Payroll Services and Payroll Processing- A Guide

Payroll processing is not an easy job for any manager or HRs. They need to be record-keeping and must know tax complexities, besides showing attention to detail and ensuring conformity with rules and regulations. Whereas payroll services mitigate the amount of manual work and time needed to process payroll.  In this article, we will discuss what payroll processing and service are. If you want to know more about them, go through it. 

What is Payroll Processing?

Payroll processing is the collective set of actions taken to determine each employee's overall remuneration.

Typically, the process involves three to four stages and tasks, including defining salary structures, gathering employee information, components, deductions and allowances, setting up the necessary tax and other adjustment policies, and finally calculating the total salary considering all these.

A payroll processing cycle involves filing, reporting, and sending payslips to employees after the payment of salaries.

In simple terms, if payroll is the amount paid by the employer to employees, payroll processing is the entire process of precisely calculating the net pay of the employees complying with legal requirements and company policies. 

What are Payroll Services?

A third-party company or organisation that helps with payroll processing is known as a payroll service. It helps ease many things that help ensure timely and accurate payment, such as:

• Employee Time and Attendance
• Workers' Compensation
• Taxes
• Direct Deposit Information

Payroll services in the modern day offer more than just regular payment methods. They provide full-service payroll management for companies of all sizes across all sectors. Here are some that payroll services include.

• Tracking Employee Attendance
• Collecting Wage and Time Information
• Calculating wages
• Monitoring Workers' Compensation Premiums
• Keeping Electronic Payroll Records
• Following Federal and State Laws for Payroll
• Calculating Payroll Taxes
• Preparing and Mailing Employee Tax Forms
• Setting Up, Adjusting and Making Direct Deposits
• Integrating Third-party Benefits into Payroll

How Do Payroll Processing and Services Work?

Payroll processing is the method to calculate the payment of employees by organisations. It determines the payment a company pays to its employees for their work during a specific period, including salaries, wages, bonuses, and other benefits. There are several factors that impact payroll processing, such as income tax, provident fund, professional tax, leave encashment, etc. Whereas payroll service is a third-party company that helps organisations in payroll processing. Payroll services help organisations by maintaining the records of their employees’ working hours. Besides, payroll service calculates their employees’ pay after subtracting the necessary taxes, withholdings and deductions before paying the employees. 

Conclusion

Actually, payroll processing is a complex work that consumes lots of organisation’s time. because it has to make sure that every employee receives the salary. To ensure that employees receive a salary, they go through a complex circle of calculation which is time-consuming. On the contrary, payroll service offers organisation services that can reduce the burden of calculating payment of every employee. It means organisation can concentrate on their core business and ensure enhanced sales of their products and services. If you also want to reduce your payment calculation burden, take help from Kutumbh HRCare (Kaam Matlab Kutumbh), a leading manpower enterprise serving Fortune 500 clients.