How to Use Payroll Data to Scale Smarter and Stay Ahead

What do you do with payroll data after running payroll? In case you didn’t already know—running payroll is a great opportunity to gather game-changing payroll data every pay period. With the right payroll software, there’s a goldmine of insight at your fingertips: from staffing needs to labor costs to team performance.

Pair that internal data with public employment trends, and you’ve got the context to make smarter HR decisions and stay competitive. Here are some simple, effective tips on how to analyze payroll data for your growing business.

TL;DR: The difference payroll data makes

Want a quick breakdown about how analyzing payroll data can help your small business? We’ve got you.

What payroll data is most helpful for:

• Reducing payroll errors
• Improving labor management
• Analyzing your pay structures
• Refining your employee benefits
• Staying compliant with payroll and employment laws
• Building an informed business strategy

How to collect payroll data:

• Use payroll software for automated time tracking
• Regularly update your employee information
• Verify all of your data before a payroll run
• Track all your benefits and deductions
• Review your payroll reports for up-to-date insights
• Securely back up all of your data

How to analyze payroll data and records:

• Compare your basic salary and wages to other industry trends
• Review what your labor budget can handle (both wages and benefits!)
• Pay attention to hours and overtime trends
• Stay on top of payroll compliance to avoid penalties
• Be mindful of social inequities and pay gaps
• Determine the best time for hiring
• Search for ways to be cutting-edge with your payroll 

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What is payroll data?

Payroll data is all the information you gather when paying your employees.

Some examples of payroll data include:

• Hours worked
• Hourly wages or salaries
• Overtime hours
• Sick days and vacation time (PTO)
• Bonuses and commissions
• Employee benefits like health care or retirement
• Taxes and deductions

All of this data tells you a story about how your team works, what it costs to keep things running, and where you might need to make changes as your business grows.

Who should have access to payroll data?

To keep sensitive info safe and the payroll process smooth, only those directly involved in your finances should have access to payroll data. For most small businesses, that includes the business owner, a trusted accountant or payroll consultant, and sometimes managers who handle scheduling or budgets.

Why is payroll data useful?

Beyond just numbers, your payroll data is a window into how your business operates and grows. 

Here’s a look at how analyzing payroll data can transform the way you manage your business:

Reduce payroll errors

Mistakes happen, but no one wants to deal with the fallout from payroll errors. Reporting incorrect wages, missed overtime, or miscalculated taxes can cost your business time and money. It can also harm the trust you have with your staff.

By regularly reviewing your payroll records and using reliable payroll software, you minimize these risks and keep everything running smoothly.

Labor management

Analyzing payroll data is the fastest way to see how labor is used across your business. Keeping an eye on hours worked, overtime, and schedules isn’t just busywork—it’s how you avoid paying more than you need to.

Labor management protects you from overstaffing slow shifts or missing overtime triggers, especially if your business is in a rapid growth period.

Many part-timers would prefer full time work, but get stuck when their hours are cut. Explore if giving your trusted staff more opportunities to work would save you money compared to hiring extra part-time staff. 

Analyze existing pay structures

Digging into your payroll data is a great way to check in on your pay structures. It helps you spot gaps and make sure your team feels valued—no matter their role, experience, or time on the job.

Ask yourself:

• Are newer employees earning competitive wages for their job and experience level?
• Are raises tied to performance or in line with industry standards?
• Are there any pay gaps across roles or departments?

These kinds of insights keep your compensation fair and motivating, which helps you keep your best employees by your side.

Refining employee benefits

Payroll data usually covers more than just pay—it also includes things like health care, retirement contributions, and paid time off.

This information tells you:

• Who’s actually using which benefits
• What the real cost of these benefits are
• How competitive your benefits are compared others in your industry

Did you know that 3 in 4 workers would accept lower salaries if they had better benefits? Figuring out how a pay bump stacks up against offering better benefits helps you see what really moves the needle without blowing up your labor budget.

Ensuring compliance

Whether you’ve got five employees or fifty, payroll compliance is non-negotiable. Tax laws, labor regulations, and reporting requirements aren’t glamorous, but errors can get you slammed with fines and penalties.

Automated payroll software can give you some peace of mind by:

• Managing your tax withholdings
• Staying on top of tax deadlines
• Keeping your payroll records tidy

Make informed business decisions

Analyzing payroll data gives you big-picture insights to help plan ahead for your small business. Whether you’re mapping out a staffing plan, dreaming about new locations, or eyeing rapid growth, knowing your labor costs and workforce trends is key.

Plus, when you measure your payroll records against public employment data and industry benchmarks, you’ve got more tools for your business strategy.

How to collect payroll data

As your business grows, it’s worth moving beyond spreadsheets and into payroll software (if you haven’t already done so). Wouldn’t you want a smoother and more accurate payroll process?

Here’s how you can use that software to gather essential data from your payroll records:

• Set up automated time tracking. Ditch manual data entry and set up timesheet tools that accurately record employee hours worked, including overtime and breaks.
• Regularly update employee info. Keep your team’s roles, salaries, and benefit selections current in the system. An integrated employee portal helps them track this information in the same place where they clock in and request shift swaps.
• Verify and reconcile data. Before running payroll, double-check for missing hours, incorrect rates, or any unusual entries compared to the prior month. This is where payroll software shines as it decreases the likelihood of manual error.
• Track benefits and deductions. Make sure all employee benefits, tax withholdings, and other deductions are properly recorded.
• Run consistent reports. Use your software’s payroll reporting features to pull regular snapshots of your payroll data, so you always have the latest insights at your fingertips.
• Backup and secure data. Protect sensitive employee information by using secure storage and limiting access to trusted team members.

Homebase tip: If your payroll software isn’t meeting these needs, here’s a look at how to switch payroll providers.

How to analyze payroll data for better decision making

Analyzing payroll data means asking the questions that turn numbers into smart business moves:

• Is your basic salary competitive compared to market and public employment data?
• Can your labor budget handle your current wages and salaries?
• How do employee benefits like health care and paid time off impact your overall employment costs?
• Are there trends in hours or overtime that show you might need to adjust your workforce needs?
• Is your payroll process compliant with labor regulations and tax requirements?
• Are there any social inequities (such as the gender pay gap) that need to be addressed?
• Does your hiring process need to be seasonally adjusted?
• What’s your data telling you about the best timing for hiring or expanding your team?
• Where can you go above and beyond for your employees?

Say you notice overtime’s creeping up—that might mean your team’s stretched too thin, and it could be time to bring in some help. Or if your pay is lower than what others in your industry are offering, a raise might help you keep great people and attract new talent.

Integrating payroll data with other apps

Payroll data gets even more valuable when it’s connected to the rest of your business. Integrating your payroll processing software with tools for scheduling, time tracking, or accounting means less manual work, fewer errors, and quicker, smarter decisions.

Here’s how to sync or import your payroll data into payroll reporting software, step by step:

QuickBooks Online Plus

Curious about how to import payroll data into QuickBooks? You’ve got two options: importing it manually, or using direct integration.To import data manually, you need to create a Full Payment Submission (FPS) with your maximum listed amount of employees as an XML file. From there you can upload it into QuickBooks Online Standard Payroll.

If you're using a supported online payroll service like Homebase, QuickBooks can sync automatically. This is the easier option: just connect the apps through the QuickBooks App Store or within your payroll provider’s settings.

ADP

To bring payroll data into or out of ADP, start by logging into your account and exporting payroll reports under the “Reports” tab. These files can then be uploaded into accounting platforms like QuickBooks or time-tracking systems.

Again, for an easier option, the ADP Marketplace also offers API-based integrations for different payroll and HR software.

Gusto

Gusto supports native integrations with many business tools. To sync payroll data, simply go to Settings > Integrations and connect accounting, time tracking, or HR software directly.

If you're still in spreadsheet territory, you can export a payroll report in .CSV format and manually upload it to your chosen platform.

Homebase tip: We play nicely with Gusto so you can integrate our payroll rules with Gusto’s HR software. The best of both worlds!

Homebase

Whether your small business is just starting out or you’re growing quickly, Homebase has tools that hourly teams need to thrive. Instead of bouncing between software, we offer our full toolkit in one easy-to-use mobile app.

Since your team’s hours and shifts are already tracked in Homebase, all that info flows straight into payroll automatically. No spreadsheets, no manual uploads—just fewer steps and fewer chances for mistakes.

Plus, when it’s time to run payroll, Homebase calculates wages, handles taxes and employee benefits, and files everything for you. Compliance? Check!

Ready to make payroll feel less like a chore? Let’s talk about what we can do for your team.

Use payroll data to build your dream team

As your business grows, your payroll data is a shining tool for scaling smarter. It can show you where costs are creeping up, which roles are overstretched, and how to better match pay with performance.

But analyzing payroll is all about building a better environment for your team. When you get how your payroll process affects your people, you can build a more supportive workplace. And when your staff feels taken care of, they’re more likely to stick around and give you their best.

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FAQs about payroll data

Here’s a quick breakdown of frequently asked questions about payroll data:

What is payroll data?

Payroll data includes all the information related to employee compensation and work hours. This data helps businesses manage payroll, track wages, and ensure compliance with tax and labor laws.

What is an example of payroll data?

Examples of payroll data include employee hours worked, hourly rate of pay, salaries, employee benefits, overtime hours, and deductions like taxes or health care contributions.

Who is responsible for collecting payroll data?

Small business owners, payroll managers, and accountants are typically responsible for collecting and managing payroll data. Payroll information includes private employee data, and should only be shared with those who need it to do their jobs.

How do I collect payroll data?

Most businesses use online payroll services to collect and manage payroll data efficiently. These services automatically track employee hours worked, calculate wages, and create payroll records.

How do I analyze payroll data?

Analyzing payroll data involves asking questions about:

• Salary competitiveness
• Labor costs
• Employee benefits
• Overtime trends
• Pay structures

Along with this, comparing your internal data with public employment trends in your industry help you make key business decisions about managing payroll.

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