Every business will always need a payroll system to compensate the employees for their work accurately. A payroll system enables you to run payroll quickly and efficiently. By spending less time and effort on payroll, you can focus on other, more pressing business needs.
What is payroll?
According to QuickBooks, payroll is the business process of paying employees. Running payroll calculates employee earnings and factoring out federal and state payroll taxes. The term payroll programs can also refer to:
- A business’s financial records of employees.
- The distribution of employee paychecks.
- Annual catalogues of employee wages.
How does payroll work?
There are various important aspects to be taken into consideration when it comes to transferring money to employees. Employees can minimize errors and keep their businesses compliant with relevant tax laws by following a consistent payroll process. The payroll process for most companies can generally be broken down into eight essential steps:
- Determine your payroll system
- Come up with a payroll policy
- Collect employee information
- Set up direct deposit
- Implement a time tracking system
- Review employee timesheets
- Approve and submit payroll
- Create and save payroll records
What does a payroll system do?
Setting up a payroll system helps to ensure that payroll gets done accurately and on time. The last thing you want as an employer is for your team to have problems with their paychecks. Every employee expects to be paid the amount they’re owed on payday. If they receive a late payment or a light paycheck, they’ll likely be dissatisfied with management. Below are the types of payroll systems.
- In-house payroll: Some companies set up an internal payroll process that must be completed manually every pay period. With this method, either the business owner or a human resources employee is directly responsible for running payroll. While this can be an economical option for small businesses, it can be hard to sustain once your team grows.
- Full-time accountant: An accountant is a financial expert who can run payroll and file tax forms on your behalf. Outsourcing payroll management to an accountant can provide you with helpful support. They can take care of the payroll process from start to finish and give you advice and insights along the way.
- Payroll service: are companies that specialize in running payroll for other businesses. They offer various payroll services, from time tracking to filing taxes on your company’s behalf. Generally, payroll providers charge a flat fee per month or payroll run.
- Payroll software: You can automate payroll processing entirely with specialized accounting software. One benefit of software solutions is that they minimize the chance of human error. Plus, payroll and HR software programs can usually generate detailed payroll reports and pay stubs each pay period.
Benefits of payroll software
Full-service payroll providers and payroll software offer unique advantages over other payroll solutions. Here are just some of the benefits that come with these particular payroll services:
- Save money: Pricing is one of the most important considerations for many small business owners. Hiring in-house payroll managers or an accountant can be expensive. You’ll have to pay for salaries, benefits, PTO, etc. However, with a payroll provider, you typically pay a flat monthly fee, making it a cost-effective option in the long run.
- Automate payroll: When you use payroll software, you can automate most aspects of the payroll process. In this case, you’ll have to do some initial setup; then, you can run online payroll in a matter of clicks each pay period.
- Minimize errors: When you run payroll manually, human errors can occur. These errors can result in employee dissatisfaction or tax noncompliance. Payroll software can complete complex calculations in no time, saving you time and minimizing the chance of human error. Many payroll companies even offer penalty protection if you get hit with a tax penalty.
- Access anywhere: Almost every payroll provider has a website or mobile app, so you can access payroll data no matter where you are. Many also offer employee self-service portals that allow your workers to track their hours and view HR data on the go.
We offer a Diploma in Accounting & Payroll Administration for you to embark on a career in finance. The courses include preparation to become a certified Payroll Compliance Practitioner (PCP) certification Canada. The role is always in high demand, with the accounting and payroll administrator’s salary falling between $18.25 and $38 in Canada. Get your payroll certification by enrolling in our program! You may qualify for the Ontario government funding for up to $28,000 towards tuition fees and basic living expenses. Visit our program page to learn more and take this free assessment to get you started with the application!