Payroll: Everything You Need to Know About It

Payroll is a system used to record and determine the salaries payable to employees in an organization. It is prepared according to basic and additional working hours, wages, allowances, and other compensations.

The Payroll is usually prepared in one month and delivered to employees on the first day of the following month. The salaries due to employees are determined according to what is agreed upon in the organization's salary policy.

To prepare the Payroll, the organization must collect necessary information from each employee, such as the number of hours the employee works per month, the number of days the employee was available to work, the number of days the employee was sick or not working, and the bonuses and other benefits owed to the employee. After collecting this information, the Payroll is prepared.

Here is an article with all the information you may need when preparing a payroll.

What are the basic requirements and conditions needed to prepare the Payroll?

There are many laws related to the rights and duties of employees in companies, and they differ according to the company's size. Therefore, you should check with the relevant government agencies and institutions for regional and local laws governing labor training in your project. You should also look for business rules related to the following:

• Minimum wage allowed
• Overtime work and those exempted from it
• Laws of child labor
• Double pay
• work hours
• Appointments related to travel, waiting, calling, sleeping, meetings, and training sessions
• What work is allowed to be executed
• Annual leaves

Related Articles:

Employment Verification Letter Tips (+ Free Samples)-Drjobpro.com

Salary Certificate Format: How to Write a Perfect One with Templates-Dr.Job

Payroll and Vacation Schedule

When preparing the Payroll, the organization must specify the paid vacations due to the employees. These vacations may include the official holidays organized in the country where the employee works, the usual annual leaves in the organization, and sick leave for sick employees.

Although these holidays may be paid, the value of the wage due in these holidays may be determined based on the lowest salary according to the laws of the country in which the employee works or based on the basic wage that is paid to the employee in the regular month. The remuneration for these leaves must be determined, considering the relevant laws and the institution's leave policy.

How Do You Prepare the Payroll?

The payroll preparation stage is one of the essential factors affecting the project's success. Therefore, handling it with care and precision is vital to maintaining balance and success. To achieve this goal, you can follow these steps:

1- Determine the date of payment of salaries and wages

Organizations set when salaries are paid at fixed intervals; some pay salaries weekly, those pay monthly, and those who go to the option to pay every 14 days. So, you must first set the payment date while reviewing and complying with your location's applicable laws and regulations.

2- Determine the employee's capacity

As an employer, you will need to divide employees into two main categories: a non-exempt employed employee who is paid by the hour and must be provided a salary over the applicable minimum. The possibility of overtime also varies by location.

The exempt employee, on the other hand, is the one who receives a fixed salary and is exempt from what may be imposed on workers, for example, in terms of additional working hours.

Here you can consult a specialist or view the country's laws through the website related to work and workers.

3- Learn about tax measures

There are several tax measures companies and employees can take to reduce their tax burden. To learn about these measures and what is subject to them, you can view the website of the local tax authority. To ensure that you are dealing with tax laws correctly, you can use the help of a certified tax professional to ensure that the tax deductions offered are correct and appropriate.

4- Recording working hours and attendance and departure hours

All organizations need to manually or electronically monitor working hours, and they can facilitate payroll management while facilitating payroll calculation with additional accruals.

5- Managing employee records

There are many details that you have to maintain in your personnel records. This information includes the employee's name, personal address, ID number, date of birth, email address, personal phone number, current work address, date of employment, date of last promotion, and date when their benefits are due. And this information you need throughout the year to deal with the Payroll.

There are several standards and conditions that you must consider in keeping employee records. Although you must save all important employee-related documents, you must be mindful of governmental and administrative laws regarding record-keeping and personal privacy.

You must handle these records carefully and not disclose them to any third party.

Who Prepares the Payroll?

There are several options available for setting up a payroll for your organization.

Each method has advantages and disadvantages, and you should decide which option best suits your company and its requirements.

Here are some of the options available:

Set up your Payroll: This option is suitable for small companies that don't have many employees and don't depend on company pay rates. This allows the manager or owner to control the salaries and adjust as they see fit. However, you may have to perform several complex tasks, such as dealing with taxes, social security, and preparing required reports.

Using an online service: Many services allow you to set up a payroll online. These services are often the easiest way to set up a payroll and provide you with many features and tools to help you in this regard.

In addition, many companies that rely on complex payrolls can hire professional accountants to help with this work.

The third option for preparing the Payroll, hiring an expert accountant, is the most costly for the company. However, this is the perfect choice to save time and avoid hassles and problems.

Now that you know the necessary information about the Payroll, you can,