Manual payroll processing can be complex and time-consuming, even if the business is small. This is because the payroll representative has to process the entire payroll by hand. This includes calculating hourly and salary pay and figuring deductions, such as wage garnishments and payroll taxes.

While the manual system is recommended only if the business is small, such as fewer than 10 workers, it has an increased likelihood of errors. It also typically takes more time to calculate the payroll by hand than by computerized processing.

Payroll software eliminates manual payroll processing. The risk of errors is reduced and less time is spent on processing. The payroll representative simply records the wage and deduction entries into the software and the latter does the calculations.

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