Workday Payroll Integration in Asia: A Comprehensive Guide

Are you a Workday user looking to process payroll in Asia? Since Workday payroll primarily offers services in the US, UK, Canada, and France, this means that users in other locations are required to integrate Workday with a payroll services company or local payroll software. So, how does it work? We will walk you through:

  • the options of integrating Asia payroll with Workday
  • how Workday payroll integration works
  • the benefits of outsourcing payroll
  • what to look for when choosing a payroll & Workday integration service provider in Asia.

How Does Workday Work?

Workday HCM centralises all of your HR functionality in one system by pulling information from other specialist HR software and vendors. By combining different specialised HR software, it is recognised as a more flexible and effective way to meet the different HR challenges businesses face.

Why Should You Integrate Asia Payroll with Workday?

  • Efficiency & Controls: Integrating HCM and payroll systems eliminates the need for duplicate data entry and manual transfer of information reducing the risk of errors or fraud.
  • Data Accuracy: With integration, employee information such as hours worked, leave balances, benefits, and tax withholdings are automatically synchronised between the HCM and payroll systems, ensuring accuracy.
  • Compliance: An integrated system ensures compliance with employment laws, tax regulations, and reporting requirements, as data is consistently transferred through the payroll process.  For example, if you need to pay employees within 7 days of termination, an HCM integration ensures payroll teams are aware of terminations in real time rather than waiting for cutoff date.
  • Reporting and Analytics: The combined data from both systems allows for better reporting and data analysis, enabling HR and finance departments to make more informed decisions and quicker.
  • Improved use of HCM: One big side benefit is that everyone will start using the HCM properly if their pay is dependent on the HCM being accurately updated.

Options of Integrating Asia Payroll with Workday

Workday users usually choose one of the following two options when integrating with Asia payroll:

  1. Use a Payroll Outsourcing Services Company; or
  2. Buy a Local Payroll Systems and Building Workday Integrations In-House

Workday implementation consultants regularly recommend using a payroll services company or a Workday integration services provider due to the specialist technical knowledge needed to build a payroll integration in-house. Mistakes in payroll for multinational companies can be challenging and costly. In addition to the usual benefits of outsourcing payroll, businesses will also be able to leverage their existing experience building Workday integrations and covering multiple countries with one payroll system.

How Do Payroll Providers Integrate with Workday?

Workday markets their payroll integration as Cloud Connect for TPP (Third Party Payroll) and encourages clients to develop a payroll integration that matches their Workday environment using Workday tools – with the goal of ensuring a simpler integration. Clients using Workday will typically use one of the following options for integrating Workday with their Asia payroll:

1. Point-to-Point Integration

Point-to-point integration is a fully automated integration where information flows from Workday into the payroll company’s system via a ‘Payroll Effective Change Interface’ file (PECI file). This means whenever a Workday user makes a change in Workday that will impact a payroll calculation (e.g., a salary increment, termination), this information will be sent from Workday in the PECI file to the payroll company’s payroll system when they calculate payroll.

Benefits:

  • Efficient: Payroll processing is automated, and staff no longer need to provide monthly payroll variance information to the payroll services company in a specific format each month
  • Accurate: Information comes directly from a single source of truth meaning more accurate payroll without human error, a faster payroll process means that payroll processing is based on close to live data

Under this option, the payroll services company will assist the client to build the PECI file to contain the correct data and maps the data in the PECI file to the payroll services company’s systems. Alternatively, the client’s Workday implementation consultant can build the integration based on a payroll company’s specifications, and the payroll company will test the integration.

2. Manual Import of PECI File

If you don’t have a large enough headcount to justify building a point-to-point integration, the alternative is to generate a Workday PECI file to the payroll service provider who then manually imports the data from the PECI spreadsheet into their payroll system.

Benefits:

  • Cost-Effective: This payroll integration option is cheaper than developing a point-to-point integration in the short term. However, payroll services companies usually charge an extra service fee each month for the work involved with manual manipulation and import of information, making it more expensive in the long-term. This method will also not offer the same efficiencies and accuracy benefits of the point-to-point integration.

What Is the Cost of Building a Point to Point Integration with Workday?

The cost of building an integration depends on several factors, including the quantity of data being transferred (e.g., payment codes, number of employees), the number of countries, and whether you need information to flow back into Workday (e.g., GL file and pay history). A good payroll services company should be able to build an integration for one country in one to three months, depending on the complexity.

How Many Employee Headcounts Is Enough to Justify Performing a Payroll Integration?

Generally and unless there are special circumstances, it is recommended to only look at creating an automated integration if there is at least a 300 person headcount in the relevant country.

Choosing the Right Payroll & Workday Integration Services Provider in Asia

When selecting a payroll processing provider in Asia, it’s important to do your homework and ensure your payroll processing provider is future-proof. Outside of your usual due diligence questions, payroll specific questions you should ask include:

  • Workday Integration Services – Can the payroll provider integrate with Workday? How long does it take them to complete a Workday integration?
  • Regional Footprint – What is the payroll outsourcing provider’s regional footprint? Are they able to support you in most of the countries in which you have employees?
  • In-Country Support – Does the payroll outsourcing provider’s support sit in-country?  Or is the support going to be offshored to cheaper locations, e.g. India or the Philippines?
  • Data Hosting and Security – Where will the payroll data be hosted?  How secure is the data? Is it GDPR compliant? Does the provider have the security accreditation, e.g. ISO27001?

Integrating payroll in Asia with Workday is a complex process that requires specialised technical knowledge. Workday implementation consultants usually recommend using a payroll services company or a Workday integration services provider to ensure a simpler integration build. Businesses can leverage their existing experience building Workday integrations and cover multiple countries with one payroll system. Payroll outsourcing providers in Asia vary in their regional footprint, in-country support, and data hosting and security. It’s important to do your homework and ensure your payroll processing provider is future-proof. 

Get in touch with us and learn more about our experience with Workday payroll integration in Asia!