Payroll

A payroll is a company's list of its employees, but the term is commonly used to refer to: A payroll is a company's list of its employees, but the term is commonly used to refer to: In the sense of treasury management, payroll plays a major role in a company for several reasons. From an accounting perspective, payroll and payroll taxes are subject to laws and regulations and can considerably affect the net income of most companies. For example, payroll in the United States is subject to federal, state, and local regulations. From a human resources viewpoint, employees are sensitive to payroll errors and irregularities, such as late paychecks. As such, maintaining good employee morale requires payroll to be paid timely and accurately. The primary mission of the payroll department is to ensure that all employees are paid accurately and timely with the correct withholdings and deductions, and that the withholdings and deductions are remitted in a timely manner. This includes salary payments, tax withholdings, and deductions from paychecks. Government agencies at various levels require employers to withhold income taxes from employees' wages. In the United States, 'payroll taxes' are separate from income taxes, although they are levied on employers in proportion to salary; the programs they fund include Social Security and Medicare. U.S. income and payroll taxes collected through deductions are considered to be trust fund taxes, because the employer holds the deducted money in trust for later remittance. Net Pay is critical in the consideration of payroll taxes. An employee's gross pay (pay rate times number of hours worked, including any overtime) minus payroll tax deductions, minus voluntary payroll deductions, is equal to Net Pay. Payroll tax deductions play a critical role and because they are provided by law they are known as statutory payroll tax deductions.