Facts about Payroll and Tax Deductions
The happiest days in the life of all employees are their monthly paydays. These are the days where all their efforts at their work are being compensated by their employers. These are the days where ATMs and banks are always crowded because a certain amount of money will be distributed to the hard working employees of different companies. During paydays, workers will not just receive their salaries. These individuals will also receive a copy of their pay slip where all the computations of their salaries are printed. Aside from the computation of their salaries, the deduction for their benefits and the tax for the total amount of their salary are also indicated in the copy of each pay slip.
What is Payroll?
Payroll refers to a list of all the computations for the salaries of all the employees working in one company. This kind of computation for the regular compensations of a group of workings is not easy to accomplish. And most of the time, the content of this special document is being accomplished with full reference to what the national government policies would like to implement in providing sufficient amount of salaries for the employees.
Information You Need to Collect
In completing a well finished payroll for the monthly salaries of all the employees, some information are needed to be stated and enumerated properly by the accounting officers. Examples of the set of information that are needed to be enumerated in the payroll are the total of working days that the employees were present at work, the overtime hours of some employees, the number of absents and the incentives for those individuals who are always working harder for their company.
Aside from those factors, other set of information must be properly indicated in the payroll report together with its supporting computations to make sure that the employees will never feel unsatisfied with everything that is being distributed to them during their paydays. Of course, the computation for their benefits and insurances must be separated from the computation of the salaries. To summarize all the needed information for payrolls, its content can be properly described through the use of three different parts. This is based on what most of the existing companies around the world are practicing in accomplishing a payroll.
Types of Deductions
These three different contents of a patrol refer to the employee’s gross, voluntary payroll deductions and the statutory payroll tax deductions. These contents of a payroll will be used to compute the net pay or the take home pay of all the employees working in one company. The voluntary payroll deductions simply refer to all the benefits that every employee must have for their life insurance, health insurance and retirement. The statutory payroll tax deduction refers to the amount of tax which must be deducted from the total amount of salary during paydays. These taxes will be received by tax agencies to use as funds/budget for the development of the economy of a certain country or state. Tax deductions are required by the law and some of its examples are the federal income tax withholding and social security taxes with varied percentages in different salary amounts.