Payroll is the process of paying employees. Running payroll consists of calculating employee earnings and factoring out federal and payroll related taxes. The term payroll can also refer to:
- A business’s financial records of employees
- The distribution of employee pay
- Annual records of employee wages
Payroll can be a business’s greatest overhead expense as this process is complicated. Understanding each component of payroll may help you gain a better understanding of your business finances and it can help ensure you remain compliant with the relevant laws.