5 Key Payroll Items Every Business Needs to Include in Their Payroll
Paying employees is not as straightforward as simply writing a check or handing over the money. It requires a long and tedious process of preparing payroll and collecting, managing, and keeping relevant documents. This is why, oftentimes, businesses prefer to outsource the task to a manpower contractor that offers payroll services.
But what types of items or information do you need to include in a payroll? At a micro-level, what does a payroll composed of? Find out below some of the important details and items that payroll needs to have. When you opt for payroll outsourcing services, the manpower supplier will also be needing this information for them to prepare an accurate payroll.
So, without further ado, here are the breakdown of the information you need to include in your payroll.
Employee information
Apart from the name of your employees, you also need to collect additional relevant information such as the social security number, address, contact information, federal income tax withholding, and tax ID number, whichever is applicable.
If the salary is given through bank transfer, you also need to secure the applicable bank account details of your employees.
Time and attendance record
Regardless of whether you are paying your employees based on an hourly wage or fixed monthly salary, you may want to ensure that you are paying them based on the hours they worked. You may track their working hours and check if they do log in and log out on time.
For hourly employees, tracking the hours worked will ensure that you are paying the exact amount for the hours your employees spent for work. At the same time, it also gives your employees the assurance that they are getting paid the proper amount they deserve.
Salary or wage
Salary and wage are two different things. Salary is the fixed amount (often given on a monthly or bi-monthly basis) you will be paying your employees. This is often applicable to regular employees. Whereas, a wage is an amount computed per hour worked. This is often the option used for workers working on an hourly basis like those talents from a labor contractor. A good example of this is payroll outsourcing.
When you opt to use payroll services in Baroda, you will be paying the workers on an hourly basis. Their wage will depend on how much time they spent processing the payroll.
Deductions
Deductions should be reflected on the payroll. These are the amount removed from the paycheck for purposes like payroll withholdings, payroll tax, and wage or salary garnishments.
Wage or salary garnishments vary greatly. Oftentimes, a court order is required to determine the amount to be deducted and to authorize you to perform such activity.
Wage or salary garnishments can be a federal student loan repayment, alimony payment, child support, medical bill payment, credit, or personal loan payments.
The mandatory government contributions are also deducted from your employee’s paycheck. These mandatory government contributions vary from country to country.
Benefits, commissions, and bonus pay
If applicable, you also need to include the commissions, benefits, and bonus pay of your employees in their paycheck. This also includes the mid-year bonus, year-end bonus, and 13th-month pay.
The benefits also referred to as fringed benefits, is the amount you need to pay to your employees on top of their financial compensation. Among the common types of these benefits are health insurance, educational assistance, tuition reimbursement, retirement benefits, and employee discounts.
