Using Payroll Processes & Systems

Instructor: A. Casey Carr-Jones

Casey Carr-Jones holds a Bachelor's degree in English & Psychology. She is currently a PHR-certified Human Resources Consultant.

Payroll processing is a task completed by Finance and Human Resources departments. This lesson reviews the systems and processes used to complete payroll.


Processing payroll is an integral part of company operations. Ensuring that employees receive the appropriate amount of pay and the correct taxes withheld on a certain date involves certain processes and procedures to be followed by Finance and Human Resources.


Payroll Systems

A payroll system is a type of software that can keep track of hours, calculate wages and tax withholding, calculate deductions, pay employees, and pay employment taxes to the government. There are many different brands of software that can accomplish these tasks. Software solutions vary and companies can select the best fit for their needs. Organizations should determine the best fit based on their size, cost (implementation fees and annual fees), and needs for automation versus manual systems.

Employee Adds, Terminations, and Changes

Major processes involved in the preparation of processing payroll include adding, removing, and making changes to employees and their payroll data. Once a new hire begins work, they should be added to the payroll system so that they can be paid the next payroll cycle. A payroll cycle is the frequency in which payroll is processed and employees are paid. This can range from weekly to biweekly to semimonthly to monthly.

Employee adds involve data entry for the person's name, address, tax withholding information, social security number, department, manager, rate of pay, overtime eligibility, etc. Any time that information changes, Human Resources (HR) or Payroll needs to make the appropriate changes in the payroll system.

Employee terminations involve paying out severance (if applicable), vacation time (if applicable), and the remaining wages owed. States have different laws and regulations on how quickly terminated employees should receive their final check, so HR and payroll need to be cognizant of that fact. Terminated employees should be coded as such in the payroll system so that they are not mistakenly paid additional wages in the future.

Processing Payroll and Quality Review

The person who is responsible for processing payroll varies by company. Sometimes there is a Payroll Administrator who processes each payroll cycle and Human Resources performs the data entry. Sometimes the office manager or Controller performs the work. The process is very similar regardless of who performs the work.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account