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Paperless Payroll: 7 Ways Your Business Can Benefit

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Every business needs to handle payroll for its employees, but dealing with manual processing and paper checks and pay stubs can be daunting. Luckily, paperless payroll can help a business by using a digital or electronic solution to capture, process, and transmit employee payroll data and other related functions.

These tools are often provided by a single payroll processing system like IceHrm's, which helps streamline and simplify the payroll processing process.

Transitioning to paperless payroll can have a significant impact on a business. Paperless payrolls fall into three basic categories:

  • Electronic payslips. This includes essential electronic tracking and calculation of payroll.
  • Employee self-service (ESS). ESS software combines your electronic payroll with other HR tools, such as benefits management and other workplace-related functions. The platform can also be integrated with time tracking software, which can help record employee entry and exit dates and easily calculate the number of hours worked.
  • Electronic money transfer. This includes direct deposit tools, including electronic paychecks. EFT platforms streamline the payroll process by eliminating paper checks and automating key functions.

This article will discuss some of the benefits of paperless payroll, as well as some of the unique challenges, to help you make the best decision for your business.

Benefits of paperless payroll

There are many reasons why a small or medium-sized business should consider switching to paperless payroll; it's not just for large companies. These advantages can be

Cost savings

Direct deposit of wages and salaries instead of paper checks and mailing can save money. On average, sending paper checks costs almost twice as much as paperless payroll.

Faster processing

Paperless payroll can make paying employees incredibly quick and easy. By paying employees electronically, you automate payroll processing and give employees quicker access to their hard-earned wages.

Payroll cards have become a popular alternative for paying employees in recent years. This is a type of prepaid debit card that is applied for by employees and offered by employers. Wages are deposited into this card and not into a bank account.

Environmental benefits

The impact of paper consumption on the environment is clear: 70% of global greenhouse gas emissions come from pulp and paper manufacturers. By eliminating paper documents, your business can help reduce its environmental footprint.

Going paperless also reduces the number of paper products that are often left lying around workplaces. This minimizes visual distractions and improves employee concentration.

Improved accuracy and security

By automating payroll and HR functions, you minimize the risk of human errors hindering payroll processing. You'll have less to worry about paychecks getting lost in the mail when they're deposited directly into the employee's bank account.

Electronic encryption helps ensure data security, more than just a lock and key. Likewise, electronic signatures are more accurate than ever before. Electronic signatures are even preferred by the federal government as part of the Government Paper Elimination Act.

Rationalization of payroll taxes

An electronic payroll system can help you prepare tax forms and file your payroll taxes, in some cases even automatically. In many cases, you can submit your payslips through the same platform.

Some paperless payroll platforms give you access to tax forms and information about their deadlines. The program also helps you stay current with ever-changing payroll and employment tax requirements. This means you and your business will be better equipped to ensure payroll compliance.

Sufficient storage space

Physical storage always has its limitations, be it financial or physical. With digital storage, you have more space for documents and employee data than in filing cabinets.

With cost-effective cloud storage and hard drive options, your business has constant access to important data that can be stored for years without fear of damage or running out of space.


With an electronic, paperless system, you, your employees and your HR team can access it from anywhere. This helps improve working conditions for employees and makes remote work easier and more efficient, especially for those team members who need to work from home.

Paperless Payroll Considerations

No matter how you handle payroll, there are responsibilities and requirements you must meet. And paperless payroll comes with some unique problems.

Some employees may not have reliable internet access or use online banking. Others prefer or require paper checks and pay stubs. Consider your employees' needs before choosing a paperless payroll system.

Some states require employees to provide consent for direct deposit of their wages. State-specific requirements regarding the timely payment of final wages upon termination of employment and the time at which wages are deemed paid may also result in direct deposit not being the appropriate choice for such payments.

However, switching to paperless billing can help your business comply with payroll regulations. The Fair Labor Standards Act requires employers to retain payroll records for at least three years, and some states require payroll records to be retained for even longer. Using a digital service automates record retention, making it easier than ever to pull employee data from digital storage and comply with federal and state laws.

Make a decision

IceHrm offers online payroll services that make it easy to go paperless with electronic paystubs and electronic Form W-2 creation and submission. Our payroll includes direct deposit and payroll card options. You can also view estimated payrolls, which are automatically updated as you add your employees or make other changes. Through our self-service platform, your employees can also enroll in direct deposit, view pay stubs, change status, view and print W-2 forms, and track paid time off requests and their balances.

In today's digital age, IceHrm's paperless payroll simplifies processing while addressing environmental concerns and regulatory needs.

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