While you can certainly do this by hand using a calculator, there are faster and better ways to get the job done. Tallying up hours for each employee at a larger business simply isn’t a good use of your time. When the time comes to pay your employees for their hard work, having an organizational process in place is key. You want to be sure you’re paying them for the correct number of hours and also that you’re keeping track of the organization’s payment history. For easy planning, create a payroll schedule showing all twelve months of the year. You can modify this simple PDF calendar to match biweekly, weekly, or monthly pay periods.
Payroll automation will handle things like withholding federal income tax from employees’ wages, so you don’t have to figure it out on your own. Not only will this make things easier for you, but you can also enjoy peace of mind knowing that you’re complying with IRS regulations and tax laws. Setting up a payroll format in Excel beats having to do payroll manually using a calculator to compute the applicable salaries, taxes, and deductions. The last tab, titled “Year-to-Date Payroll,” in our payroll Excel template lists all your employee payroll details for the year. It’s linked to the monthly payroll tabs, so all employee payroll expenses should be reflected. If you decide to provide pay stubs—some states require you to do so—this tab will give you the YTD information you need to fill them in.
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A payroll automation software saves you time on tasks including filing taxes, processing direct deposits, generating payroll reports, and calculating tax withholdings. All of these processes would take much longer to do without payroll automation. You can leave payroll to the automation software and focus your efforts payroll automation on business growth. Benefits are reflected in column R on each monthly payroll tab, which sums all premiums showing in columns I through L on the “Set Up Employee Data” tab. The amounts should be fixed from one pay period to the next, but you can update the amounts in the “Set Up” tab if they ever change.
There’s only one “Other Deductions” column in the 13 payroll tabs, and the data that reflects here is the sum of columns N and O in the “Set Up Employee Data” tab. If you need to add more columns for deductions in the “Set Up” tab, follow the directions https://www.bookstime.com/articles/how-to-calculate-salvage-value above for adding columns. Assign a timesheet to each employee, and have them fill out the time in and time out each day. Enter formulas in the mini payroll calculator to have it generate the total number of hours worked per week automatically.
Simplify Payroll and Build Efficient Processes
You will receive an instant payslip within seconds along with your company logo. In addition, your employees can receive their salary slips on their mobiles as well as on WhatsApp. Once you’ve saved your template, you can begin to use the spreadsheet monthly or weekly as per your payroll needs. You can use one file with various spreadsheet tabs (one for each pay period), or you can copy and re-use the template each time. In this case, you may want to add additional columns to be able to include and specify the various deductions. Some may be best calculated using formulas similar to those for income and social security tax.
Keeping accurate records is a vital aspect of payroll management. This matters not only for a company’s own reference, but also for meeting federal and state requirements. Keeping precise records can also protect employers and employees, providing documentation to help prevent legal issues and resolve conflicts. Repeat the above steps for total overtime hours, gross pay, income tax, other deductibles, and net pay. Kickstart your automated payroll system by designing a comprehensive template. Include all necessary information such as employee details, hours worked, pay rates, taxes, and deductions.