A company's payroll system is the set of processes and procedures used to pay employees and administer benefits in an accurate, consistent and timely manner. Depending on the size of the business, the payroll system can be as simple as utilizing online payroll software or as complex as using multiple human resource software packages and functions. Regardless of what type of system is used, the goal remains the same – issuing accurate pay and benefits that meet compliance and taxation regulations.

Processing payroll requires an intricate understanding of a wide variety of regulations, including withholding taxes and required employee deductions. In most cases, it requires the expertise of payroll professionals who are well-versed in payroll laws and procedures.

A successful payroll system must have accurate and up-to-date employee data for all tasks related to processing employee wages and deductions. This can include personal data, such as name, mailing address and Social Security Number, as well as job-related information like wages, bonuses, deductions and hours worked.

Payroll also involves the timely delivery of this data to the employee's bank accounts, or any other designated account such as a retirement or savings plan. This delivery must occur in a secure manner and in accordance with current laws. In some cases, physical checks may be printed for each employee or direct deposits can be utilized.

In addition to the payment of wages, payroll processing also covers the management of employee benefits, such as health insurance, overtime wages, vacation days, bonuses and other compensation. Employers must have a good understanding of applicable regulations and state laws in order to ensure compliance and an accurate processing of payroll.

Lastly, payroll involves the reporting of wages and salaries to the respective municipal, state and federal agencies. This includes filing of gross wages, deductions, employer contributions and employee contributions. Depending on the size of the company, quarterly and annual payroll taxes and reports must also be filed.

No matter what type of payroll system is used, it is essential that employers ensure accuracy and timely delivery of employee wages and benefits. Employers must also stay abreast of changing regulations, as well as educate their employees on payroll-related procedures and policies. By establishing good procedures for payroll, businesses can maintain a successful payroll system that meets the needs of both employers and employees.