HRGuru

I saw an article recently about whether payroll should report to HR or to Finance.  There was not a right or wrong answer but it did provide good food for thought.

During my career, I have reported to the Controller of Finance or the HR VP.  I like the HR VP because seems HR has more intuitiveness about payroll.  Payroll and HR are so intertwined, while Finace is just the money side.  I have done Payroll accounting as well so I understand the full cycle from HR/Finance and Payroll.

I think that confidentiality is a key argumwnt fo payroll to be under HR.  It isn't where I work now - but I would like for it to be.

I may have not read the definiton of payroll in this thread as intended so I apologize if am off tangent. Do correct me if am off. 

The term payroll used in the companies I have worked for in the past refer to the processing function itself, and it can be outsourced (outsourcing is indeed a hot topic ) therefore, it need not adminstered by either HR or Finance though both groups would still have roles to play in it e.g. vendor management, service delivery of that vendor and how it serves and meets the companys goals etc.

The term "Compensation and Benefits" used in companies I have worked for denote the job evaluation, salary surveys, industry and competitor analysis and review, pension/health/dental/insurance benefits review and recommendations, etc.  If the Payroll Manager is accountable for the review, analysis and recommendation of Comp and/or Benefits as listed earlier, then perhaps the job title should be changed to reflect the role. And in this case, I agree HR should be accountable for this role.

Salary is almost always the biggest cost to the company and Finance need to review or have access to this data as with other costs. Therefore, Finance still is involved in terms of access to the data even if payroll is not administered by them.  If the Finance group cannot be relied on for confidentiality, we have a bigger issue than discussing  if payroll should be under Finance or HR.

 a lot depends on the size of the company.  As a payroll and Hr professional I have worked at jobs where I have both hats. these companies are generally under 100 employees.  Other companies I have worked for wearing only the payroll hat and I have report to the Hr dept in one company and finance in the other.  I have also worked in HR only and reported to the Finance dept or VP of the company.  At times I have worked for one dept and have a dotted line to the other department.  Many companies want a segregation of duties so that the actual processing of the payroll, entering timesheet data, tax filing and GL entries and stuff like that are finance orientated, but salary and benefit information is HR orientated and controlled by HR.  The same software system is used for both to reduce data entry but it puts controls on what is entered. and processed.  This helps prevent abuse from your payroll person and makes your auditor happier.  Generally I find if the company is more people orientated, then payroll reports to HR, if it is more bottom line orientated, you report to finance. If you report to finance you generally spent a lot of time creating reports that are dollar orientated, if you report to HR you generally run lesser reports but the reports are people orientated.

Tapan is right in that payroll is not a basic HR function.  It is an accounting function and both departments have to work together in order to achieve effective results such as accurate pay, proper employee deductions and taxes, time off amounts and more importantly, the departments need to work together for budgeting, forecasting future staffing needs to help be aligned with company goals. 

I have both hats to wear at my current job.  The one thing I like about payroll being under HR is that employee private information remains under the HR hat and we have to work to keep the privacy in tact.  Not always easy to do when it is split as in larger companies.

My company is small.  Approximately 150 employees.  I generally don't deal with the grievances - my manager does.  I am responsible for the administrative aspects of both HR and payroll. 

We are also a very small company . We have 250 inhouse staff and another 750 out sourced people . Like security , cleaner , weilders and mechanics ,daily labors etc . We from HR side ,prepare the pay roll and forward to accounts .  Actual disbursement of cash or cheque is done by accounts. It gives two benifits . First leaving the HR from counting cash  and maintaining ledger . And secondly it creates a scope to cross check the calculations.

To reply to your checks and balance, primarily respective  head of the department s. but sequencially it is the accounts dept job . Say as per rule an worker is authorized with 52 hours  of OT.  (As per our export processing Zone  Compliances .) But a driver for that matter any body is found with 104 hours in a month . Acct dept will always raise question and HR has to satisfy them . If it  is not done the payment will not be done.  We have an inhouse auditor and everyyear we conduct audit by external auditor firm.

For trhose who are interested, I did create the Payroll Authority group awhile back.  I would love to see some great discussions regarding payroll evolve more here.  Join up and let's hear from you!