Payroll has its own terminology and knowledge of its slang will help you understand what a payroll processing system offers.
This is the length of time between payroll runs. Such pay period options as monthly, semi-monthly, that means twice per month, bi-weekly, that means every other week, and weekly are very popular. There is a common requirement for an itinerant labor force, when people require some other pay period, such as daily day. If you require this, then check to see if the solution you are considering offers it.
This is the method for calculating the standard pay. The most common methods of base pay are salary and hourly. Nevertheless, manufacturing workers may be paid per item made, on a piecework basis. And sales staff may be paid a commission either as a base or in addition to another type of base pay.
Labor Laws and Other Complicating Payroll Factors
There are many complicating factors, such as a recompense for overtime pay, they are hours worked over a certain limit. Similarly, work on a holiday may also garner recompense.
Some payroll systems make possible for you to enter your own tax table information, which you can get free from government sources. Nevertheless, in most cases it won't be wise to use your time. That's why, pay for a subscription to a tax table update service and have the professionals track the changes for you. In most cases for payroll application to be updated within seconds, you need to download the new tax table data over the Internet.
Before the bottom line is calculated, union dues, insurance and other deductions come off. Some payroll systems are limited as to the total number of deduction types they can handle. You may check to see if that's important in your business.
Will That Be Check or Direct Deposit?
That fact that many businesses and employees prefer to cut out the check paperwork in exchange for a direct deposit payroll system that sends the money electronically to employees' bank accounts, is particularly welcome. But this is good for a remote workforce that may not come into the office each day.
As direct deposit service cost money, and this is charged to the employer, not the employee. In this case the business can save on the cost of printing and distributing pay checks. Your task is to make this tradeoff calculation in order to make the best choice for your business.
Tracking Time and Payroll Costs
It is possible some businesses may require a way of tracking and allocating payroll costs in a more detailed way. So, if a law firm wants to charge the time of professionals to the right client matter for billing purposes, then the billing rate will vary depending upon the type of work performed. I this way charging labor expenses to the proper construction project will be that thing a construction firm wants to.
There are some things that can be very not good and even painful in the IRS for operating manually. Those are year-end tax slips, reports and summaries. Then you need to assure your payroll application or service can handle them.