What is Payroll?
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Payroll is the cyclical process in which pay for employees is calculated, distributed, and reported.
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Payroll is the cyclical process in which pay for employees is calculated, distributed, and reported.
Earnings identify different types of employee compensation for services provided. Earnings can also include specific parameters such as accounting rules, tax laws, and reporting requirements.
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A deduction is a monetary amount subtracted from an employee’s taxable income that reduces the amount paid on a pay statement.
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A general ledger is a journal containing accounting transactions related to a company’s assets, liabilities, equity, revenue, and expenses.
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Each year, businesses are legally required to report federal and jurisdictional payroll tax liabilities to the proper tax authorities. Payroll taxes are calculated based on the total compensation of each employee.
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After the proper amount of taxes are withheld for the employee and employer, it needs to be paid to the proper agencies. Federal income and insurance tax payments must be paid electronically through the electronic federal tax payment system.
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The pay statement, also known as a pay stub, includes the details of the employee’s pay for that pay period. Pay statement details help employees understand their pay and check for inaccuracies.
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