Every payroll system carries a running total. Tax withheld so far this year, contributions so far, how much of each annual ceiling is already used. Move that total between systems in the middle of a year and you move its errors too, and you split the year's records across two places. Start the new system on the first day of a tax year and there is nothing to carry. The IRS defines a calendar tax year as 12 consecutive months beginning January 1 and ending December 31, and in many countries the payroll year follows the calendar the same way. So we tell small teams who want to switch HR software to aim for 1 January, set up in November, and run December payroll in both systems first.
This is the checklist we recommend for a move to HourSquare.
Why 1 January is the cleanest cutover
Three things reset at the turn of a tax year. Year-to-date totals go back to zero, so no cumulative tax method or annual ceiling can be applied to the wrong base. One system owns one year, so everything for the old year sits in the old system and your accountant has one place to look. And leave usually rolls at the same time, since many teams run annual leave on the calendar year, which gives you one clean opening balance for each employee.
If your tax year does not follow the calendar, aim for its first day. GOV.UK states that the UK tax year ends on 5 April and the new one starts on 6 April, so a UK team would run March payroll side by side and start on 6 April.
The timeline, working back from 1 January
Four months is comfortable.
- October. Decide, and pull every export while you still have full access.
- November. Clean the data, set up the new system, load people, pay items and leave policies.
- December. Run December payroll in both systems from the same inputs. The old system pays people, and the new one has to match it.
- 31 December. Final run and year-end exports in the old system.
- 1 January. The new system is the system of record. Leave, timesheets and the January pay run happen there.
The December step is the one teams drop when they are short of time, and the one that catches mistakes before an employee does. The glossary entry on the parallel run in payroll explains the method.
The migration checklist
1. Export everything before you cancel anything
Access usually ends with the contract. Pull every export while the account is live. On the HRIS side, that is employee master data, contracts, salary history, managers, documents, and leave balances with the request history. On the payroll side, pay items, every payslip of the year as PDF, year-to-date totals, and the payment and accountant files you have already sent. Save each as CSV or Excel.
2. Clean the data in a spreadsheet, once
The export is the honest picture of your data, and it is rarely tidy. Remove people who left years ago, merge duplicates, and check bank details, addresses and tax identifiers against a current source. Confirm each person's manager, because approval chains will be built from that field. Do it in the spreadsheet before import, where every change is visible.
3. Rebuild the setup rather than copying it
A switch is the one moment you can fix a bad setup without a change-management project. Ask of each rule whether it reflects what you actually do, and decide the payroll cycle up front, since changing it later is expensive and unpopular.
In HourSquare, payroll runs on a pay schedule per country. Each schedule has its own tax pack, currency and tax year, and 24+ countries have a pack today. Salary and recurring allowances or deductions are recorded once per employee and carry into every run. Leave policies carry their accrual rules and approval chain, timesheets and shift patterns carry theirs, and roles decide who sees what.
4. Load the people and their opening balances
Import the cleaned list. Every employee gets a login, so check that the e-mail addresses are the ones people read. Load opening leave balances as of 1 January, after carryover, and have each manager confirm their team's numbers. Payroll opening balances are zero, because the tax year is starting. Keep old payslips in your own archive; prior years belong to the system that produced them.
Keep identifiers stable. GOV.UK warns UK employers that some payroll software will not let you keep the same employee payroll IDs, and that each affected employee must then be flagged with the Payroll ID changed indicator in the next Full Payment Submission, or the PAYE bill may be calculated incorrectly and payroll records duplicated. New hires during the switch go into the new system only, and the onboarding guide covers their first week.
5. Run December payroll in both systems
Feed the same December inputs into both. Compare each employee. Gross, each deduction, net, and employer cost. Tax and contribution lines should match exactly. Where they do not, the usual causes are a pay item mapped to the wrong tax treatment, a benefit one system taxes and the other does not, or a ceiling applied from a different base. Fix the mapping, rerun, compare again. If a payslip line is unfamiliar, gross versus net salary in the glossary covers each one. The old system's payment file goes to the bank in December.
6. Close the year in the old system
Run the final December payroll there and download the year-end exports and the accountant export for the whole year. Year-end obligations run well past 1 January. GOV.UK says UK employers must give employees a P60 by 31 May. Keep read-only access to the old system, or complete exports, until your country's deadline for annual employee statements has passed.
7. Tell the team before the first January payday
People do not care which HR system you use until the day their payslip is somewhere new. Send one message in the last week of December. Where to log in, where payslips appear, where to request leave and submit hours, and the date of the first January payday.
What to ask the new vendor before you commit
Is there a setup fee or a minimum term? Personio's pricing page, for example, listed a one-time setup fee and a 12-month minimum term on yearly plans when we last checked it (seen 5 October 2026). Can you get your data out again as CSV or Excel without asking anyone? Is payroll included or an add-on? Who does the import?
For HourSquare the answers are on the pricing page. It is free for now, payroll included, with no card to sign up and no sales call needed. Reports and payroll files export as CSV or Excel, and there is a public API with company API keys. Setup is self-serve, and we will do it with you if you ask, including the December run side by side with your current system.
Questions
Can we switch HR software in the middle of the tax year?
Yes. It costs more work, because you carry year-to-date figures for each employee into the new system and reconcile them, and the year's records end up split across two systems. If the current system is failing, switch now. If it is merely annoying, wait for the first day of your tax year.
How long should the parallel run be?
One full pay period is the minimum. For a monthly payroll that means the whole of December. If you pay weekly or bi-weekly, run the last two or three periods in both systems. Stop when a complete period matches for every employee and each remaining difference has been explained and fixed.
What if our tax year is not the calendar year?
Plan the same checklist around the first day of your tax year. A UK employer would set up in February, run March payroll side by side, close the old year, and start on 6 April, since GOV.UK gives 5 April as the end of the tax year. Only the dates move.
Do we need to move old payslips into the new system?
No. Prior years belong to the system that produced them. Export every payslip as PDF along with the accountant export for each closed year, and keep them in your own archive where your accountant and employees can reach them. The new system starts with a clean year and nothing to reconcile.
Who pays employees in December while both systems run?
The old system. It stays the system of record until 31 December, and its payment file is the one that goes to the bank. The new system runs the same period from the same inputs so you can compare every line. In January the new system's file goes to the bank.
If you want January as your start date, begin this month. Export in October, set up in November, and let us run December with you against your current system. December side by side, free setup. Free for now, payroll included.