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An Introduction to Payroll Systems
By Natalie Grace, eHow Contributor
An employer uses a payroll system to process its payroll. Consequently, payroll cannot be process without a payroll system. A payroll system allows the employer to pay employees on time and accurately, plus comply with other statutory regulations. Types

* A payroll system can be manual, in-house computerized or outsourced, external. With a manual system the employer processes its entire payroll by hand, including wages, deductions and tax calculations. To reduce the risk of errors, the employer should use this method only if it has few employees. An in-house computerized system means that the employer buys payroll software and uses it to process its payroll on site; the software calculates wages, deductions and taxes based on inputted data. An outsourced system the employer hires an off-site payroll service provider to process its payroll. Timekeeping

* 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 employees 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. Implementation

* A manual payroll system is quite inexpensive. The employer can buy standard time sheets -- or a punch clock -- and blank checks with the check stub attached from an office supply store. If the employer does not have to give employees a check stub, it can use its bank checks. It can hand write the paychecks or print them on a typewriter with an erase feature. If the...
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