Difference between revisions of "Payroll"

Latest revision as of 22:06, December 13, 2020

A payroll is a company record of employee wages, salaries, deductions and actual pay. The record is kept following the law for pay rates such as minimum wage, overtime and holiday rate.

An employee's pay might be weekly, biweekly, semimonthly, or monthly, and may be made by paycheck or by automatic deposit (the latter is by far the most common except in very small businesses). The employee gets a record of the pay, telling gross earnings (salary/hourly wages, overtime, and/or bonuses), deductions (which include mandatory deductions for income tax, social security and Medicare) and voluntary deductions (such as for insurance, contributions to a retirement account, and/or for charitable deductions such as for United Way or the Combined Federal Campaign for federal employees), and net earnings.

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-'''Payroll''' is the record of employee wages, salaries, deductions and actual pay. The record is kept following the law for pay rates such as minimum wage, overtime and holiday rate. Pay might be biweekly or semimonthly by paycheck or by automatic check deposit. Either way, the employee gets a pay slip telling gross earnings, deductions and net earnings. Compulsory deductions are fees of the government such as for unemployment insurance and social security. Voluntary deductions include money charged the employees for company health insurance and charitable donations.<ref>Trainor, T. 2003. ''Fundamentals of Accounting: Volume Three.'' Canada: Darnley Publishing Group.</ref>
+A '''payroll''' is a company record of employee wages, salaries, deductions and actual pay. The record is kept following the law for pay rates such as minimum wage, overtime and holiday rate.
-The employees are paid from the revenues of the company, such as the money customers pay the company for goods or services. If the company’s revenues are less than its expenses, such as payroll expense, it has a net loss. If the customer’s didn’t pay the company enough for the employees to be paid, this shortfall might be covered by borrowing. However, such borrowing would become a problem over the long-teem, since borrowed money needs to be returned to the bank, which charges the company a fee called interest for use of the money.<ref>Trainor, T. 2003. ''Fundamentals of Accounting: Volume One.'' Canada: Darnley Publishing Group.</ref>
+An employee's pay might be weekly, biweekly, semimonthly, or monthly, and may be made by paycheck or by automatic deposit (the latter is by far the most common except in very small businesses). The employee gets a record of the pay, telling gross earnings (salary/hourly wages, overtime, and/or bonuses), deductions (which include mandatory deductions for income tax, social security and Medicare) and voluntary deductions (such as for insurance, contributions to a retirement account, and/or for charitable deductions such as for United Way or the Combined Federal Campaign for federal employees), and net earnings.
-==References==
-<references />
 [[Category:Accounting Terms]]
-[[Category:Budget terms]]
-[[Category:Business]]
-[[Category:Coins]]
-[[Category:Commerce]]
-[[Category:Currency]]
-[[Category:Economic Stimulus]]
-[[Category:Economics terms]]
-[[Category:Employment]]
-[[Category:Free market economics]]
-[[Category:Government finance]]
-[[Category:Taxation]]