Payroll

Definition

Payroll is the record of wages, salaries, and fringe benefits paid by an employer to its employees.

Purpose

Payroll management ensures that employees are paid accurately and on time, complying with tax laws and employment regulations. It also involves tracking employee earnings, deductions, and net pay.

Examples of Use

• Employee Compensation: Recording and disbursing wages and salaries to employees.
• Tax Compliance: Withholding and remitting payroll taxes to government authorities.
• Benefits Administration: Managing deductions for benefits such as health insurance, retirement plans, and other employee benefits.

Related Terms

• Wages: Compensation paid to employees for their labor, typically on an hourly basis.
• Salaries: Fixed regular payments made to employees, usually on a monthly or bi-weekly basis.
• Deductions: Amounts subtracted from an employee's gross pay for taxes, benefits, and other obligations.

Notes

• Accuracy: Accurate payroll processing is crucial to avoid legal issues and ensure employee satisfaction.
• Software: Payroll software can automate calculations and record-keeping, reducing errors and saving time.