Payroll processing is no fun. It involves gathering large amounts of information, checking and verifying that information, and keeping track of that information indefinitely for each employee you have that keeps working for your company. A lot of things can go wrong during payroll processing if you are not following each step of the process to the letter. Unless you have specific training on how to perform payroll processing correctly, this is one job that is best left to the experts.
For All Types of Payroll Processing, Information Is the First Step
To begin payroll processing, one needs to start off by gathering information. With each new hire, you need to get information from the employee that wants to get paid. The employee must fill out a W-4, which will provide you with information like the marital status for that employee, their amount of withholdings, their filing status when it comes to taxes, and even how many dependents that employee must claim.
Next, you need to gather information to complete payroll processing on your pre-determined pay dates. You will need each employee’s hourly or salaried rate. Also, you will need to know how many hours were worked during that pay period. If the employee worked overtime, you need to know what the overtime rate was for the hours worked. Some companies have different overtime rates depending on the hours worked, so make sure this is known for payroll processing as well.
The next step in payroll processing is determining the gross pay that each employee will receive on their payment dates. If an employee is salaried, their pay is likely going to be different than an employee who is paid on an hourly basis. From there, you need to figure out how many fees are going to come out prior to final payroll processing. What is being withheld is going to differ from one person to the next, based on the information you collected on their W-4.
Every employee you are doing payroll processing for is going to have specific deductions from their pay. These deductions are meant to cover things like Medicare, Social Security, and federal Unemployment Taxes. From there, each withholding amount must be reported to the proper authority so that they can take note and keep track. If you are considering hiring out to do your payroll processing, this part of the procedure can be part of what responsibility they take off you.
You must also take note which employees have extra deductions to make. Some employees want specific amounts of their income taken out to go straight to retirement savings accounts. Others have things like child support taken directly out of their income during payroll processing. You may also have to take care of the employee’s premiums for their, and potentially their families, health care. Automatic contributions to charities should also be taken out prior to payroll processing, as those payments must go somewhere other than into the employee’s direct deposit account or on to their paper check.
After the Payroll Processing Is Completed
Now that you are done with the main parts of the payroll, you also need to make sure that you provide receipts and stubs to the employees. They need to know what they were paid for, and what was taken out of each check. You will need to be able to tell them how many hours were on this check, and what the hourly rate was (unless they are salaried). The stub must also provide information on what the overtime pay is, and how many hours were paid at that rate. Each deduction must also be spelled out carefully. How much was taken out, as well as what it was taken out for, needs to be clearly labeled on the stubs, you should also make sure there is year to date for all the information that you put on each employee’s pay stub.
Call in Experience When It Comes to Payroll Processing
Payroll processing is a difficult task. There are a lot of steps to it, any one of which could pose a problem if you forget even a slight piece of information. For the entire process to work smoothly, you should turn to professionals so that you can avoid a mess should you forget anything along the way. Calling in a company with the experience, training, and expertise in payroll processing allows you to go through and pay your employees without the worries that accompany the makes that inevitably happen.