Running a business can be hard. You have to manage your finances, employees, timesheets, paperwork, inventory, and accounting. With so much to keep track of, things can fall through the cracks. Where did you put last pay period’s timesheets? Are your employees’ new hire information sheets stored safely? Did you add the latest payroll taxes to your general ledger? It’s a lot to handle. But, it can be easier with payroll integration. So, what is payroll integration?
Quick answer: Payroll integration securely syncs payroll data (hours, wages, taxes, benefits) with your time tracking, HR, accounting, and insurance systems so you don’t re-enter the same info in multiple places. The result is fewer errors, faster processing, cleaner books, and easier compliance.
Payroll integration: The basics
Plainly speaking, payroll integration is when your payroll system syncs with other software or programs. Integrated payroll lets you keep track of the information you need to successfully manage your employees and run your business.
How it works in four steps:
- Connect: Authorize your payroll to connect with time, HR, accounting, and insurance providers.
- Map: Choose how hours, pay types, and taxes map to employees and general ledger accounts.
- Run: Approve time, run payroll, and let integrations push updates automatically.
- Reconcile: Review synced entries and reports in accounting and HR.
Here are some of the basic options you can integrate with your payroll.
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1. Time and attendance
If you have employees, you need to track their time. Still using traditional paper timesheets? You may be missing an opportunity to optimize adding hours to your payroll. But if you have time and attendance software, integration can save you time. How? By simply moving hours from one software to the other without having to key in each individual employee’s hours.
The advantage of time and attendance software is that your employees can typically clock in and out from a website or app. At the end of the work period, you can approve timecards and send them directly to payroll if you integrate the software. The hours populate in the appropriate box so you can quickly scan the hours, approve, and print paychecks or stubs.
Rather than checking and double-checking the hours against employees, you can feel confident that the hours populate into the correct employee’s payroll entry. And, you’ll save money by no longer having to print timesheets for employees to manually submit.
What to look for:
- Mobile clocking with geotagging
- Overtime, shift differentials, and PTO accruals
- Audit trails and manager approvals
Best for: Any business that wants to eliminate manual time entry and reduce hour-entry errors.
2. Human resource software
Remember all those documents you had your employees sign when they first start working for your company? The IRS has specific laws for how long you should keep them. For example, you must keep Form I-9 for a minimum of three years after the employee’s hire date or one year after the employee leaves, whichever is later. The more employees you have, the quicker your filing cabinet drawers fill up.
Enter human resource (HR) software. With HR software, you can store that information digitally. But, why should you integrate HR software with your payroll system? Well, HR software typically allows you to store employee documentation in the employee profile. That includes all new hire paperwork, employee handbooks, and offer letters (if applicable).
Another benefit of integrating HR software with your payroll system is you can keep track of employee changes. Those changes can include new Forms W-4, changes to any employee benefits, and raises.
HR software may also let you keep track of employee anniversaries. An employee’s anniversary can be important if you schedule performance reviews for specific timeframes around anniversaries (e.g., six-month intervals from their hire date).
What to look for:
- Centralized document storage
- Manager permissions
- Employee organization chart
Best for: Teams that want cleaner employee records and fewer admin handoffs
3. Accounting software (with payroll integration)
When you have employees, everything about payroll is key to maintaining accurate books. From taxes to benefits, you have to record it all.
Integrating your online accounting software and payroll automatically transfers payroll data to your books.
With most accounting systems, you can designate where to record payroll taxes, net wages, and any benefits. The integration removes the potential of incorrectly entering values and throwing off your general ledger or account balances. Every value transfers to where you designate.
Do you have full-service payroll software that deposits and files your taxes for you? You can set up the accounting software to show that the payroll taxes are a tax expense. Do you deposit and file taxes yourself? Choose to have payroll taxes appear on your general ledger as a payroll tax liability.
4. Workers’ compensation
Depending on your state, you may need to purchase workers’ compensation insurance from a private carrier or through a state program. If you’re in a state that does not have a state-run workers’ compensation program paid for through taxes (e.g., Washington), you might be required to purchase workers’ compensation coverage.
Your payroll system may integrate with your workers’ compensation software (e.g., AP Intego Pay-As-You-Go).
When you run payroll, the software can automatically send payroll data to your insurance provider. Your provider calculates your premiums based on the payroll information the software sends.
Why it matters: Pay-as-you-go workers’ comp ties premiums to actual payroll, which can reduce large year-end audit adjustments and improve cash flow.
Benefits of an integrated payroll system
So, now that you know the types of software and programs that integrate with your payroll system, you might be asking about the benefits of an integrated payroll system. Payroll integration streamlines the entire payroll process. You can easily track employee hours and information, process payments through your general ledger, and push your payroll information to your workers’ compensation provider with a few clicks of a button.
A streamlined payroll process means that you can save time and money so you can get back to business. And, you can easily keep your information in one place to minimize the number of sites you use and passwords you have to memorize.
What you can expect:
- Time saved: Eliminate manual re-entry of hours and payroll journals.
- Fewer errors: Reduce mismatched hours, duplicate employees, and general ledger posting mistakes.
- Real-time visibility: See labor costs and tax liabilities reflected in your books immediately.
- Easier compliance: Keep tax forms, I-9s, and W-4 changes consistent across systems.
- Better decisions: Dimensions (department, job, location) reveal true labor profitability.
Remember these points to ensure you’re making the most of your payroll integration:
- Learn the ins and outs of the software you choose
- Check with your payroll software to see what integrations they offer. Your payroll software company may have time and attendance, HR, and accounting software all under one login. Or, your software may integrate with other programs or software from outside companies
- Consider the usability of the integrations before committing by taking advantage of any free trials. If it’s easy to learn, it should be easy to teach your employees how to use it
How to choose and implement payroll integrations
Use this checklist to find the right fit and roll it out smoothly.
- Requirements
- Headcount today and in 12-24 months
- States where you hire (multi-state payroll tax support)
- Benefits to track (401(k) plans, HSAs, garnishments)
- Reporting needs (job costing, department)
- Vendor fit
- Native integrations for your accounting system
- Data fields supported
- Security and compliance (SOC 2, encryption, etc.)
Payroll system partnerships
Your payroll software may have partnerships with other businesses that can bring you savings, such as discounted check stock, tax forms, or labor law posters.
Your payroll software company might even partner with lenders for business loans. Look into any partnerships your payroll software offers to determine if there are any savings you can take advantage of.
Other common partnerships to ask about:
- Workers’ Comp pay-as-you-go programs
- Time tracking
- Benefits administration and retirement plans
- Banking connections
Patriot’s payroll software integration highlights
Patriot’s payroll integrates with:
- Time and attendance add-on
- HR add-on for central employee records
- Patriot’s accounting software to sync payroll journals directly to your general ledger
FAQs about payroll integration
Payroll integration is the secure syncing of payroll data (hours, wages, taxes, benefits, employees) with time tracking, HR, accounting, and insurance systems, so information flows automatically without duplicate entry.
To save time, reduce errors, keep books up to date, and simplify compliance by keeping employee and payroll data consistent across systems.
After you run payroll, the system posts a journal entry to your general ledger (wages, employer taxes, benefits, liabilities).
Looking for a way to seamlessly integrate your payroll software? Patriot’s payroll software integrates with our time and attendance add-on, HR add-on, and accounting software. You can approve timesheets and payroll, track employee information, and send information right to your general ledger. Start your free trial today.
This article has been updated from its original publication date of May 12, 2021.
This is not intended as legal advice; for more information, please click here.
