Payroll System

Only available on StudyMode
  • Download(s) : 16
  • Published : February 12, 2013
Open Document
Text Preview
Introduction
An employer uses a payroll system to process its payroll. Consequently, payroll cannot be processed without a payroll system. A payroll system allows the employer to pay employees on time and accurately, plus comply with other statutory regulations. Employers with non-exempt workers, those not exempt from overtime pay, therefore must keep a record of hours worked for each employee. Any timekeeping system is fine, but it should be accurate, complete and compatible with the payroll system being used. With a manual system, for example, the employer can use a standard punch clock or have employee’s complete weekly time sheets. With an in-house computerized system, the employer can use a computerized time clock or time clock software, which imports the time into payroll software. With an external system, the employer sends the payroll hours to the payroll service provider to pay on the upcoming pay date.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.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...
tracking img