The payroll number is a set of numbers assigned to an employee as a reference for salary reports. Wages are calculated and assigned to the employee according to his or her number, which is also called an employee number or staff ID. A payroll number is usually three to eight digits long, depending on the number of employees in the department. It is usually located at the upper right or left-hand corner of the payslip. The number can also be found on time sheets, internal correspondence memorandums, and official queries and letters concerning the employee.
Providing the payroll accounting department with the payroll number will assist in receiving payment of the wages. Each number acts as a code to the cost center to determine the area to which the employee belongs. It is, in short, a method of correctly identifying employees and their corresponding salaries and areas of employment. These payroll numbers are usually issued by the human resource department of an organization upon hiring of the employee. The coded payroll number represents an employee’s identity in the organization.
In a manual payroll administration system, the name of the employee would suffice in administering the payments for the work completed. In the more modern setting, the payroll number is used in payroll management software programs. For the use of payroll management software, the number is needed as a basis for the tracking and paying of the salary to the employee.
The presence of new innovations and systems requires the use of a payroll number to allow the payroll process to move faster. Modern software uses a paycheck method wherein the employer pays the employee for the services rendered. Other companies focus on providing salary-saving schemes by crediting the salary directly into the account of the employee.
Payroll systems are associated with the history of bookkeeping and accounting and can be traced back to 4000 BC. Initially developed by Fra Luca Pacioli, a renowned mathematician and a close associate of Leonardo da Vinci, it was created as a system to track his sales with merchant ships. In 1494, he wrote a book detailing methods that are similar to that of the double entry in accounting and payroll. This is often referred to as the initial stage in the development of payroll systems. His methods are different from the present techniques, but essentially the basics are quite the same.