In basic terms, Payroll can be described as a list of a company’s employees and their pay; but in actuality, it is so much more than that. It can include salaries, wages, deductions, bonuses, and more. Payroll processing includes the employer paying their employees for the work that they have done. Without managing a company payroll, businesses would not know who to pay, how much they should be paid, and the amount owed to the government in taxes.
Although it can be explained in simple terms; in practice, payroll is not as simple as “the money a company pays employees for doing their jobs over a certain period of time”. It is important that payroll is managed in a timely, accurate manner by competent and trustworthy individuals. One important aspect of payroll processing is to ensure that all the employees are paid correctly and that the government receives the proper amount of tax revenue.
Most employees receive a paycheck every so often; weekly, bi-monthly, monthly, etc. It is also an option for their money to be automatically deposited into their bank account, this is known as direct deposit. Many employees opt for direct deposit, which makes the payrolling process easier for the employer or payroll company preparing company payroll.
When you are hired for a job, you must fill out a W-4 form. This is the form that the government will base their income tax requirements from. Your marital status, number of dependants, and other deductions can reduce the amount you owe. At the same time, as with all tax forms, it is important to be truthful on the W-4 form.
The government takes out a number of taxes from virtually every employee in the country. These taxes include Medicare, Social Security, Federal Income Tax, State Income Tax, and more. In general, an employer is required to remove these payroll taxes from their employees’ checks, a process also known as “withholding”. The employer must then distribute these funds to the correct government agencies. The employer is also responsible for paying their share of payroll taxes, or FICA taxes.
For many companies payroll can be a hassle and, because of the complexity involved, might not always be done correctly. In these situations, many businesses use Payroll Outsourcing, which is where professional payroll companies such as The Payroll Specialists manage all or part of the business’ payroll. By hiring a competent payroll service you can take comfort in having an experienced third party handle their payrolling.
The payroll company and its client will figure out a plan that best fits the particular business, taking into account details pertaining to their workforce, amount of tax withholding required, budget, and more. Once the arrangement is set up, the payroll company will then handle payroll responsibilities, which may include payroll taxes, paycheck printing, calculating withholdings, direct deposit, and much more.
By using a payrolling program like this, the employer and his/her business can enjoy a variety of benefits. These include saving time and money, avoiding payroll mistakes that can cost them fines, avoiding lost productivity, reduction of payroll anxiety, increased security, and more. In many cases, outsourcing payroll is more affordable than hiring someone into your company to manage it.
When it is managed correctly, company payroll can function smoothly without any problems or much effort. When it is managed improperly, the risk of incurring issues with payroll will increase. Whether they hire a professional payroll company or do it themselves, payroll is and will remain an important part of any business’ operation.