What is Payroll?

Michael Pollick
Michael Pollick

The term "payroll" encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. All of these different payment methods are calculated by a payroll specialist and the appropriate paychecks are issued. Companies often use objective measuring tools such as timecards or timesheets completed by supervisors to determine the total amount of compensation due each pay period.

Payroll refers to every employee of a company who receives regular wages or compensation.
Payroll refers to every employee of a company who receives regular wages or compensation.

After a payroll accountant multiplies an employee's hours by his or her pay rate, the gross income amount is entered into a calculator or computer program. Regular deductions such as tax withholdings, medical insurance, union dues, charitable contributions and so on are then categorized and subtracted. The remaining balance is then converted to a check or electronic deposit and becomes the employee's net pay for that time period. In the US, payroll departments also identify the employer and employees by a federal code and keep a running tally on total income and deductions for the fiscal year.

Staying organized is the best tip when dealing with pay periods that have different intervals with a set number of days.
Staying organized is the best tip when dealing with pay periods that have different intervals with a set number of days.

For small business owners, keeping enough cash to pay all employees is often one of their highest priorities. Even if the business itself hasn't become profitable, employees must still be compensated for their services. This is why many smaller companies prefer to keep their payroll obligations as low as possible until they've reached a certain level of profitability. It's not unusual for small business owners to forgo their own salaries in order pay their employees.

Setting up an effective payroll system is not especially difficult for trained accountants, but it can be very time consuming. Some smaller businesses rely on user-friendly computer software to set up a simple system complete with check printers and file storage. Larger companies may assign trained accountants to handle pay issues as part of their overall duties. Businesses without the means to maintain their own systems often choose to farm out this task to outside specialists.

Since payroll records are based on objective criteria such as timecards and federal tax forms, outside accountants can perform all of the calculations, store all of the year-to-date data, and issue pay in a timely fashion. Employers simply need to update these companies with any changes in employee pay rates or deductions.

Payment methods are calculated by a payroll specialist and the appropriate paychecks are issued.
Payment methods are calculated by a payroll specialist and the appropriate paychecks are issued.
Michael Pollick
Michael Pollick

A regular wiseGEEK contributor, Michael enjoys doing research in order to satisfy his wide-ranging curiosity about a variety of arcane topics. Before becoming a professional writer, Michael worked as an English tutor, poet, voice-over artist, and DJ.

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Discussion Comments

anon341714

What is offline payroll? I need the definition and its structure.

anon297167

Can anyone recommend the best payroll software for use in Singapore?

anon212153

This is Tanyi and I am preparing for HND in Accounting and have been asked to prepare a report on payroll. So I need some information regarding this payroll, like what does payroll actually mean, what does it contain and how to prepare a report. How should the questionnaire be prepared, etc.? Please, I need your help.

anon198495

i need a payroll accounting project.

anon179612

I am looking for a real payroll system that can exist in a bank. --ciamar

anon159689

can you give me at least three specific problem in a payroll system? and what are the advantages and disadvantages of swipe cards? thanks

anon144377

A payroll is just a title. It's amazing how people are obtaining degrees and don't even have common sense. This article has more than enough information for people of understanding.

This is my third semester in my final year of my associate degree, majoring in international business management. If you have jobs, I'm doing my best to take you out of that chair. I'm taking your job! Thank you for not letting me get intimidated now when I get to the work force.

anon143866

Can you please provide information on different types of payroll systems and also recommend a system to use and why do you think i should use that particular payroll system? Thanks in advance, Anna.

naresh

what is payroll, how can we calculate and tell me the process.

anon123366

The company I use to work for started out really small. Each week they'd hand us personal checks at the end of each week instead of payroll checks. But since then things have taken off and we now have direct deposit.

anon123149

This is janardhan. can i have complete information of payroll system and how it works?

anon122481

This is joya. I am a computer science and engineering student 4th semester from national university of Bangladesh. Can you give me solution of this question elaborately? What is payroll? What is the advantage of this system? can you give me some examples of this system? Thanks.

anon115432

I'm a business management technology student. And we are assigned to make a project proposal about payroll systems and it's hard for me to figure it out. Will you help me?

anon106702

I have to do some work for my thesis. i need some information about a payroll system. Our thesis is about to code a program of the payroll system of the LBC company. In your own understanding what is a payroll system?

jiege

I'm jiege and I'm a bsit student. i have a project about payroll. can you give some information or ideas on how to do it?. Thanks. I'm waiting for your help.

anon103814

I'm a business management technology student. Can you teach me how to make a payroll system?

anon101403

I'm jherwin, and it student. It's so hard to do a thesis, especially on a payroll topic. Please help me.

anon97277

I'm Jane, a BA student. i wish to write a project on how a payroll system works. would you please give me the necessary guidelines to it. thank you.

anon91002

this is prasanta. I am working for a small company. i just want to know the payroll system.

anon85836

Please tell me how payroll works as an hr function.

anon83921

I am jaswanth, pursuing my mba. can you provide for me the complete illustration about payroll system?

anon83407

its me ashwini. I am studying master of business information and technology final year in my university. i need to do a project on payroll so may i get the payroll project?

anon80052

can you give some examples in doing payroll system?

anon77320

this is pavani studying mba fourth semester. i need a project related to hr(payroll). Please would you provide me? its a peak position for me. Please help me.

anon75890

i need a project on pay roll system.

anon70118

Can you please give the review of related literature about payroll? and specific problem of payroll using manual? Thanks a lot and more power.

anon69931

can you give me an ER diagram of the payroll system?

anon66661

I need a project on payroll.

anon65628

what does payroll mean? does every company have to maintain this payroll expert?

anon63881

please can you give me a thesis of a payroll system? i am in my second year in computer programming and i hope you will help me.

thanks and god bless.

anon61016

could you give me a basic table of a payroll system? and space it correctly so that i could understand. Thanks! bunz.

anon59759

i'm a computer science student. can you teach me how to make a payroll system and give some examples? Thanks.

anon59059

how do I make a thesis in payroll system? --anne

anon54388

I work as a lecturer in college. i just want to know what is actual pay roll, and whether employees get the salaries on bench or not.

anon49864

please, i need your help on my project topic, "Developing a web base for a payroll of a company using a basic program."

anon48334

can you give some example in doing payroll system?

anon48045

what is a payroll system and a company payroll.

anon45453

This is Santosh. I'm pursuing my MBA 2nd semester from matrusri pg college Hyderabad. My specialisation is in human resources. As i need to do a project to gain practical knowledge, I chose my topic as payrolls. so i need some information regarding this payroll i.e., what does payroll actually mean, what does it contain and how to prepare the report, how should the questionnaire be prepared etc. so please help me regarding my project. waiting for your reply.

anon43702

I want to write a field report on payroll so I am asking for your assistance on introducing it.

medishetty

Hi this is anil. i am working as an hr recruiter. i am interested in pay. can anybody suggest how to handle pay roll process?

anon38877

hi. this is shivaraj. I am working for a small company. i just want to know the payroll system.

anon24901

How can a payroll be motivational?

anon19672

how to make an introduction of a payroll system?

anon19659

So payroll and accounting & human resources are supposed to work together? I'm twisted...I'm doing research for school.

anon19565

what is payroll system and how it works?

anon14455

What is a payroll system?

anon13415

This is Santosh. I'm pursuing my MBA 2nd semester from matrusri pg college Hyderabad. My specialisation is in human resources. As i need to do a project to gain practical knowledge, I chose my topic as payrolls. so i need some information regarding this payroll i.e., what does payroll actually mean, what does it contains and how to prepare the report how should the questionnaire prepared etc. so please help me regarding my project. waiting for your reply...........

nobreather

even though a small business owner can figure out how to do payroll on their own, i think using a payroll service is a worthwhile idea.

in our state, there is lots of paperwork that needs to be filled out at different times of the year, and the small monthly fee that payroll services charge seems worthwhile.

outsourcing this sort of task allows you to focus on your business instead of focusing on things outside of your expertise.

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