrating with payroll software, you can send time sheets, paid time off, and employee positions for easy payroll calculations. You won’t have to enter each individual employee’s work time either.

SocialSchedules is one of the best employee scheduling software with tools designed to reduce compliance risks for hospitality-based businesses with multiple departments and locations. For more employee scheduling options, check out our buyers guide on the best employee scheduling software.

By integrating your payroll system with accounting software, you can ensure you have the most current payroll information for reports and budgeting. All payroll data, like paycheck amounts, money paid for taxes, and funds withheld for insurance premiums, are transferred to the accounting software so they debit and credit the correct general ledger accounts each pay period.

QuickBooks Online is a great accounting software for small businesses, and although it has its own built-in payroll software you can sign up for, it also integrates with outside payroll software. Discover more of our top picks for the best small business accounting software.

If you reimburse your employees for expenses like mileage, per diem, supplies, or entertaining clients, then this software can feed their expense reports into the payroll system. Employees can enter their reimbursement requests and upload supporting documentation for you to approve so your payroll system adds it to their paychecks. Some accounting programs may have this feature.

Zoho Expense is an affordable expense reporting app you can integrate with payroll software. For other expense reporting software on our list, check out our buyers’ guide on the best business expense tracker apps.

Some payroll software systems already have limited HR functions, like onboarding. Others are part of a larger fully integrated solution. By integrating payroll and HR software, you can automate tasks from benefits calculations to changes in employee status that affect pay or deductions. It can help with compliance too.

Gusto is a highly rated and popular payroll service with HR functions in its higher plans. It works for contractors as well as wage-earning employees, can handle tips and PTO, and files taxes even on the local level. To learn about human resource software and how it can help you manage your team, check out the best human resource payroll software.

Retailers, restaurants, and service businesses use POS software to track sales and inventory, but many also integrate with payroll software for scheduling, time tracking, tips, and commissions. POS systems with a time and attendance feature make it easy to transfer hours to payroll software; with the click of a button (or a few), work hours are imported and paychecks are calculated.

Square POS is a free point-of-sale system that’s easy to set up and seamlessly integrates with other Square products. To learn about POS software that integrates with more payroll providers, check out the best POS software.

Tips for Seamless Integration

If you’re new to using software to help manage your business, putting payroll software integrations into use can be a little intimidating. Here are a few tips to help you along the way, making it a smooth and simple process:

Check with your provider first: Know what integrations your payroll provider already has built out and ready for you to use. If there’s something missing on that list, check with your contact to see if a future integration is possible.
Clean your data: This is a great time to fix spelling errors, data that violates business rules, bugs, missing data, etc. Also, check formatting between programs, especially for dates, time, names, and any other information that can be displayed in many ways.
Keep it user-friendly: If adding a software causes more work than manually putting in the information or using spreadsheets, reconsider.
Customize: Choose software with customizations that let your HR and payroll teams decide what options work for their office, department, or individual employees. For example, salaried workers may need different function integrations than contractors.
Test: Before going live, do test runs with your most common scenarios.

Bottom Line

If you are growing beyond the capabilities of your current system or have payroll software that doesn’t meet all your needs, you may not have to change it.

Payroll integrations cover everything from time tracking to HR support. With integrations, you can select the app that best suits your needs and budget. However, when integrating payroll software with other applications, be sure the data is clean, the connections work, and a test run succeeds before launching.

Although having payroll software makes paying your employees the right way much easier, you still need to know the basics. Check out our tips on how to get the best payroll training to help.

Payroll Software Integration: What It Is & How It Works

How Payroll Software Integrations Work

Most Common Software That Integrates With Payroll

Tips for Seamless Integration

Bottom Line

About the Author

Heather Landau