Payroll In Hospitals and Healthcare
14 minutes read

Payroll In Hospitals and Healthcare

Hospitals need competent employees to run smoothly. Experienced doctors and efficient payroll management are essential for quality patient care. Payroll management at hospitals is complex due to varying pay scales, overtime hours, and on-call doctors. So, comprehensive payroll systems are necessary to manage all aspects of hospital operations.

So, to know the comprehensive details about payroll in hospitals and healthcare, we will discuss the following points.


What is payroll in hospitals and healthcare?

Payroll in hospitals & healthcare is the process of managing the salaries, wages, benefits, deductions, taxes, and other payments of the employees who work in the health sector. Payroll in hospitals and healthcare is a complex and challenging task, as it involves various factors such as:

  • Type of employees, such as doctors, nurses, technicians, pharmacists, administrators, and others.
  • They have different pay scales, allowances, incentives, and bonuses for different categories of employees based on their qualifications, skills, experience, performance, etc.
  • Various laws and regulations that govern the payment of minimum wages, overtime wages, gratuity, bonus, social security contributions, income tax deductions, and others.
  • Different payroll cycles and frequencies, such as monthly, biweekly, and weekly, and other payroll methods and modes, such as electronic transfer, cheque, cash, and others.

Payroll Challenges in Hospitals & Healthcare

Following is the list of payroll challenges which is faced by hospitals & healthcare –

  • Salary Structure

    Healthcare industries have complex salary structures that can be difficult to manage. These structures include various allowances, incentives, and bonuses for healthcare professionals, administrative staff, and support staff. It’s important to manage these structures accurately.

  • Regulatory Compliance

    The hospital industry is subject to strict regulations, especially when it comes to payroll. In order to comply with labor laws, tax regulations, and industry-specific rules, payroll needs to adhere to various requirements. However, ensuring compliance with laws like the Employees’ Provident Fund (EPF), Employee State Insurance (ESI), Minimum Wages, and the Clinical Establishments Act can be particularly challenging.

  • High Turnover Rates

    The hospitals & healthcare industry often experience high turnover rates, particularly among doctors & nurses. Frequent hiring and onboarding processes can increase payroll processing workloads.

  • Shift Scheduling

    Hospitals and healthcare industries operate 24/7, and staff often work in different shifts. So, managing different shift schedules and calculating overtime accurately can be complex and time-consuming for HR.

  • Employee Classification

    Distinguishing between different types of healthcare professionals (e.g., doctors, nurses, technicians) and their corresponding pay grades and benefits can be challenging. Misclassification can lead to compliance issues.

  • Attendance and Leave Management

    Due to irregular hours and unexpected absences, managing attendance and leave accruals for healthcare employees can be challenging.

  • Skill-Based Pay

    Hospitals and healthcare may provide additional compensation to employees with specialized skills or certifications, which is known as skill-based pay. However, managing and tracking these skills and their associated pay rates can be a difficult process.

  • Unionised Workforces

    When healthcare facilities have unionised workforces, managing payroll becomes more complex. Negotiations with unions can impact pay and benefits, adding another layer of difficulty.

  • Integration

    Healthcare facilities often use different software for HR, payroll, and timekeeping. That can make it difficult to integrate these systems for seamless data transfer and accuracy. Simplifying the language and organizing the information logically can help ensure that all audiences understand the message. Using everyday language and the active voice helps to make the information clear and concise.

  • Additional Benefits

    Managing employee benefits, such as retirement plans and other perks, can be complicated, especially when multiple providers and plans are involved. Organizing the information logically and using simple, everyday language to make things easier is essential. Keeping sentences short and to the point and using an active voice to clarify who is doing what is essential. By following these guidelines, you can make sure that your employees have a clear understanding of their benefits and how to manage them.

Importance of payroll software in hospitals & healthcare industry

  1. In a hospital, there is usually a union that represents the healthcare professionals employed there. A payroll software system is necessary to handle the salaries of both permanent and temporary staff. These features help the hospital adhere to the regulations set by the union, resulting in improved relationships between employees and the union.
  2. Accurate payroll management is crucial for hospitals to keep their staff motivated and productive. However, hospitals face unique challenges due to fluctuating work demands. Hence, a reliable payroll software that can handle complex calculations and track various factors is necessary. This includes holidays, overtime, and other types of leave that affect compensation. By investing in robust payroll software, hospitals can ensure timely and accurate payment to employees, maintain productivity, and identify areas for cost savings.
  3. Payroll software manages employee salaries, taxes, and deductions accurately. It also provides access to crucial information like salary slips and pay scales through an employee-end portal.
  4. Effective payroll management is crucial in healthcare. Confidential employee information needs to be handled carefully. Hospitals use payroll software systems to avoid errors. Payroll experts ensure timely and accurate payments.
  5. Payroll software for hospitals is essential to minimize errors and provide easy access to workers’ information. It manages pay scales, tracks new hires and resignations, updates worker data, and complies with regulations. Using payroll software for hospitals is a wise decision to maintain efficiency and reduce the burden on the HR department.

Benefits of payroll in hospitals & healthcare?

The following are the benefits of payroll in hospitals –

  • Simplified payroll reduces errors and improves financials and satisfaction.
  • It can manage complex pay structures, allowances, incentives, and bonuses for diverse healthcare roles.
  • It complies with laws and regulations for wages, overtime, social security, and taxes.
  • Employees can engage with the system for payroll information, Benefits, and decisions.
  • It is ensured that the payment of wages, overtime, social security, and taxes is in compliance with all applicable laws and regulations.
  • Various reports and analytics can be generated to monitor and measure payroll performance and outcomes.
  • Payroll software can integrate with other health sector systems like HR, accounting, and attendance to enhance capabilities, efficiency, and outcomes.

What are the Solutions for hospitals & healthcare?

To ensure timely and accurate payment of employees while tracking real-time data, we have designed Saral PayPack hospital & healthcare solution with an intuitive and logical workflow that keeps you ahead in the business world.

  • Data Management 

    Our data management system securely stores all essential HR and healthcare documents on your desktop so that the data is safe, along with managing your employee data client details, streamlining processes, and increasing efficiency.

  • Shift & Schedule Tracking 

    Saral PayPack software can help you create various shift options that can fulfil your healthcare facility’s requirements. You can determine who qualifies for shift differential pay and how to distribute it based on your pay period. This software also allows you to assign different shift amounts to departments and eligible employees. Additionally, you can review shift differential details and make any necessary changes before processing payroll to ensure accurate paychecks.

  • Time Tracking 

    Hourly, remote, and traveling employees can easily clock in and out using a GPS tracking system, giving you real-time data on where your healthcare staff is working and how many hours they’re logging. You can define specific areas where employees can clock in and out, ensuring more accurate time capture. You can view exactly where and when your employees log their hours by accessing detailed activity reports.

  • Timely Reporting and Analysis 

    Use real-time analytics and dashboards to gain cross-location visibility into your healthcare facility’s metrics, including turnover rates and labor expenses. Collect the necessary information for reporting and utilize the data to file forms with the appropriate agencies to reduce risk. Automate report transfer by email and take advantage of global reporting for actionable insights across locations.

  • Employee Self-Service

    Employees have queries regarding their pay scale, deductions, and changes due to various reasons. The payroll department of the hospital is responsible for addressing these issues. Payroll services for healthcare can help reduce the stress on these departments and simplify the process of providing necessary information to employees.

This brings us to the end of our discussion on Payroll in hospitals & healthcare. Let us know your other questions and opinions on this topic. Mention below the comment box.


Check out the more related posts.

Payroll software for Manufacturing industry

Payroll in hotel and hospitality

Say Goodbye To Your Payroll Struggles

Discover how Saral PayPack can enhance payroll in hospitals with a demo. Take advantage of this opportunity today.

Schedule a free demo now.

Book a Demo


Join our exclusive Saral PayPack Insights WhatsApp Group for HRs and Payroll Professionals to stay ahead in the ever-evolving trends. 

Get timely reminders, regular updates and insights into various aspects of payroll & HR operations as well as a sneak-peak into our Payroll software which is trusted by 5000+ professionals.

Scan the QR code or visit the link: