Every business has employees who receive payment of the services they have rendered during a cyclic period ranging from an hour to a calendar year. Therefore, it's essential for an entity to keep a database of the employees’ salaries. This system is known as a payroll.
A payroll can either be executed as part of the entity's Labour expenses or outsourced as an indirect overhead to the firm. Regardless of whether the payroll is run in the entity or by payroll specialists outside the firm, it is very important to have basic knowledge of how to operate a payroll.
Essential details required to run a payroll system.
- Employee personal details - These include the employee's full name, date of birth, social security number and also banking details. The employee's job description is also very important to help determine the remuneration rate of the employee.
- Employee work timesheet - The timesheet encompasses all shifts or hours worked by an individual employee in a given time frame. It also includes all holiday hours worked, off days, vacation leave and sick leave days taken by an employee.
- It is also vital to have an understanding of all taxes an employee is required to comply with. These taxes include the PAYE, PRSI, and USC. All deductions made on the gross income of the employee vary depending on how much an employee earns.
Over the years, the payroll system has had many adjustments, with several features being added.
- It has become a mandate to quote all taxes which your employee is required to comply with before the remuneration date.
- The system now enables the employer to calculate and hence deduct all tax iterations each month. This feature is accessible through all the data availed by the revenue payroll notification system.
- All employees at a firm are allocated an individual distinct code used to identify them in the payroll system database. This is known as an employee identifier number.
Advantages of outsourcing payroll services
- Running a payroll can be particularly arduous and demanding hence businesses in their pre-natal phase do not need an extra burden of running payroll in-house. This allows an entity to focus on their core business activities.
- Outsourcing means employee salaries and information remains private and confidential in the entity.
To operate a payroll system it is essential to register with the PAYE system. It is a prerequisite to be registered as an employer with the Revenue Online services platform as well. However if unable to register on this viable platform TR1 and TR2 pdf forms that are accessible on the Revenue services for Ireland platform can alternatively be used.
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