Business today continues to change at lightning speed. The rise of hybrid and remote work following the pandemic has changed how people think about their workplaces and how businesses run. As companies themselves have shifted, so too have the payroll systems involved.
Properly running payroll services for small businesses requires businesses to consider all the regulations on the local, state, and federal levels, as well as how to quickly onboard employees, manage overtime, and properly pay people when they work unusual schedules. Small businesses need tools like automated payroll for SMBs that allow them to keep up with these innovations so they remain fully compliant with laws and keep their workforce happy.
Let’s look more closely at what you should know about the future of payroll and your organization.
Merging Payroll Technologies: The Future of Payroll
Automation and AI have already had a sizable impact on the payroll industry. Businesses do not want to risk human errors in computing or entering data, as mistakes will frustrate employees and can even lead to fines. However, automated payroll systems and AI can help complete these tasks, reducing errors and the time needed to complete the tasks. AI can also help businesses make payroll predictions, find trends, and allocate resources to help the business thrive.
With AI, businesses can also make real-time payroll adjustments. This means the system can easily determine payroll regardless of changes in schedule, ensuring employees are paid on time.
Payroll Compliance Updates and Regulatory Changes
Laws and regulations surrounding payroll, overtime, benefits, and wages can change regularly. In 2025, for example, employees will need to make sure their systems accurately reflect shifts, including:
- An increase in the Social Security wage base to $176,100
- The pre-tax contribution level of 401(k)s increasing to $23,500
- FICA threshold increasing for household employees to $2,800
- The increased limit of contributions to health flexible spending arrangements to $3,300
As businesses try to understand the relevance of these changes to their unique situations and stay up-to-date with any new changes, technology can be an enormous asset. Systems that automatically update with the latest laws can help you implement changes and see how they impact your payroll compliance in 2025 without missing a beat.
Embracing Payroll Technology Trends
Payroll systems that offer integration with employee self-service portals can improve the system’s ability to track employee hours and benefits. Employees can get accurate, real-time information about their payroll, and the information they enter regarding their hours and time off will all be properly accounted for.
Some advanced systems offer employees benefits such as flexible and on-demand pay options. With these options, employees can access their wages outside traditional pay periods, which can help them with financial management and improve overall employee satisfaction.
Preparing for Implementation
If you are interested in making changes to your payroll, it is important to carefully evaluate your options and select the one that fits the needs of your business best. When evaluating your payroll options, consider factors such as:
- How well this option fits with your existing HR systems
- What types of benefits and capabilities will matter most to your company
- How easily the system can scale with your changing business needs moving forward
Taking these considerations into account can help you choose an option that will fit best with your needs, providing you with a suitable option long term.
Of course, anytime a business pivots towards new capabilities, challenges can arise in its operations. Preparing for these common challenges can help you avoid disruption to your employees and your HR operations.
Plan ahead to when you will make the switch based on the ease of transitioning information for benefits and taxes. Many companies will find these types of transitions to be easiest at the start of a new year.
Verify that your new system will integrate well with your other systems. Set aside time and resources to dedicate to the transition so that you can make sure all your employee information is ready for the new system.
Let your employees know about the switch. If it will provide them with new benefits or a change in their pay periods, offer multiple informational sessions to make sure everyone understands what will happen. Work with your new provider to know what information they need and when.
Encountering The Future Of Payroll 2025
Business culture has changed tremendously across the country over the last few years. Between growing technology, employees working remotely, and the introduction of AI into the workplace, HR departments and payroll specialists have to be prepared to keep up.
Adopting new payroll technology can empower small businesses to keep pace. This technology can help reduce errors and make it easier to stay updated with the latest shifts in regulation. Since the technology also easily syncs with systems to track employee hours, wages can be updated in real time to make sure everything is computed accurately.
If you want to learn more about how implementing these new systems can help your organization, schedule a demo today. Contact ASAP Payroll to explore specific small business payroll solutions and how they would work for your business.
