Managing compliance across jurisdictions is difficult. Today’s payroll leaders face even more pressure than ever before in navigating a complex tax environment. Employees want their pay and taxes associated with it calculated accurately. Organizations want accuracy too; overpaying payroll taxes leads to loss of capital that can be used in other places and underpayment can lead to fines, penalties, and reputational damage.
Federal, state, and local tax calculations can be a challenge. Managing payroll in hundreds of locations, whether expanding the organization to new places, or managing a remote workforce, can make payroll tax management an even more daunting challenge. This leaves payroll leaders very little time to proactively protect the organization, for example, by modeling the impact of upcoming legislation. To gain time for these activities leading organizations are using AI to eliminate tedious transactional payroll processes:
- Agentic (Self-Service) Chatbots: Answer employee payroll questions, clarify information on pay stubs, and assist with tax form updates.
- Tax Calculations: AI can accurately and automatically calculate federal, state and local payroll taxes using an employee’s location, income, and benefits.
- Wage Garnishment & Benefit Deductions: Apply complex jurisdiction-specific regulations (e.g., retirement contributions, health insurance premiums) automatically.
- Report Automation and Compliance Filing: Electronic, AI driven tools automate payroll reports (e.g., W-2, 1099) and filing with government agencies.
Though a key measure of success, the payroll lifecycle extends beyond properly paying employees it touches and includes employee onboarding, tax calculations, deposits, filing, and compliance reporting. When regulatory changes occur, payroll teams need to be able to act fast. ERP integration ensures payroll data flows to payroll systems, enabling real-time calculations and reporting.
Business Software, Inc. (BSI) uses over four decades of experience in payroll tax operations, assisting clients to simplify the complexity of payroll taxes, reduce risk to the business, and automate manual tasks. Payroll leaders have more time for strategic activities. BSI’s flagship solution, TaxFactory™, is a cloud-based platform that is natively integrated with SAP S/4HANA and automates tax location and assignment, reciprocal tax handling, and garnishment. Transmitting SAP Payroll systems data directly to TaxFactory enables payroll leaders to quickly perform real-time calculations and reporting. Automation in the system helps eliminate manual tasks like wage and benefit taxes and year-end reporting, giving payroll leaders the time and tools to simulate “what if” scenarios that test the impact of legislative changes.
Managing payroll to outpace today’s regulatory change requires advancing automation. This frees time for analysis. Payroll leaders using SAP S/4HANA need solutions that are seamlessly integrated and deliver the accuracy and agility to manage payroll in real-time.
What this Means for SAPinsiders
- Native cloud-based integration of payroll tax solutions to SAP S/4HANA ensures data can be used for real-time calculations.
- Advancing the use of AI and automation in payroll frees time for analysis and scenario development.
- AI in payroll improves accuracy and offers employees self-service options to get answers to questions and/or clarify payroll information like pay stub and tax information.
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