Keeping up with payroll is a necessary business task. For one thing, your employees expect to get paid what they’re owed, on time and in full. In a recent survey, 25% of respondents said they had been paid inaccurately and 22% reported having been paid late in the past 12 months.¹ Not honoring payroll obligations can lead to workplace dissatisfaction and increased employee turnover.
On the admin side, your business is responsible for keeping a close eye on its payroll information for a variety of reasons. And granted, just because payroll recordkeeping is important doesn’t mean it’s not a yawn-worthy, tedious pursuit. Enter: the payroll register.
Knowing what payroll registers are and how and why to use them can help you tame the payroll beast.
What is a payroll register?
A payroll register is an all-encompassing report of every employee’s payment details for a specific pay period. Some businesses use digital spreadsheets to create payroll registers, some work from a payroll register template, while others opt for payroll software.
What items are included on a payroll register?
A payroll register lists a range of information, from individual employee earnings to gross pay deductions and beyond. Here’s a look at the line items that build a good one:
List the employee’s first and last name. If applicable, include middle name or initial.
These will be the dates the pay covers. Depending on the employer, a payroll period may be weekly, bi-weekly, semi-monthly, or monthly.
An employee’s total pay before any taxes or other deductions are withheld.
Also referred to as “take-home pay,” net pay is the amount each employee actually receives.
Employee’s pay rate
List the hourly wage or salary for each individual employee.
Regular hours worked
The number of normal hours an employee worked during the pay period.
Overtime hours worked
The number of hours each employee worked beyond their regular hours. Some may be eligible for overtime pay.
The payroll register report should also include Social Security, Medicare taxes, and unemployment insurance.
Deductions typically include withholdings for income tax payments, health insurance and other employee-paid benefits, and any garnishments of employee wages.
If the employer helped cover items like health insurance or retirement contributions, that amount should also be included in this payroll journal.
Using a payroll register
Staying on top of entries to a payroll register is critical for payroll administration and accounting and tax purposes. Without proper upkeep, it won’t be accurate or a complete piece of otherwise-valuable data.
Enter payroll details
It’s an organizational best practice to add all the payment details to payroll journals every pay period to keep them current.
Regularly reconcile payroll registers
Conducting regular audits of your payroll data can help you catch mistakes and ensure the accuracy of payroll records.
Benefits of a payroll register
Although it may seem like a thankless pursuit, significant benefits result from logging payroll data into a register.
Payroll registers support company budgeting
Using a payroll register makes it simple to calculate total payroll expenses. It also offers an easy way to determine how much payroll tax a company owes.
Payroll records help guide hiring plans
In addition, comprehensive payroll registers let employers and HR personnel better assess business activities over time.
Among other things, this big-picture perspective lets them quickly spot trends indicative of predictable busy and slow seasons. This vital payroll data can inform purchasing and hiring decisions to navigate and optimize anticipated business ebbs and flows. For instance, the company can order supplies, equipment, and merchandise in advance of their need. They can also prepare to hire extra people during some months, to avoid costly overtime pay and employee burnout, and cease hiring in others.
Aid in addressing employee discrepancies
Employees frequently have questions about their paycheck history, overtime, and deductions. Payroll registers can help you quickly address them. Easily review the pay period in question and succinctly answer their payroll questions. Accurate information on hand decreases the chances of a disgruntled employee thinking they were underpaid or subject to unjustified deductions.
Streamline the recordkeeping processes
From the admin side, a primary reason to use a payroll register is that it creates a single source of truth for the company’s payroll information. If it’s accurate and easy to refer to, it prevents employers from wasting time digging through files or trying to recreate information from months earlier.
In short, using payroll registers is just good business. So understanding how to use one is critical. With stringent maintenance, you support the payroll process while preempting missteps in budgeting, compliance, and employee compensation.
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1 2019 Pay Experience Report, Ceridian