What exactly is payroll processing?

plz gimme a few details.

Payroll processing is the work of managing the payment of wages and salaries and all the other paperwork associated with compensation. Employers may handle the payroll processing themselves, or farm out the process to companies that specialize in providing the service.

There is much more to payroll processing than writing checks and handing them to employees or sending them to their banks. It requires careful record keeping and involves calculating income tax deductions, Social Security and Medicare deductions, contributions to retirement plans, union dues, medical insurance, life insurance, and similar items. Each employee files a W4 form which determines the amount of income tax deduction, so the amount deducted can be different for each employee. Social Security is subject to a limit, so the deductions have to stop when the employee reaches that limit of earnings before the end of the year. Some employees never reach the limit. Employers contribute part of the Social Security and Medicare amount, may contribute toward insurance, etc. Therefore payroll processing is quite complicated and it has to be done very accurately. People are very sensitive about their pay and don't tolerate mistakes (unless the mistake is in their favor).

basic salary
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