As an employer, there are specific payroll responsibilities that are required by government agencies. These agencies can be federal, state or local. Some of these responsibilities include, but are not limited to, withholding amounts from your employees' compensation to cover income tax, social security, Medicare, and other payments.
Payroll Management generally includes activities in two major areas, Payroll Accounting and Payroll Administration. Payroll Accounting consists of: 1) recording the results of payroll activities, 2) calculating the earnings of employees and the related withholding for taxes and other deductions, and 3) preparing required tax returns. The definition includes the task of reporting the results of payroll activities to the federal, state and local tax agencies. Payroll Administration deals with the managerial aspects of maintaining a payroll, many of which are distinct from the accounting aspect of payroll. Payroll administration includes:
a) Managing employee personnel and payroll
b) Compliance with federal, state and local