In the previous segment about the basic meaning of payroll, we concentrated on payroll terminology that all business owners should know. Now, we’ll broaden the umbrella and explore a simple overview of payroll meaning. This should clarify whether or not you decide to employ a payroll agency.
Choosing to out-source California payroll is smart if you don’t have the time or know-how needed to perform all the complexities associated with running payroll. Here is a simple overview of payroll meaning:
Processing payroll includes preparing employee paychecks and payment of payroll taxes. After paychecks are produced, either manually or electronically, they are distributed to each employee on payday. This is commonly called “doing payroll”.
As a vital aspect of payroll records, laws require for the employer to maintain a complete set of financial accounting on every employee. This could be kept in physical folders by employee or computerized. Data includes individual tax withholding amounts, employee’s salaries, bonus amounts if applicable, paid time off (PTO) for sickness, personal days, vacations and/or holidays.
The most demanding part of payroll is learning to calculate taxes correctly and following-up by filing paperwork. One mistake in payroll could cost you penalties and interest. Experts say that one out of three small business owners get tax penalties of about $800 annually. This is another reason to consider outsourcing your California payroll to a trusted payroll agency. Many payroll agencies will assume the liability of paying penalties that result from inaccurate calculations of taxes.
It’s all a matter of time and money once you get the basics down. Just keep in mind that often you have to spend money to make money. Paying a payroll agency could save big bucks down the line.
Of course, payroll meaning to your employees is quite simple. They expect correct paychecks on payday, no matter who prepares them!