What is Payroll?

Firstly, it is an essential part of every business. It is used by employers to pay their employee’s wages accurately and on time. Furthermore, alongside with paying an employee’s wages, there are a few administrative duties the payroll department must comply with.

Moreover, it helps to improve an employee’s experience at work. Therefore, employees tend to be more dedicated and motivated to their work if their wages are accurately paid.

Payroll and Human Resources

Furthermore, numerous duties are linked to Human Resources department. Therefore, both departments should liaise with each other when required to create a better understanding of their work duties.

Shared function between payroll and HR include:

• Recruitment

• Salary increase

• Bonus payments

• Benefit deductions

• Holiday leave

• Firing employees

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Wages

In addition to this, after processing staff time into the payroll system according to their contract, there may be slight adjustments that need to be made. These include:

• Deductions for overpayment from previous wages

• Additions to wages for bonuses or overtime

Deductions

Deductions are a significant part of functions of payroll. Ensuring the right deductions on wages are made is a legal requirement. Failure to do so will result in severe consequences. Deductions include:

• Income tax

• National insurance

• Student loans

• Voluntary amounts, such as union dues

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Record keeping

Under legal requirement, there must have a record keeping system in place. This includes reporting taxes and declaration of work to ATO