Q: What is Payroll?
A: In an organization, payroll is the sum of all of the financial records of employee salaries, wages, bonuses and deductions. It is also the process organizations employ in remunerating and payment of their employees for the work they have done. Payroll involves ensuring that all appropriate deductions are remitted to appropriate authorities, for instance tax deducted must be remitted to the tax authority, so also pension and others.
Payroll is subject to numerous laws and regulations that companies need to cooperate with. In Nigeria, payroll is subject to Personal Income Tax Act 2011 as amended, Contributory Pension Act 2014 Amended, National Health Insurance Act, Nigerian Social Insurance Trust Fund Act, Industrial Training Fund Act
From an accounting perspective, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and because they are subject to laws and regulations, which the tax authorities have been empowered to conduct the tax audit of the payroll.
How to manage payroll is a hard task that many small business owners learn too late, and only after sacrificing enormous amounts of time and energy on a process that needs to be handled both intelligently and with thorough planning.
Another reason why outsourcing payroll is good is that businesses are able to pass along the responsibility of certain accountability to the payroll provider so they no longer have to worry about these tasks.
Payroll is a service that allows clients to have professionals specialized in processing payroll and tax determination. These professionals provide detailed and timely information from which confidence can be derived.
To find out more about why outsourcing payroll is important, check out the page on our website.