A payroll processor pays your people and files the taxes. An HRIS keeps the records, the documents and the reports around that. They do different jobs. Some companies sell both together, which is why they often get mixed up.
The short answer
Payroll is about money. It works out what each person is owed, takes out taxes and deductions, pays them and files with the government. Getting this wrong has real consequences, so it needs a specialist.
An HRIS, or human resources information system, is about information. It knows who works for you, what paperwork they have finished, how much time off they have and which benefits they chose. If an HRIS is new to you, start with what is an HRIS.
Who does what
This is how the jobs split when your HRIS and your payroll processor are separate, as they are with HRGP. If yours bundles them, ask which plan includes which job.
| Job | HRIS | Payroll processor |
|---|---|---|
| Pays employees | No | Yes |
| Withholds and files payroll taxes | No | Yes |
| W-2s and final payroll register | No | Yes |
| Keeps hours and time off | Yes | Uses them to pay people |
| New-hire forms (I-9, W-4, state) | Guides and keeps them | Needs the details |
| Employee records and files | Yes | Only what it needs for payroll |
| Benefits enrollment records | Yes | Takes the deductions |
| Hiring and onboarding | Often | Depends on the plan |
| Moves your money | No | Yes |
Why the difference matters
Knowing who does what saves you from two common mistakes.
Thinking your HR software handles taxes
If you buy an HRIS that doesn't run payroll, you still need a payroll company. Always ask directly: "Who pays my people, and who files my payroll taxes?"
Thinking your payroll company handles HR
Many payroll companies offer HR tools, but what you get depends on your plan. Hiring, onboarding forms, time off requests, employee files and first-90-days check-ins may not be in the plan you have. Ask.
What about your payroll company's HR plan?
It can be a good choice. One vendor and one bill is simple. It's worth pricing out, especially if you want to stay with your current payroll company anyway.
The tradeoffs to check are the cost of the higher plan at your headcount, how much of the hiring side it covers, and how hard it would be to change payroll companies later. A separate HRIS lets you change one without the other.
How the two work together
When they're separate, a typical pay period looks like this:
- New hires finish their forms in the HRIS.
- Hours and time off go in during the pay period.
- You check the numbers and approve the period.
- The HRIS prepares a file or entry sheet.
- You send it to your payroll company, which runs payroll, pays people and files the taxes.
The information goes one way. The money never touches the HRIS.
Questions to ask
- Does this product move money, or does it only prepare information?
- Which payroll companies do you prepare files for? Is mine one of them?
- What exactly goes in the file? Does anything have to be typed in by hand?
- Who sees pay rates and Social Security numbers?
- What reports can I get without calling my payroll company?
Our buying checklist has the rest.
How HRGP works with payroll
HRGP is the HRIS for small business, from the first applicant through payroll. Your payroll processor pays your people and files the taxes. HRGP handles the rest: the records, the documents and the reports.
You keep hours, time off and pay details in HRGP and see each employee's estimated pay before you send anything. Then Send to payroll prepares the file. Payroll reports answer questions about hours, overtime, time off, pay details and benefits. Payroll preparation is for US businesses.
Common questions about HRIS and payroll
Does an HRIS pay my employees?
Not always. Some products bundle HR and payroll. HRGP doesn't: it never moves money. Your payroll company pays your people and files the taxes.
Do I still need a payroll company if I use HRGP?
Yes. HRGP keeps the records and prepares the file. You need a payroll company or payroll service to run payroll, pay people and file taxes.
Which payroll companies does HRGP work with?
HRGP prepares a file or entry sheet for Gusto, BambooHR, ADP, Paychex Flex, Paycom and QuickBooks Payroll, plus a general file for other payroll companies. Information goes one way, from HRGP to your payroll company.
Does HRGP calculate taxes or net pay?
No. HRGP shows estimated gross pay and deductions, labeled as an estimate and not a paycheck. Your payroll company calculates the taxes and the final pay.
Is payroll preparation included in the price?
Yes, through June 30, 2027. We'll tell you the price before anything changes. It's for businesses in the United States.
More guides
One place for your people
Keep the work connected, from applicant through payroll
HRGP is the HRIS for small business. It keeps applicants, messages, interviews, onboarding, employee records and payroll preparation together in one system. Your payroll processor pays your people and files the taxes, and employers make the final hiring decisions.
See the HRIS