The employee's gross pay is a predetermined amount of money and is generally expressed as being earned on an hourly, weekly, bi-weekly, semi-monthly, or monthly basis. Gross pay is the total amount earned, before taxes, insurance, and other deductions for the particular payroll period. The amount of pay the employee actually receives after all the deductions, such as those for income tax, social security, and pension contributions, is known as take-home pay or net pay.
This package — i.e., the take-home pay — is arrived at by subtracting certain standard deductions from the gross pay, deductions which consist of various regulatory obligations that employers are required to withhold from employees’ pay on a regular basis. Thus, while an employee tends to gauge his or her salary in terms of the paycheck received at the end of a particular month, there is much more to payroll jobs than just the take-home package.
Nowadays, with the ever-increasing demands made upon payroll departments to perform more tasks in less time without neglecting compliance or their companies’ employees, it is crucial for today’s payroll professionals to look for better and faster ways to process the multiple payroll cycles that they are responsible for managing. The effectiveness and competence of a payroll department are based on several factors, but a vitally important one that payroll managers tend to ignore is training.
Whether a company makes cars, provides wireless services, or delivers freight, it may feel that it has more important things to spend time on than payroll transaction processing, especially when such an administrative task is seen as adding little value to the products or services the company creates and sells. However, human resources efforts can and indeed do add value to an organization by leveraging the human capital used to gain and sustain competitive advantages.
It is hard to exceed expectations in this area, but easy not to meet them. Most managers simply presume that new recruits in payroll jobs have gained all the knowledge they need to do their jobs through prior academic and work experiences, and therefore require no additional training of any kind. This notion appears to be based, however, on a wholly erroneous assumption that no matter where employees work, all payroll jobs are the same and payroll professionals can easily transition between organizations with no further training. In truth, there are many reasons in favor of a comprehensive and extended training program for payroll jobs encompassing such areas as computer-specific software knowledge, process training, general management training, training for advanced positions, and payroll regulation changes.
Sources:
Peter J. Eisen. Accounting the Easy Way
William W. Pyle, John Arch White, Kermit D. Larson. Fundamental Accounting Principles
Steven M. Bragg. Accounting for Payroll: A Comprehensive Guide
