Payroll Software Trends: Future of Payroll Software In The Next Year


A recent study by Kronos and the American Payroll Association has found 29 percent of businesses use a payroll system that is 10 years old or older. This statistic not only includes outdated software platforms, but also includes methods such as spreadsheets and other forms of manual payroll processing. Clearly, there are many companies that need a payroll overhaul. If your organization is one of them, adopting a new payroll system should be added to your list of New Year’s resolutions. Our research and interviews with industry experts illustrate the top payroll software trends for the upcoming year to bring your business into the future.

Key Takeaways


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All-in-One Solutions

Software buyers are trending toward interest in an all-inclusive, self-service system for payroll processing. Businesses want to be able to complete payroll functions on their own, without the assistance of a payroll service, or even vendor support. This indicates a move toward more user-friendly payroll systems, complete with additional core HR features.

Gary Anderson, Director of Sales at Criterion, predicts gravitation towards comprehensive human resource management. He explained, “Buyers want to be able to stay with the payroll software they have because they know how that system works, so they want an HR platform that can pass data to their payroll system. HR departments want the integration capability. The other trend is wanting everything all in one system. Businesses want to buy a full human capital management solution that has everything in it, including payroll.”

Essentially, standalone payroll systems are a thing of the past. Payroll software buyers need tools that can manage all HR processes, be useful throughout the employee lifecycle and avoid duplicate data entry. The key, says Anderson, is open APIs. With this capability, users can choose an all-in-one system, or integrate an existing payroll system into a full-suite HCM whenever increased functionality is needed.

The attraction to open, integrated payroll systems demonstrates an avoidance of payroll services. Anderson puts it simply, “All the tax filing and payment processing… [businesses] don’t want to pay somebody else to do it.” And as software becomes more user-friendly, along with employee self-service options like viewing check stubs or changing personal information in the system, the need for payroll services is beginning to disappear.

Accessible payroll solutions will also continue to include mobile capabilities, allowing for increased access and on-the-go payroll processing.

Flexible Payment Options

As payroll processing becomes increasingly digitized and non-traditional work models are popularized, diverse compensation administration options are necessary features. In addition to the standard paper checks vs. direct deposit debate, other choices for how employees are paid are emerging. In some systems, this includes the ability for employees to fully manage their own payment. There are vendors (and third-party apps) that allow employees to choose when they get paid without disrupting their employer’s processes.

Accommodation for cryptocurrency payments will become a more widespread feature as the method is popularized. According to an August 2017 Statista report, over 39 percent of surveyed American adults reported they would be “open to the idea of using Bitcoin for transactions and purchases.” As attitudes towards cryptocurrency become more positive, the need for compensation via Bitcoin will increase.

Source: Statista

Many employers are still unfamiliar with cryptocurrency and are unaware of the risks and regulations involved. Taxes, differing international laws and varied definitions of “legal tender” are just some of the factors to consider when issuing payments in digital monies. For example, “Bitcoin and other digital currencies do not meet the definitions of legal tender or currency across Belgium, Finland, the Netherlands, Norway, and Sweden but are not prohibited for use in these countries,” reports Bloomberg. The use of payroll software can assist in this. Automated compliance will help employers manage these factors and be early adopters of Bitcoin payment.

Artificial Intelligence

“Artificial Intelligence built into payroll systems anticipates what employees want from payroll,” stated Susan Warren of Optimum HRIS. Similar to many other modern software categories, machine learning features are becoming essential.

As you may know, artificial intelligence-enabled software allows for increased automation, upping efficiency and freeing payroll professionals to focus on important tasks which require more human attention. These benefits of machine learning are outlined by Forbes in “11 Ways AI Can Revolutionize Human Resources”. Forbes’ HR experts detail some of the general human resource functions that are facilitated through the use of AI, but one point stands out as a major plus of this functionality specifically for payroll software: staying compliant. In the article, Charece Newell specifically focuses on compliance in hiring procedures, but AI can help manage payroll compliance, too. An artificial intelligence tool within payroll software can automatically update constantly changing regulations, monitor and correct any violations.


Adhering to financial laws and regulations is an essential function of payroll systems. As these tools advance, automatic compliance becomes more ingrained in the software. The payroll software of today is data-driven, accessing all relevant information necessary for maintaining compliance. Taxes, wage rates and laws change frequently, so real-time updating is a must-have for payroll software.

Payroll software is set to become more globalized as businesses expand internationally. Today, even small businesses are regularly interacting with different states and countries around the world, facilitated by digital communication. Your payroll software should account for all of the various regulations at play when doing business across borders.

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The Gig Economy

In the near future, modern payroll software will begin to bend to non-traditional ways of working, specifically freelancers and the gig-based structure of businesses like ride-sharing apps, delivery services, on-demand dog walking and more.

The emergence of these jobs begs the question: should gig employees receive benefits? This is a question payroll software will have to answer and manage as these industries become more established.

CNN Business reports, “Millions of American workers don’t have access to health insurance through an employer. According to the Bureau of Labor Statistics, that applies to three out of for people who work for contract and temporary help agencies as their main job, as well as 10.6 million people whose primary source of income is independent contractor work.” To combat this issue, independent providers are emerging to offer flexible coverage options to these types of employees. Established insurance companies like Prudential are starting to look into potential contract worker plans, but with little tangible results so far.

In the future, will payroll software be able to pick up the slack when it comes to underserviced independent contractors? SurePayroll software advertises its features specifically tailored for payroll processing of independent contractors. Payroll systems and other companies are in the beginning stages of adapting to the demands of the gig economy, and will surely continue their efforts as more members of the workforce take on independent contractor roles.

Adopting Payroll Software: What You Should Know

For payroll software implementation, Susan Warren of Optimum HRIS offered three key factors to consider: integration, support and scalability. It is important to think about not only the functions of the software, but also the infrastructure and vendor backing that will most benefit your company. Integrated payroll systems offer the convenience of a centralized database and collaboration across multiple platforms. A quality support network as offered by the vendor will help transition your organization into successfully utilizing the software, and will continually be a learning resource. In reference to scalability, Warren kept it simple: “Get a system you can grow into, but don’t get more of a system than you need.”

An interview with Rick Chen of Gusto presented three additional considerations: “don’t forget about startup costs,” “seek time savings” and “learn about all of the options available.”’s “The Tech Gap: How Real Small Businesses Adopt Technology” report cites the perception of software adoption being too expensive (50.72 percent), too lengthy (40.58 percent) and too complicated (26.09 percent) as the top barriers for small businesses, aligning with Chen’s advice to stay informed.


Chen also advised, “If you have been running payroll by hand, look for a payroll service that will provide a seamless transition. Consider services that have concierge-style onboarding or training sessions, so you are confident when running payroll on your own.” Additionally, buyers should keep in mind, “Payroll software are not always equal. Some payroll providers also include payroll reporting, direct deposits, tax filings and payments, employee reimbursements, vacation, and sick day tracking and reporting and more. Take an inventory of how you have been running payroll so your new payroll software can handle all of your needs.”

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Payroll systems are a staple in any business in need of streamlined compensation processes. The software is beginning to move forward from this basic definition as the landscape of wages and work changes, and new technology is introduced to adapt to these changes. As new types of work (and payment) become standard and regulations change, automated payroll processes will become even more essential to businesses.

What tools do you think will become popular payroll software features over the next year? Let us know in the comments!

Contributing Thought Leaders

Gary AndersonGary Anderson

Gary Anderson is a seasoned enterprise & mid-market sales professional with over 20 years of experience working within the HCM, finance, security and SaaS verticals. He is currently the director of sales at Criterion.


Susan WarrenSusan Warren

Susan Warren is a software support and training specialist at Optimum Solutions.



Rick ChenRick Chen

Rick Chen is a company spokesperson for Gusto, the leading payroll, benefits and human resources technology platform for small businesses in the U.S. Each year Gusto processes tens of billions of dollars of payroll and enables thousands of businesses to provide employee benefits like health insurance and 401(k) retirement plans and 529 college savings plans, many for the first time.

Alainia ConradPayroll Software Trends: Future of Payroll Software In The Next Year


Join the conversation
  • Tochi Daniella - February 5, 2020 reply

    Having a payroll software will really make work easier especially in large enterprises. It will save time and maintain accuracy.

    Grace Savides - February 5, 2020 reply

    Thanks for commenting! I think you’re absolutely right.

  • Tochi Daniella - February 5, 2020 reply

    Namely will go a long way in future going by the features it has and the users satisfaction

    Grace Savides - February 5, 2020 reply

    Thanks for the feedback! Is Namely what you use? What have you liked about it?

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