A payroll department is responsible for performing a number of tasks to ensure that accurate and timely payrolls are issued as well as payroll taxes and record-keeping are met. There is no advantage to rushing these duties, and they should be done with great care and attention to detail. It is possible that this would lead to erroneous paychecks and insufficient payroll tax records or bookkeeping procedures being followed.
- Payroll should be processed well in advance of the payday. Ensure that you devise a payroll-processing schedule that is reasonable enough to allow you ample time to complete the payroll and to correct any errors discovered before employee paychecks are distributed. You should perform payroll processing two or three days in advance of the actual payment date, for instance.
- Ensure that the payroll record of the employee has been updated, if necessary. As part of this process, you will need to amend your address, change payroll deductions, such as the W-4 form and state income tax forms, as well as change voluntary deductions, such as retirement and health benefits. Further, information on newly hired employees for the current pay period should also be entered.
- Calculate timekeeping data from timesheets and time cards and enter the hours that need to be paid into the timekeeping system, such as regular hours, overtime hours, and vacation hours, into the system to be paid. It is possible to import the time from a timekeeping program into a payroll program if you use a computerized program to keep track of time. There is just one thing you need to do to make sure the time is transported correctly and make the necessary edits to it.
- It is also possible for you to pay other types of revenue such as bonuses, commissions, or retroactive payments due to a pay raise. Make corrections if you have overpaid or underpaid from a previous pay period. For instance, add extra pay or deduct wage deductions if this is the case. You should prorate the salaried employee’s pay if he or she terminates, but does not work throughout the pay period, and enter a stop date in your payroll software to stop the processing of any future payments for that employee.
- Further, prorate the pay of the employee who has been hired after the start of the current pay period if she is a salaried employee. Suppose she started working on the fourth day of the biweekly pay period, instead of paying her for 10 working days, you would pay her for seven working days instead.
- Ensure you have all the payroll reports you need so that you can verify the payroll before you print paychecks and generate the direct deposit file for your employees. In case adjustments are needed, make them.
- Prepare and print paychecks and pay stubs for your employees. It is necessary to generate a direct deposit file that needs to be forwarded to the bank for processing. Please contact the bank and ensure that the payment has been received properly, and make sure that the amount has been received.
- Print payroll registers that show the employee’s gross-to-net wages for the current payroll period for each employee. Put the files in a confidential storage area where they can be protected. These records need to be maintained for a minimum period of three years. Ideally, timekeeping records should be kept for at least two years. Wage computations should also be stored for at least two years.
- The purpose of this report is for human resources and finance departments to use for purposes related to the administration and reconciliation of benefits, so the report should be printed and distributed by those departments. In the case that a separate department or company handles payroll taxes, be sure to forward the necessary payroll tax records for each pay period to the appropriate individual.
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