Payroll
Definition
The process of compensating employees, covering wages, taxes, and deductions.
What is Payroll?
Payroll includes calculating gross pay, withholding taxes and deductions, issuing net pay, and filing all required employer tax reports. Payroll also includes wage garnishments and benefits contributions.
Why is Payroll Important for Employers?
- Ensures legal compliance with tax and labor laws
- Confirms employees are paid accurately and on time
- Maintains employee satisfaction and retention
- Prevents costly penalties, audits, and potential legal issues
- Supports financial reporting and business planning
FAQs
What are the main components of payroll processing?
Gross pay calculation, tax and benefit deductions, net pay disbursement, and federal/state reporting and filings.
How often must payroll taxes be filed?
This depends on your payroll size and frequency. It could be semi-weekly, monthly, or quarterly.
What’s the penalty for payroll errors?
Errors can lead to IRS penalties, wage claims, or state audits. Partnering with a PEO significantly reduces this risk.
How ExtensisHR Can Help
We deliver a total payroll solution including:
- Managing full-service payroll processing
- Ensuring tax filing and wage compliance
- Integrating payroll with timekeeping and HRIS
- Providing real-time reporting and dedicated support