What is Payroll?
Payroll is the compensation a business must pay to its employees for a set period or on a given date. It is usually managed by the accounting or human resources department of a company. Payroll is a major expense for most businesses and is almost always deductible, meaning the expense can be deducted from gross income lowering the company's taxable income. Payroll can differ from one pay period to another because of overtime, sick pay, and other variables.
Advantages of Using Payroll Services
One major benefit of payroll services is their ability to produce a variety of reports that simplify accounting procedures and help companies ensure they are in compliance with legal and tax filing requirements. The payroll service may also maintain a record of how much vacation or personal time employees have used.
Disadvantages of Using Payroll Services
When companies outsource their payroll system, they must rely on individuals outside the business for accurate accounting. In the event of an error, the company's on-site personnel must deal with upset employees. Companies might also face tax penalties for errors made by the payroll service. Those would drawbacks for payroll services.
Techniques for Payroll Services
The payroll process requires employers to keep careful documentation of the hours worked by their personnel and to compensate them for services rendered. This can be one of the most demanding, time-consuming tasks a business faces. It also requires employers to adhere to all current local, state and federal mandates regarding payroll taxes, benefits and worker's compensation. There are four main ways employees can be paid (cash, check, direct deposit or debit card). Employers can do the payroll themselves or contract it out to accountants or payroll-service companies.
Payroll Software Programs
Payroll software automates every step in the payroll process for small to large businesses. It helps you manage payment for your employees by making it easy to set up direct deposits, withhold payroll taxes, and keep accurate records so you don’t get fined. All of these processes can be time-consuming when done manually, and it’s easy to make a mistake. Here are a few payroll software programs that different businesses use: Gusto, Paychex Flex, QuickBooks Payroll, Workful, OnPay, ADP, Payroll4Free, and Rippling.
HTH & Accounting Associates help organizations and business owners with accounting and/or financial consulting services.
For Help with accounting cycle or Bookkeeping contact us at accounting@thaddeus.org or call us at 909-599-2111
Resources:
https://smallbusiness.chron.com/techniques-payroll-services-18470.html
https://www.investopedia.com/best-payroll-software-5088638
Thank you for reading.
The writer of this blog is Jory Mirtil. He works at Thaddeus as an Accounting Intern. He chose Thaddeus because of the work environment and the mission it stands for. He is someone who aspires to be an Accountant one day. His career path journey will involve a ton of work experience and education in accounting in order to reach his dream to become a CPA.
