Payroll Management

Payroll is defined as a method of administrating employees’ salaries in the

organizations. 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. The process consists of
calculation of salaries and tax deductions of the employees, administrating the
retirement benefits and disbursements of salaries to employees. It can also be
called as an accounts activity, which undertakes the salary administration of
employees in the organization. It identifies risks such as entering incorrect
employee information into the system and making unauthorized adjustments to
employee hours.

Administrating the employees’ salaries is not an easy task, the HR and accounts
department work together to calculate and disburse the salary to the employees.
Thus, payroll management can be further subdivided into two sub processes, i.e.
Payroll accounting and payroll administration

PAYROLL MANAGEMENT

PAYROLL PAYROLL
ACCOUNTING ADMINISTRATION

PAYROLL ACCOUNTING:

Payroll accounting involves calculations of employees’ salaries and tax

deductions. It also undertakes the activities such as preparation of tax
returns, maintaining the payroll records, etc. Payroll accounting includes
reporting of payroll, fringe benefits, and the payroll-related accounts of a typical
company on its income statement and balance sheet. Payroll and benefits include
items such as:
• salaries
• wages
• bonuses & commissions to employees
• overtime pay
• payroll taxes and costs
 ○ Social Security
○ Medicare
○ federal income tax
○ state income tax
○ state unemployment tax
○ federal unemployment tax
○ worker compensation insurance

• employer paid benefits

○ holidays
○ vacations
○ sick days
○ insurance (health, dental, vision, life, disability)
○ retirement plans
○ profit-sharing plans
Many of these items are subject to state and federal laws; some involve labor
contracts or company policies.
PAYROLL ADMINISTRATION:
Payroll administration encompasses all the tasks involved in paying an
organization’s employees. It typically involves keeping track of hours worked
and ensuring that employees receive the appropriate amount of pay. It also
includes calculating taxes and social security as well as ensuring that they
are properly withheld and processed. Depending on the company in
question, a full range of other deductions may be calculated, withheld, and
processed as part of payroll administration. Additionally, the processing of
contractor payments may fall under the umbrella of payroll administration.
Handling payroll-related problems are part of payroll administration as well.
If an employee is paid an incorrect amount or a direct deposit fails to go
through, both things are payroll administration issues. Likewise tax filing and
deduction errors are payroll administration matters as well.
Payroll administration is an important task which most companies and
business establishments find it difficult to cope with. To efficiently perform
this task, it requires tedious paper work, records maintenance, salary and
loan administration, providing up-to-date information to employees,
superannuation, tax compliance, deductions, reimbursements, and so on.

PAYROLL DEPARTMENT FUNCTIONS:

I. Basic Functions of the Payroll Department

1. Time Records

2. New Hires

3. Errors and Corrections

4. Tax Deposits and Reporting

5. Garnishments

II. Staffing the Payroll Department

7. Creating a First Rate Payroll Department,

8. Managing the Staff,

9. Staff Motivation and Morale,

10. Working with Human Resources and other Departments

III. Management Issues

11. Customer Service,

12. Fraud,

13. Dealing with the Internal Revenue Service,

14. Handling Department of Labor Audits,

15. Compliance Issues,

16. Research Needs

IV. Benefits and the Payroll Department

17. Should Payroll Handle the Company's Benefits

18. Year End and Year Beginning Issues

V. Payroll Systems

19. Objectives of a Computerized Payroll System,

20. Interfacing and Integration,

21. Selecting a Computerize Payroll System,

22. Controls and Security for the Payroll System,

23. Disaster Recover a Must,

24. Time and Attendance Systems,

25. Employee Self Service Systems

VI. Paying Employees

26. Paper Checks are Still an Option,

27. Direct Deposit,

28. Paycards

VII. Year End

29. Start Year End Off With a Memo,

30. Year End Teams,

31. Check Lists,

32. Reconciliation of Payroll at Year End,

VIII. Payroll and the New Year

34. Setting Up the Payroll System for the New Year,

35. Setting Up the Payroll Department for the New Year

IMPORTANCE OF PAYROLL DEPARTMENT:

1. It help to streamline one business and make the accounting employees and
secretaries free from the payroll work so that they can focus on running the
business efficiently rather than spending all of their time on payroll concerns.

2. It is beneficial for both employer and the employees.

3. They are highly aware of the legal tax laws; it saves the employee from any
legal errors.
4. It is also beneficial to the employer as it saves the time of the employer that
would have been wasted in boring calculations and gives the chance to employer
to focus on core business activity.
5. Many companies offer human resources software for their clients, through
which an employee can easily track his detail such as vacation time, insurance
 packages, and other benefits through the payroll service, without needing to
take up the time of the business owner.
6. This also helps in efficiently running the business and thus bringing in more
profit.
7. It saves good amount of time and hassles that arouse in the processing.
8. It gives the chance to employer to focus on his core business and not on other
issues that could be solved by the outsourced company.
9. It provide the organization with reports for the management to consider, such
as the hours of vacation time each employee has left, overtime worked, and
actual clock hours worked.
10. Provides Flexibility :
We are available however you wish to reach us; telephone, email, fax,
internet, or in person.

11. Provides a Smooth Transition from what you are doing now. Switching to
Payroll Advantage is easier than you might think. We pay close personal attention
that prevents bumps and hiccups.

12. Provides On-Going Support . Change is inevitable. We adapt to and assist with
your needs with our Payroll Guidance services.

13. Manage all employee payroll deductions

14.Optional workers’ compensation premium calculation and payments

15.Online Payroll Advantage employee enrollment.
16. Accurate and on time check delivery .
17. Reduce your labor costs and focus resources on key business needs.
18. Stop wondering if all tax filing, remittance, and W2s are completed and
submitted on time.
19. Avoid frustrating technology problems by using web-based payroll entry.
20. Payroll Advantage offerred through our alliance with a number of key payroll
providers.
21. Simplified data entry saves time and helps reduce errors. Automated payroll
can make employee record setup easier and faster with templates that can
be modified for each individual. For instance, with Microsoft Dynamics GP,
templates make it simpler for your human resources professionals to enter data
once for multiple payroll tasks, which saves time and reduces errors.
22. Processing pay runs is a snap compared to manual systems.

Streamline the process of recording, collecting, reviewing, and approving timesheet

data with online self-service options delivered through a personalized Web portal.
Automated payroll processing helps eliminate many routine transactions, freeing
staff to focus on higher priority
23. Employee self-help tools help enhance productivity across the board.

Online self-service options enable employees to quickly and easily update their own
personal information, enroll in direct deposit, view vacation time, and submit
timesheets. This saves them the time of having to contact staff with requests and
details. The system updates requests automatically upon approval, saving time for
payroll and other human resources staff.
24. All payroll information is in one place and accessible at your fingertips.

Increase your flexibility and gain more control over your payroll information,
keeping track of it easily and maintaining a comprehensive, up-to-date perspective
on your payroll expenses.
25. Taxes are less taxing.

Payroll tax updates available from software providers like Microsoft Dynamics
ensure tax tables are current. Automatic tax table downloads for those with online
access help avoid the hassle of ordering and installing updates. Taxes, deductions,
and benefits are calculated automatically. You can also manage variable tax
deductions for employees working in multiple states.
26. Government reporting and requirements can be delivered easier and on time.

Payroll accounting calculates the payment of work done by an employee. Payroll

functions include the following:

• Compute employees gross salary

• Make necessary deductions
• Calculate Net salary
• Generate Checks or direct deposits.