Did you know that payroll mistakes affect almost 54% of employees around the world? In Malaysia, companies risk losing money and facing fines because of wrong salary math and tax cuts. Research shows that businesses lose between 1-8% of their total payroll costs each year due to payroll errors—this shows why companies need an exact automatic payroll system or a payroll app.
In the past, Finance teams took care of payroll, but things are changing. Now, 38% of companies put HR in charge of payroll, while 36% still give this job to Finance. This change raises a key question: Who should be in charge of payroll, and how can an HRMS and payroll system make things easier for Malaysian businesses?
Payroll Management: HR vs. Finance
HR and Finance have split payroll duties over time, each bringing unique strengths:
HR’s Payroll Role:
- Keeps employee records safe and private
- Manages salary, benefits, and allowances
- Makes sure all deductions (EPF, SOCSO, EIS, PCB) follow the rules
- Helps employees with questions about their pay
Finance’s Payroll Role:
- Handles payroll as part of company finances
- Follows LHDN tax rules
- Updates accounting records and checks for mistakes
- Prepares payroll reports and handles audits
Yet, keeping payroll in just one team can cause communication gap and compliance risks.
The fix? An HRMS payroll system to link HR and Finance work for better accuracy and speed.
Payroll Reporting Structures in Organizations
Why Malaysian Businesses Need an HRMS Payroll App
One payroll method doesn’t suit every company. Things like staff size, industry rules, and growth plans affect how tricky payroll gets. just 67% of companies have a clear payroll plan—which can lead to inefficiencies and compliance risks.
Payroll Challenges for Malaysian Businesses
The Smart Fix!
Malaysian companies now lean towards a team-based payroll approach. Research shows that businesses where HR and Finance work together see:
✔️ 41% better earnings growth
✔️ 43% boost in workforce output
How an HRMS Payroll System Tackles Payroll Issues
Has an effect on salary calculations – Cuts down on manual mistakes and payroll holdups
Keeps compliance up to date in real time – Applies new tax rules (EPF, SOCSO, EIS, Zakat deductions)
Brings HR & Finance workflows together- Payroll app makes operations smooth
Offers employee self-service portals – Gives employees quick access to payslips and leave tracking
Boosts reporting & analytics – Provides Finance teams with instant payroll data to plan budgets better.
Cost Savings With Payroll Automation
Using an HRMS payroll app allows businesses to stop choosing between HR and Finance. This ensures productivity, correctness, and adherence to Malaysian labor laws.
Conclusion
Managing payroll isn’t just HR or Finance’s job anymore—it’s about bringing both together through tech. Companies that use an HRMS payroll system make fewer mistakes, follow rules better, and have smoother payroll processes.
Whether you run a small business, a big company, or work in an industry with tricky HRMS setups, payroll software makes sure your payroll is handled right. It offers precision, openness, and sticks to Malaysian tax laws.
FAQs
Q1. Should payroll be managed by HR or Finance?
The management of payroll depends on the size of the company and its industry. Many businesses in Malaysia now use HRMS software to have an influence on HR and Finance creating a smooth payroll experience.
Q2. What are the benefits of an integrated payroll system?
An HRMS payroll system has an impact on compliance, costs, and accuracy. It does this by automating calculations for payroll and bringing together HR and Finance workflows.
Q3. How does company size affect payroll management?
Bigger companies with multiple locations face more complex payroll issues. An HRMS payroll system makes payroll easier across many sites. It does this through automation and tracking compliance in real-time.
Q4. Are there industry-specific payroll considerations?
Yes. Some industries need special payroll compliance. Retail, construction, and manufacturing are examples. An HRMS payroll system helps follow industry-specific tax and salary rules.
Q5. How does technology make payroll management better?
Cloud-based HRMS payroll software cuts down on payroll mistakes. It gives updates right away. It also helps HR and Finance work together.