Meaning of Payroll

What is Payroll:

Payroll is the payment relationship where a company collects the financial records of its employees. It comes from the Latin payroll, plural of nomen, nomÄ­nis, which means 'name'. In it are detailed the assignments, deductions and deductions of a legal and contractual nature that the worker receives in his salary, and that correspond to a determined period of time.

A payroll, in this sense, is an administrative accounting tool that allows workers to pay in a legal and organized manner, as well as provide useful accounting information for the worker, the company and the body in charge of regulating labor relations. .

The payroll can be settled on a monthly, biweekly or weekly basis, depending on the period of time established between the worker and the company for payment, and it can be recorded manually or electronically, using accounting software.

Payroll characteristics

The payroll is a document of an accounting nature, with legal validity, which specifies the payment relationship established between a worker, a service provider, and a company, a contractor. In the payroll, the fiscal data of the contracting company must be present, such as name, address or fiscal number; and those of worker, understood as full name, address, tax number, Social Security affiliation number, job category, date of registration, seniority in the company, etc.

As such, a payroll is a payment invoice, therefore, it must reflect the employee's base salary, on which the deductions or deductions of rigor will be made. To this amount will be added the salary supplements, which may be for seniority, rank, training, work risks, overtime, bonuses for objectives, among others. The sum total of these items will result in the gross salary of the worker.

Next, the payroll must collect, in a specified way, what is related to the deductions of the law, corresponding to Social Security, social benefits, etc. In order, finally, in consideration of the amount accrued and the total deducted, to give as a result the amount that the worker, in the end, will receive: his net or liquid salary.

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