Payroll - Definition & Meaning
What is Payroll?
Payroll refers to the total compensation provided by a business to an employee for a fixed time period which includes fixed salary, bonuses and deductions. Payroll is important for a business from an accounting as well as ethical point of view. Payroll taxes affect the net income of a company and accurate and timely payroll payments are essential to keep up employee morale.
An employee payroll file provides the accounting staff with the information necessary to pay an employee but limits access to confidential information.
Contents of an Employee Payroll File:
- Offer letter
- Pay Authorization
- Form W-4 to determine the amount of income tax the employer should withhold from the employee’s paycheck
- Employee benefits selection
- Salaried time accounting forms
- Hourly weekly time sheets
- Attendance Records
- Expense Reimbursement
- Pay Advance Request Form
- Pay rate changes
- Paperwork related to bonus, profit sharing etc
- Company Loan Documents
- Payment Schedule
- Garnishment orders (deducting money from the salary as a result of a court order)
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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