Where should Payroll be housed?

As our organization evolves and grows, the question of payroll and it's position in the company has come up. Right now, it sits in HR. Initially, it was an HR function as they also did data entry and HRIS management. As we have grown, the data entry and HRIS responsibilities have moved on to other roles within the org. Now, I am sitting with a headcount that is just payroll and I'm considering making a play to move it to Finance and open a new HR role. Thoughts?

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Never should be in HR. Should be in Finance

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HR should never control Payroll. You must have a check and balance. Payroll is money movement and belongs under Finance. HR and payroll should always be separate and one dept should check the other depts additions, pay increases, terms, pay increases etc.. HR is Benefits, Employee maintenance and Payroll is Finance. If HR does everything and CFO is not verifying and signing off - you (the company) is way out of compliance and wide open for fraud and will be red flagged for internal/external audits.

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Finance...always! There seems to be this misnomer that payroll is an HR function! How?

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Our HR Department houses the data for payroll and accounting process' payroll. With good communication it works wonderfully. The less that Finance knows about people business the better.

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Totally disagree on it being under HR...different skills needed in accounting. There may be some compliance cross over, but processing payroll is a finace funtion, and does not belong in the HR wheelhouse.

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It has been housed in Finance at every company I have ever worked for.

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In my past experience larger organizations have it under HR in some capacity, bundled with benefits, reporting, scheduling etc., named as HR Shared Services. Small ones have payroll under finance. Larger orgs are audited usually by companies like Deloitte to ensure compliance. Finance can still sign-off on payments While remaining separate.

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I only work at small companies and Payroll has always been an HR function.

Interesting that there are so many that say Finance. I worked for a very large bank and it was in HR. My current employer it started out in Finance, but the Finance manager spent all her time collaborating with HR, they moved the function to HR. Just because it is in HR does not mean there is not oversight. Finance still has to to sign off on payroll before final processing. Many employers now have a People Operations shared service center, and payroll processing is part of that.

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Finance

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Payroll processing is a Finance function. Its never belonged under HR. There is some compliance cross over, but its taxes and accounting at its core.

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Finance, always and forever.

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It’s always been a finance function everywhere I’ve worked. Both government and industry. Def not a HR function.

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I think it depends on structure. Smaller organisations keep it in HR, but as things grow, finance often makes more sense. It is about where it aligns best operationally.

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Yes finance for me.

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When I worked for large corporations, it landed in HR. HR process the upstream data inputs and verifies the entries are captured. Accounting processes the journal entries and books them. We were audited regularly, so it worked very well. In recent years, I've worked for a very small company and I am the only HR person handling A-Z. I compile the HR data and our Controller inputs the data so there is a separation of duties. Honestly, I'm glad to be rid of the bulk of the payroll duties, but I also like to ensure that all entries have been captured for the period. The coordination with Accounting is necessary and works well.

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I have worked in organizations where Payroll is in HR and within Finance.
I have changed my opinion on this based on experience and find it best housed within Finance. [with the persons who perform Payroll reporting to HR with a dotted line]

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It should be under finance.

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