Payroll is the total of all compensation a business must pay to its employees for a particular period of time or on a specific date. It is usually managed by the human resources department of a business; small-business payrolls may be handled directly by the business owner or an associate. Increasingly, payroll is outsourced to specialized firms that handle paycheck processing, employee benefits and insurance, and accounting tasks such as tax withholding.
Payroll can also refer to the list of employees of a business and the amount of compensation due to each of them. It is a major expense for most businesses and is almost always deductible , meaning the expense can be deducted from gross income lowering the taxable income of the company. Payroll can vary from one pay period to another because of overtime, sick pay, and other variables.
Payroll is the process of paying a company’s employees, which can include the tracking of hours worked, the calculation of employee’s pay, and the distribution of payments via direct deposit directly to their account or by check. However, companies must also perform accounting functions to record payroll, taxes withheld, bonuses, overtime pay, sick time, and vacation pay.