School systems often face budgetary challenges while managing a large labor force in educators, administrators, and support staff. While it may seem simpler to use manual payroll processes, there may be some compelling reasons to automate. Consider some of the following pros and cons of each type of payroll administration to determine what may be best for your school system.
What Is Manual Payroll?
Manual payroll refers to the process of calculating each employee’s paycheck using tools like paper, spreadsheets, calculators, and human labor. It requires a working knowledge of federal and state tax codes and forms to calculate each employee’s required deductions and submit them to the correct agency. Once the calculations are complete, you distribute paper checks or submit direct deposits.
Manual payroll relies on careful record-keeping and auditing to avoid errors. It requires payroll personnel to be available to work according to the payday schedule so everyone gets paid on time. Some organizations may have a payroll procedure document with built-in audits and checks.
What Is Automated Payroll?
Automated payroll uses software to calculate and distribute employee paychecks. The software keeps a record of the required personal information, wages, tax deductions, bank account, and vacation or paid time-off benefits. Using this data, the software can calculate and generate paychecks automatically on the scheduled days.
Human input and oversight are still required to ensure every employee is accounted for, but the software does all the calculations.
Challenges of Payroll in Education
From public schools to universities, payroll processes in education present some unique challenges:
- Non-traditional pay schedule. Educators often don’t work during some of the summer months. Some institutions offer pay options on a 9-month or a 12-month schedule. This type of schedule means managing different pay schedules for different staff members. Universities employ a variety of faculty types who each get paid according to different rules and at variable times in the year.
- Complex salary rules. Compensation for educators often depends on qualifications like degree levels, experience, seniority, and tenure, requiring careful administration. Support staff may be hourly or salary, and some groups may be under union management. Others might fall under a collective bargaining agreement. Many jobs in education are highly regulated and subject to salary cap law, which can change with new elected officials.
- Diverse staff types. Outside of the educators themselves, each school employs a staff of support personnel, like administrators, assistants, part-time teachers, janitorial, and kitchen staff. The size of the workforce grows exponentially with the size of the institution, introducing various payroll administration concerns.
- Reporting requirements. Institutions of learning are often subject to scrutiny and reporting beyond the usual tax requirements since they receive federal and state funding. Strict record-keeping is vital to stay in constant compliance.
- Budget concerns. Because education budgets fluctuate with economic and government forces, institutions may stay with outdated payroll processing systems to divert the money elsewhere. This can prevent leaders from exploring new and potentially helpful tools. Similarly, educational institutions may struggle to hire or retain enough staff to administer payroll efficiently.
- Employee trust. Errors, late paychecks, or insecure storage of employee personal information because of outdated systems can be detrimental to morale, decrease employee retention, and even lead to a union response, costing time and money.
Advantages of Automated Payroll in Education
Taking advantage of the tools offered by modern software may help with some of the many challenges faced by payroll administrators in education.
- Prevents miscalculations. Especially for large institutions, salaries may be determined by a complicated salary grid with levels and sub-levels. Software can store and calculate this data with ease. It can take into account all possible variables and keep careful records of the calculations.
- Ensures timely paychecks. Late paychecks are not only unprofessional, but in some cases may be met with action from unions or investigations. Automating payroll means that certain data can be entered once and not addressed again until there’s a change. For the salaried workforce, payroll administrative time is cut significantly. This allows staff to focus their time on more complicated or changing payroll tasks.
- Integration with HR. Many modern