A payroll system is a software or process used by businesses to manage employee compensation. It calculates wages, deducts taxes, and ensures that employees are paid accurately and on time. Payroll systems can also track hours worked, overtime, and benefits, making it easier for companies to comply with labor laws and regulations. These systems often integrate with other business functions, such as accounting and human resources, to streamline operations. Many payroll systems offer features like direct deposit, electronic tax filing, and employee self-service portals, allowing employees to access their pay information and manage their benefits online.