Payroll

Payroll

[pey-rohl]
In a company, payroll is the sum of all financial records of salaries, wages, bonuses and deductions.

Paycheck

A paycheck, or pay-cheque in English, is traditionally a paper document issued by an employer to pay an employee for services rendered. While most commonly used in the United States, recently the physical paycheck has been increasingly replaced by electronic direct deposit to bank accounts.

In most countries with a developed wire transfer system, using a physical check for paying wages and salaries has been uncommon for the past several decades. However, vocabulary referring to the figurative "paycheck" does exist in some languages, like German (Gehaltsscheck), partially due to the influence of US popular media but this commonly refers to a payslip or stub rather than an actual check.

Payroll taxes

As an employer, there are payroll responsibilities required by government agencies. These agencies include federal, state and/or local. Some of the responsibilities include withholding amounts from your employees' compensation to cover income tax, social security, and Medicare.

Payroll taxes are levied by a government agency on employees' wages, tips, and other compensation. The amounts withheld by employers from employees' pay for federal income, social security, and Medicare taxes are considered as trust fund taxes. They are referred to as such because the money is held in a special trust fund for the U.S. government. Amounts withheld for state and local income taxes are held in trust for the state or local government.

Pay slip

A pay stub, paystub, pay slip, pay advice, or sometimes paycheck stub, is a document an employee receives either as a notice that the direct deposit transaction has gone through, or as part of their paycheck. It will typically detail the gross income and all taxes and any other deductions such as retirement plan contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay, also including the year to date totals in some circumstances.

Payroll card

A payroll card is a plastic card allowing an employee to access their pay by using a debit card. A payroll card can be more convenient than using a check casher, because it can be used at participating automatic teller machines to withdraw cash, or in retail environments to make purchases. Some payroll cards are cheaper than payday loans available from retail check cashing stores, but others are not. Most payroll cards will charge a fee if used at an ATM more than once per pay period.

The payroll card account usually is held as a single account in the employer's name. That account holds the payroll funds for all employees using the payroll card system. Some payroll card programs establish a separate account for each employee, but others do not.

Payroll Frequencies

Companies typically generate their payrolls on regular intervals, for the benefit of regular income to their employees. The regularity of the intervals, though, varies from company to company, and sometimes between job grades within a given company. Common payroll frequencies include: daily, weekly, bi-weekly (once every two weeks), semi-monthly (twice per month), and to somewhat of a lesser extent, monthly. Less common payroll frequencies include: 4-weekly (13 times per year), bi-monthly (once every two months), quarterly (once every 13 weeks), semi-annually (twice per year), and annually.

Payroll Professionals

In Canada Payroll Professionals are Certified by the Canadian Payroll Association. They are qualified as either 'Payroll Compliance Practitioners (PCP)' or as 'Certified Payroll Managers(CPM)'.

In the United States Payroll Professionals are Certified by the American Payroll Association. They are designated as Fundamental Payroll Consultant (FPC) or Certified Payroll Professional (CPP) after passing the appropriate certification exam.

Upon completion of the required course material and with continuing education and membership fees the person is then entitled to the post-nominal letters associated with their current level of accomplishment.

In the United Kingdom, payroll professionals are represented by the Institute of Payroll Professionals.

Warrants

Payroll warrants look like checks and clear through the banking system like checks, but are not drawn against cleared funds in a deposit account. Instead they are drawn against "available funds" that are not in the bank so the issuer can collect interest on the float. In the US, warrants are issued by government entities such as the military and state and county governments. Warrants are issued for payroll to individuals and for accounts payable to vendors. Technically a warrant is not payable on demand and may not be negotiable. Glossary of Accounting Terms Deposited warrants are routed to a collecting bank which processes them as collection items like maturing treasury bills and presents the warrants to the government entity's Treasury Department for payment each business day.

In the UK, warrants are issued as payment by the NS&I when a Premium Bond is chosen.

Payroll Outsourcing

Businesses may decide to outsource their payroll functions to an outsourcing service like a payroll bureau or a fully managed payroll service. These can normally reduce the costs involved in having payroll trained employees in-house as well as the costs of systems and software needed to process payroll. In the UK, payroll bureaux will deal with all HM Revenue & Customs enquiries and deal with employee's queries. Payroll bureaux also produce reports for the businesses' account department and payslips for the employees and can also make the payments to the employees if required.

Another reason many businesses outsource is because of the ever increasing complexity of payroll legislation. Annual changes in tax codes, PAYE and National Insurance bands as well as more and more statutory payments and deductions having to go through the payroll often mean there is a lot to keep abreast of in order to maintain compliance with the current legislation.

  • Anchor Tag Free articles on UK Payroll Budget changes.

See also

References

  1. Institute of Payroll Professionals official website
  2. Glossary of Accounting Terms

Search another word or see payrollon Dictionary | Thesaurus |Spanish
Copyright © 2014 Dictionary.com, LLC. All rights reserved.
  • Please Login or Sign Up to use the Recent Searches feature
FAVORITES
RECENT

;