The term ‘Payroll’ refers to the total amount of money that the company has to pay as wages to all its employees. The accounts department of a company is usually assigned with the task of managing the payroll of the company. In case of startups and small businesses, this can even be managed by the owner or head of the company himself. Payroll can also refer to the list of all the employees of the company and the individual wages that are to be paid to them. The payroll of a company is a variable. It can differ for different periods of time due to various factors including Variation in the number of leaves that have been taken by the employees, the overtime done and other similar factors.
If the company is a large one with hundreds or thousands of employees, it becomes very difficult for the accounts department to handle and calculate the payroll of all the employees. In such cases, the company usually takes help from some external agent by hiring their payroll services. Such companies are set up wholly to do this job and provide their services to various other companies.
The employers are just required to keep a track of the daily working hours of the employees and provide this information to the payroll service. When the pay day arrives, the payroll service provides the total amount of money that the company has to pay to each of its employees. This is calculated on the basis of the number of hours the employees have worked during a particular period of time and their pay rate. The taxes are deducted from their pay and the final amount is then directly sent to the employee’s account.
Payroll services are mostly suitable for large businesses which have enough budgets to hire a payroll service. Since the expense of hiring these services is quite large, the company has to ensure that they are not working on a tight budget. If the expense is not an issue, these external payroll services prove to be of great help to the company as the employers are relieved of the additional burden of this complex procedure.
The payroll service provides all kinds of information and reports that are required by the company relating to the working schedule of the employees, the number of vacations used by the employees and their final pay. The service also ensures that the company is legally compiling with all the tax requirements. This greatly reduces the burden of the accounts section which can then concentrate on more complex and important tasks.
Another option for the company includes using online full-service payroll software. This software can be used by the company to provide all services that an outside payroll service provides. Once the software has been purchased, it becomes free for lifetime. The software has no additional or hidden charges and even keeps the company’s informational confidential. The software is particularly suited for small or low budget companies.