Payroll can be a business’s greatest overhead expense. And the payroll process is complicated. But understanding each component of payroll may help you better understand your business finances.
DurationPayroll is the business process of paying employees. Running payroll consists of calculating employee earnings and factoring out federal and state payroll taxes. The term payroll can also refer to:
Payroll can be a business’s greatest overhead expense. And the payroll process is complicated. But understanding each component of payroll may help you better understand your business finances.
And it can help ensure you remain compliant with federal and state tax and labor laws. A business’s financial records of employees. The distribution of employee paychecks. Annual records of employee wages.
Steps for Processing Payroll:
Note: Payroll taxes are the most common deduction. You withhold these taxes from an employee’s gross pay. Payroll taxes refer to Social Security and Medicare taxes. “FICA tax” is another common term for these taxes.
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