Friday, May 6, 2011

Accounting Payroll Department Function

What is the accounting function of a payroll department in a company?

The payroll department typically is involved with the preparation of the payroll from time cards, job or time tickets, or time sheets. The payroll department serves an intermediate accounting function between the time-keeping by employees and the overall analysis of the cost accounting department.

The following are the main functions of the payroll department in a company:

  1. Computing employee wages and rates.
  2. Preparing overall departmental payroll summaries.
  3. Maintaining individual employee payroll records for tax purposes.
  4. Calculating payroll taxes, deductions and other related payroll liabilities such and FICA and social security.
  5. Providing reports for management on how employees are using their time. 

The responsibilities of the payroll department regarding labor costs in a manufacturing company are:

  1. Maintaining a record of the job classification, department and wage rate for each employee assigned to a particular department.
  2. Verifying the amount of time each worker as shown on the daily time cards.
  3. Computing wages earned by each worker in each department. 

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