What is Payroll Records?
Payroll Record can be defined as a list of all the employees of that company in which every information related to the payments made to the employees which they are entitled to receive such as salaries, wages, bonuses, taxes, etc are recorded so that at every interval there can be a proper track of each payment which are been paid to that employees from the employer’s point of view and if a discrepancy takes place then the same could be pointed out easily from the records.
Payroll Records constitute anything and everything related to the information about the employees of the company. It depicts the amount for which the employees are getting paid during each period of time. The period of time differs from company to company. It can be daily, weekly, bi-weekly, semi-monthly, monthly, or any period of time, which suits the company’s pay period.
What Information is Included on
- The foremost information is gross pay, which is the main in-hand amount shown first before making any deduction from it. Gross pay is calculated by multiplying the hourly pay rate to the number of days worked.
- The next information would be deductions, which are of two types like mandatory deductions and voluntary deductions. There are several taxes like professional tax, provident fund contribution from the employee’s portion, etc.
- The last is the net payNet PayEmployees' net pay, often known as take-home pay, is their salary after all deductions., which is the final amount after making all the deduction credited to the employee’s account.
How to Obtain your Payroll Record?
An employee can always obtain his/her payroll record by requesting his employer either by writing/orally to provide him with the payroll data. The employer must respond to the personnel’s request, and he should give him the details within the prescribed time limit from the date of receiving the request. However, the employer must respond to the employee’s payroll record request within generally 21 days.
How Long to Keep Certified Payroll Records?
The certified payroll record should be preserved by the employer for at least three years according to the Fair Labor Standards Act (FLSA) with other documentation like sales and purchase records etc. The records on which the wage computation is recorded should be retained for two years, i.e., time cards, tables of wage rate, work, time schedules, and different other records of addition and subtraction from the wages and salaries.
These records should be open for inspection by the division’s in-charge, who may ask the employer to make necessary changes. These records should be kept in the Central Record Office/at the place of employment.
- The system provides us with easy calculations, which make the entire pay mechanism very lucid.
- This facilitates accuracy so that the correct amount can be paid out, and it won’t raise any further discrepancies.
- The computerized payroll system reduces the chances of errors and makes an easy flow of data and information that can be trusted and re-used.
- This system has an appropriate structure for deductions and payments that are automatically set in the record to be used to calculate salaries/wages.
- This can be treated as a safe back-up option and any information demanded in a retrospective manner; the records can be useful then.
- The record-keeping of the payrollPayrollPayroll refers to the overall compensation payable by any organization to its employees on a certain date for a specific period of services they have provided in the entity. This total net pay comprises salary, wages, bonus, commission, deduction, perquisites, and other benefits. system reinstates the faith in the employees that a proper organized and documented form is maintained for their earnings, and whatever deduction will be made, for that proper proof will be shown. In the future, if an employee demands a payroll record, the company would be in a position to present them with proper back-up available to them.
- This system is a very cost-effective mechanism through which every single penny paid/deducted to the employee can be tracked. The system gives back to the organization in terms of maintaining the data correctly and preventing the organization from any future hassles.
- As the system is very cost-effective from the previous point, it saves time to a great extent because it does not allow any discrepancies and prevents any duplicity of work. For every fixed period of the interval, the correct data allows the organization for an error-free future of work.
- In case of any inspection/audit/background check, if any authority demands any personnel records, this can be proof of evidence. It will not only be a savior for a well-maintained system but also will make a difference in the goodwill of the company.
- This can be a major tool for the forecasting of the company. A company’s major part of profits goes into the payments of salaries and wages to its employees. If an estimated budget can be predicted for a future period of time, it can be a great tool for forecasting future costs and budgets for the company.
- The organization can well plan their costs and then make out the reserves/investments accordingly.
- The data and information which a payroll record holds can be at risk for data security, theft, or data leak. The sensitive information can be made open if it is not well protected.
- The second disadvantage can be cyber fraud, which is almost very common these days. The rivalry amongst companies can be a root source of this problem.
- The information access/control cannot be given to all. Only the person-in-charge of the payroll record should be familiar with the information. The person should be trustworthy enough to not leak out the company’s sensitive data.
- The last but not the least disadvantage can be the cost involved. The software, skilled operator, and the infrastructure required to set up the payroll record system are huge, and that can be a barrier for a few organizations to meet up.
This has been a guide to What is Payroll Records & its Definition. Here we discuss what information is included on payroll records and how to obtain along with advantages and disadvantages. You can learn more about from the following articles –