What does it mean to “run payroll”?
In: Economics
A lot of smaller and mid-size companies outsource their payroll and HR work to other companies (e.g. Paycor, Paychex, ADP). When they “run payroll” they are reporting the hours each employee worked to that payroll company so you get paid correctly and on time (usually). “Running payroll” is just a shorter way of saying that.
Different in each country, but here in the UK we need to assess employees to see if we need to put them into a pension, calculate taxes, pensions, student loans and court orders, report to the government, provide payslips, pay the government and the staff, generate reports, pay court orders. Typically we use software to do that. That’s the bit I would call running the payroll. Some may refer to processing leavers/starters/salary changes and overtime as part of running the payroll.
Once all the employees report their hours, an accounting clerk runs a software program to calculate pay, taxes, deductions, etc. It can also include sending an electronic payment to the employee’s bank account or in the printing of a paper check.
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