What steps are involved in doing payroll?
Typically a payroll job includes keeping appropriate information on all employees (social security numbers, pay rates, number of dependents, etc.) and combining this information with the hours worked (if paid by the hour) or salary rates less deductions/withholding to generate paychecks or direct deposits. It could also include paying commission based compensation and bonuses and any other types of taxable compensation, as well as processing and complying with court-ordered wage garnishment orders. Most companies utilize computer software or outside service providers (e.g., ADP or Ceridian) to automate the process, since it involves tax rate information that is ever changing and complex. Often payroll information also interfaces with other Human Resource data, like benefits, to incorporate other employee voluntary deductions like medical/dental insurance, United Way, life insurance, disability, 401(k) contributions, etc. If your company has union employees, Payroll also keeps track of
