Blog: Time & Attendance – It’s Not a Payroll System

One of the more common expectations new time clock buyer s have is that the time and attendance system is also a payroll system.

While there are rare exceptions to the rule it is generally the case that Time & Attendance systems are not payroll systems and similarly Payroll systems are not time and attendance systems.

Expanding this further the payroll preparation process has three main elements.

The first is a time collection system. This can be manual or web based time sheets, a mechanical bundy clock or a more advanced electronic time clock. Some companies have no system in place at all which of course not so desirable,

The second stage is an award interpretation process which can be manual calculations referring to an award or alternatively it can be an electronic time clock. If you have a time sheet system you will be calculating payroll hours manually. If your pay rules are simple enough the very best time clocks will calculate payroll hours in various different time categories often including allowances which are based on hours worked. Most time clocks however require the addition of software to calculate payroll hours.

The third and last stage is the payroll system which converts units of time in various payroll categories onto actual dollar amounts. It also handles PAYG tax rates, superannuation contributions allowances, leave, weekly pay slips and group certificates.

Those rare software packages that perform all three functions rarely do it well and that is why there are specialised products to cater for these very different components of the payroll preparation process.

You are likely to find the best time and attendance or time clock solution for your business in a specialised product. If you would like more information on this subject you can subscribe to the Time & Attendance Consultant’s Guide at this link.

Jim Courtwood