Payroll
The step that is required to pay employees after each pay period calculations and involves the number of hours the employee worked, pay rate, and deductions. The total wages paid by the employer to the employee of different fields. Payroll calculations are defined as the multiple numbers and business tasks performed by the employer. The sum of which equals the employers pay. The gross wages and deductions are calculated by the employer to pay the employee’s net amount that needs to be paid. To calculate an employee’s Net Pay, the basic gross pay of the employee is to be determined along with the number of hours worked in a pay period by hourly rate.
How to calculate payroll?
Notification to the employees
Collect scheduling or week schedule
Review and approve scheduling
Enter hours worked
Enter wage rate changes
Calculate gross pay
Payroll processing
The process begins only when the employee’s generated sheet fulfils all the requirements of the employment status and Department of Labor (DOL) verification. This is followed to do a proper payment settling. This process begins from the first employee. The pay period is to be calculated by including the employees hours and pay rate. The deductions include state and federal taxes, unemployment, and insurance.
How is it processed?
The manual method might be time consuming and error prone. As the calculation of extra working time, overtime are to be carried forward manually. There are free online software available to calculate the payroll. The processing comprises of three steps.
Company Registration Procedural steps
- Step 1: Collect timesheet
- Step 2: Calculate Income & Deductions
- Step 3: Pay Employees
Collect timesheet
The first and foremost step is to be clear with the time worked for in a uniform pay sheet format. Many times different employers use different methods such as
- timesheet,
- time clock,
- timekeeping system or
- scheduling system to calculate employee attendance on paper timecards or electronically.
In a manual process, one person will have to enter the time on each employee time card. This might hardly consume 15 to 20 minutes of your busy scheduling. It is better to use a electronical timecard.
Calculate Income & Deductions
Upload the data electronically or feed the data to the payroll system or software. The software is of two different types where the daily timecard calculation can be done by updating the next day data. Or calculate all in one shot for each and every employee.
Count the hours worked:
Calculating and verifying the worked hours with the actual contract hours.
Determine the overtime:
The employee’s timesheet has to be verified and overtime calculations are to be made. The over time is paid as half the full day amount.
Calculate the gross pay:
Calculate by multiplying pay rate time the employer has worked for. Just ensuring the
employee’s straight work time and overtime worked along with overtime hours.
Regular pay+ overtime pay= gross pay
The correct verification is to be ensured.
Tax deductions
Tax deductions such as Benefits, taxes and insurances are to be reduced from the gross pay amount.
Net Pay Calculation
The net pay is calculated by gross pay amount and subtracting the deductions, you reach in Net Pay.
Pay Employees
- Cash,
- Payroll Check,
- Direct Deposit Or
- Debit Card
First step is to calculate the timecards and verify for correct entry of each employee. Second step is to input the number of hours worked and deductions to be determined from the gross pay. Third step follows as make sure there’s enough money in the payroll account. Fourth step is to print and hand out the paychecks or employees receive direct deposit.
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