In an organization, payroll refers to the amount paid to employees during a certain period of time, for services they provided. It is the sum of all financial records of salaries, wages, bonuses and deductions. The process consists of calculation of salaries and tax deductions of the employees, administrating the retirement benefits and disbursements of salaries to employees. It can also be called as an accounts activity which undertakes the salary administration of employees in the organization.
Administrating the employees’ salaries is not an easy task, the HR and accounts department work together to calculate and disburse the salary to the employees. For this purpose Database of employees is maintained. Employee’s details such as name, employee ID, basic salary, daily attendance, etc are recorded. Gross Salary is calculated after adding the allowances and incentives to the basic salary of the employee. Net salary is calculated by deducting the tax and other calculated deductions (loan installments, etc).