The Evolution of Payroll Systems in Sri Lanka From Manual to Digital

The Evolution of Payroll Systems in Sri Lanka: From Manual to Digital

Nowadays payroll software solutions are necessary for all businesses. It enables them to avoid calculations and manual records of disbursement of employee wages. Moreover, it plays a significant role in tracking employee benefits, tax compliance, and maintaining records effectively.

Payroll management started from manual which was a time-consuming process and now businesses prefer an accounting software for it. In this blog post, we will discuss the evolution of payroll systems in Sri Lanka; from manual to digital.

The Manual Payroll System

Once the employees’ salaries were calculated manually and Sri Lankan companies would hand over to them at the fixed date. This tiring process took hours of manual calculations and keeping records wasn’t easy.

Historians believe that in the early 19th century, businesses invested an entire day to manually calculate the payroll of approximately a dozen employees. When a business grows and the number of employees increases, the need for an efficient system becomes a necessity.

Punch card system invented in the late 19th century. Employees used this method to punch their total work hours into a card. A mechanical device was used for processing it. The machine calculated employees’ work hours to maintain their attendance record. Although it was better than manual, it still demanded manual entry and calculations.

In the 20th century, computers became popular and the development of payroll software solutions started. In the 1960s, businesses used mainframe computers for payroll calculations which demanded less time and effort. However, only large corporations could access it since they were complex and expensive.

In the 1980s, personal computers and affordable accounting software solutions became popular. All kinds of businesses adopted those payroll software solutions for calculating taxes and wages, and generating paychecks. They weren’t like modern systems, but set the foundation for the digital payroll system we have today.

The Digital Payroll System

In the 21st century several advancements happened in payroll technology which increased the need for efficiency, accuracy, and compliance. Later on, payroll management systems incorporated features such as electronic tax filing, direct deposit, and automated timekeeping. Due to the invention of cloud-based payroll soft wares, businesses can access their payroll data whenever they want.

With payroll software solutions, you can automate your data entry, calculations, and tax filings which reduced the potential for errors and streamlined the process. As a result, payroll professionals can focus more on analysing data, supporting financial wellness, and ensuring compliance.

The digital payroll system in Sri Lanka improved the accuracy of payroll by enabling automated calculations and real-time data syncing. Businesses can now generate accurate paychecks, and ensure compliance with tax regulations. It is beneficial for employees and helps organisations avoid legal issues and cost penalties.

Moreover, the digital payroll system also ensures transparency by providing employees access to online portals. Employees can now check their tax documents, pay stubs, and benefits information. An accounting software enables employees to manage their financial well-being and minimises manual inquiries and the use of paperwork.


Revolutionise your payroll management by adopting AccSoft’s payroll software solutions. It will not only save you from laborious manual calculations but will also provide you with a secure, and seamless system.

Bid farewell to punch cards and hand-cracked calculators and grow your business by embracing an automated payroll system. In the era of digital transformation, you need to automate your payroll and HR systems. AccSoft is the ultimate payroll management solution for compliant, modern, and efficient businesses in Sri Lanka.