Restaurant Payroll Software: 14 Must-Know Launch Tips

Employees play a critical role in the success of your restaurant. Many of the behind-the-scenes operations at your company ensure all staff members are compensated fairly and supported. But manual payroll management requires valuable time that most restaurant owners don’t have. Here is where software helps streamline payroll processes.   

Reliable payroll software covers everything from coordinating staff payments to ensuring compliance with labor laws. Data aggregated within the tool assists in making sound decisions for your company—ones that bolster revenue and maintain employee satisfaction.  

This article offers actionable tips for launching payroll software in the restaurant industry, choosing the right tool, and reaping long-term benefits for your company. 

What is Restaurant Payroll Software? 

Restaurant payroll software manages the employee compensation process. A full-service payroll tool can cover the following five areas:

1. Tax withholding management: As an employer, you are responsible for withholding payroll taxes from your employees’ paychecks. Software does this automatically, reducing the risk of error. 
2. Time tracking: If you pay employees hourly, you need to accurately track their hours worked and calculate paychecks accordingly. Good payroll software does the math for you.  
3. New employee onboarding: When you hire a new employee, you must add their information to your payroll system. The software streamlines the direct deposit set-up process, benefit enrollment, and tax withholdings for each new hire.  
4. Automatic payments: You can ensure employees receive payments on time by automating payroll processing with software. It reduces the potential for late or inaccurate payments. 
5. Payroll record storage: Payroll software is a single source of truth for comprehensive data. Use it to understand where there may be operational inefficiencies, or how you can better support employees. 

For efficient payroll management, it's essential to use a tool that integrates with other systems. Restaurant payroll solutions may connect to your hiring system and accounting software to ensure consistent data metrics across all platforms.  

Pro Tip: To help garner a complete financial picture, consider integrating your point-of-sale (POS) software and marketing tools with your payroll and accounting platform. Doing so gives you a clear understanding of where each dollar goes when running a successful business. 

Benefits of Implementing Payroll Software 

Payroll software is an important restaurant back-office tool that helps streamline day-to-day operations. These are five benefits of adopting payroll technology: 

1. Reduction in human error: With payroll software, you don’t need to worry about missing fine details, calculation mistakes, or other errors.  
2. Save time and energy: Software allows for automated payroll processing, saving you plenty of time and effort.  
3. Labor law compliance: Most payroll tools adhere to standard labor laws, so you can rest assured that you’re compliant.  
4. Tax simplification: Instead of calculating tax withholdings yourself, set parameters in the payroll software so it can do so for you.  
5. Enhanced employee experience: Payroll software grants employees easy access to information regarding paychecks, taxes, benefits, and more.

With software to help you manage payroll, you gain a reliable tool to conduct everything from payroll calculations to compliance with tax regulations.  

5 Tips for Choosing the Right Restaurant Payroll Software 

To ensure payroll and tax compliance, choose employee payroll software that automatically handles every process. Use these five tips to help select the right payroll tool for your business:

1. Automatic tax management: Ensure your employees’ tax responsibilities are handled correctly by using software that can do it for you. 
2. Scalability: As your business grows, your tools need to scale as well. Choose a flexible payroll software solution for when you grow into a larger, multi-unit restaurant.  
3. Quality customer support: You’ll likely have questions when getting started with a new tool. Reliable customer support makes learning easier.  
4. Employee self-service portal: Allow employees to view their own information, submit changes, and elect for certain benefits within a self-service portal.  
5. Time tracking and scheduling: Employee hours determine how many shifts they can legally work and the amount due on their next paycheck. Ensure that all this information is correct by onboarding a solution that automatically schedules shifts and calculates paychecks.

Along with the individual features that make paying employees on time simple, payroll software must comply with labor laws. Make sure you’re acquainted with your state and federal laws regarding employee payment, workplace accommodations, and overtime. The best restaurant payroll software will feel intuitive for your team and feature the functionality you need. 

Pro Tip: If you use gift cards to reward employees, make sure your payroll software can help navigate any associated tax responsibilities. 

Setting Up Your Restaurant Payroll Software 

After you’ve selected a new restaurant payroll software, it’s time to implement it. Integrate it with your other HR and accounting technology before it’s ready to tackle payroll management effectively. Follow these six steps to set it up:

1. Import all employee payroll information: Move all your employees’ information into the new payroll system and ask them to verify their information. 
2. Establish payment schedule: Set a payment cadence so the payroll software can issue checks automatically and on time.  
3. Select tax withholdings: Ensure the tool is structured to withhold the correct amount for each employee’s local, state, and federal taxes.  
4. Set up direct deposit: Ask employees to add their banking information to the software to establish direct deposit for streamlined and fast payments. 
5. Create options for benefit withholdings: Make sure the software reflects an employee’s options to receive medical benefits or contribute to a 401k. 
6. Set up time tracking and scheduling:

The security of your employees’ data is likely top of mind. Look to the software’s customer support team to facilitate a seamless integration that ensures data security and accuracy throughout the transition.  

Pro Tip: Request that employees set up unique passwords, two-factor authentication, or any additional security measures when establishing their accounts.  

Training Your Team on New Payroll Software 

The implementation of any new technology requires employees to dedicate time to learning the tool. Stress the importance of employees knowing how to navigate the platform, whether they need to adjust their tax withholdings or 401k contributions. Here are three tips to help train your team on the new software:

1. Set expectations for the new tool rollout: Discuss a timeline for implementing the new tool with your employees. Additionally, ensure they are aware of any steps they may need to take, like creating an account or verifying information. 
2. Facilitate opportunities to learn the tool: Videos, in-person training sessions, or group demos can help employees learn the new payroll software.  
3. Create user guides and support resources:

Step-by-step guides allow employees to solve problems and answer questions quickly and independently.  

Thorough documentation gives new and future employees access to helpful information whenever they need to act within the payroll software. It’s a reliable place for employees to find the answers they need. Yet, as restaurant leadership, it’s crucial to keep this documentation updated to always remain helpful.  

Streamlining Payroll Processes with Automation 

Not only does automating payroll processes save you time, but it also guarantees accuracy. Employees who receive predictable paychecks on a reliable schedule are more likely to be satisfied with their employer.  

Tasks like time tracking, real-time wage calculations, and on-time payments can all happen automatically. All those hours spent on payroll historically can be reallocated to creating impactful restaurant marketing strategies or revamping your restaurant loyalty program.  

In short, you have more time to enhance parts of your business that drive revenue and boost guest engagement. Our 2024 Loyalty Guide features the leading strategies to enhance customer experiences. As your restaurant generates increased revenue, you can expand your team and offer better compensation packages to your employees.   

While automating payroll tasks means you can be less hands-on, you should still make it a habit to check for accuracy. Be especially diligent after making a software update. 

3 Maintenance Tips to Start Using Today 

All software requires periodic maintenance to continue running smoothly. These are three tips to help you keep the software accurate and helpful:

1. Regularly update employee information: Coordinate periodic audits to ensure employee information on file remains up to date.  
2. Backup the data: Determine a secondary location to back up payroll data just in case the software malfunctions.  
3. Verify alignment with tax laws: Occasionally compare tax withholdings against the current tax table to be certain your protocols are accurate.

Pro Tip: Schedule payroll software maintenance for off-hours. It’s when employees are least likely to need access to the tool. If this isn’t possible, let your team know when to expect maintenance to take place. 

Monitoring and Analyzing Payroll Data 

Payroll software aggregates data related to employee finances—the trick is learning how to get the most out of your payroll data. Here are four insights you uncover by analyzing payroll data:

1. Competitive compensation: Gain a big-picture view of each employee’s pay compared to their tenure, hours worked, title, and benefits to ensure everyone receives fair and competitive compensation.  
2. Overtime payments and frequency: See if there are some employees who often work overtime to determine potential staffing changes. Additionally, it helps you be certain employees are paid for overtime.  
3. Employee turnover rate: Identify if certain areas of the restaurant experience a high turnover rate and incur other related’ labor costs. These insights tell you where to look closer to discover opportunities for greater employee satisfaction.  
4. Employee benefit spend: See how much you put toward employee benefits, which perks employees take advantage of, and determine if there are gaps between the two.

With this bird’s-eye view, you identify areas where payroll operations are inefficient. From there, you can devise strategies to reduce costs yet continue providing satisfactory employment for your team. Accurate data helps you make decisions that are good for your business and bolster employee retention.   

Frequently Asked Questions About Restaurant Payroll Software 

Restaurant payment software holds the potential to completely enhance the workplace. To learn more, review the following FAQ section. It’ll serve as an overview of the content provided above, as well as a snapshot of the topic in general. Read on! 

What’s the best payroll software? 

There are many options for payroll software available to you. Companies like ADP, Toast, and Gusto are three of the most well-known. Ultimately, you must select a payroll tool that meets your needs and feels easy for your team to implement.  

How do you do payroll for a restaurant? 

The most effective strategy for managing restaurant payroll is by using payroll software. Such a tool allows you to automatically pay employees, manage tax withholdings, track time, and handle many other payroll-related tasks.  

Can I do payroll myself? 

Payroll processes tend to be complex, so avoid conducting them by hand. However, payroll software still allows you to coordinate payroll yourself. With it, you avoid outsourcing the work and maintain easy access to payroll data.  

What brand is the largest payroll provider? 

ADP is one of the world’s largest and most-used payroll providers. However, companies like Gusto and Toast aren’t far behind. 

What’s the most common frequency of pay? 

The most common pay frequency is biweekly, so employees receive a paycheck every two weeks. However, many companies pay employees weekly, while very few pay them monthly. In fact, monthly paychecks are only common in the world of freelance or 1099 work. 

Taking the Next Step 

There are several restaurant payroll solutions available for your consideration. But choosing one can feel overwhelming. The right first step is familiarizing yourself with standard software features and determining which are critical for your business. Use this information to narrow your search.  

Payroll software implementation now boasts long-term benefits. As your company grows and employment becomes more complex, the tool fills any gaps, ensuring there are no setbacks when hiring valuable team members. 

Time saved by automating back-of-house operations means you’re more available to focus on generating revenue and acquiring new customers. If you’re ready to consider your options, schedule a demo with us today to learn about our complementary payment features.