What’s the different types that Payroll Processing?
The most common methods for processing payroll include commission, salary, or hourly. commissions:
- Hourly employees have paid per hours and usually not exempt (entitled to work overtime).
- Salaried employees earn an annual or monthly salary for their work . They may exempt (not allowed to work overtime) or not exempt.
- Employees who have compensated for commissions receive directly on their performance (usually the sales) or commissions added to their base salary.
- Additionally, you’ll have to identify the employees who are exempt from tax and those that are not exempt according to the federal rules on wage and hour. Therefore hourly and salaried employees may technically be exempt from taxation or not exempt. Because the compliance with the guidelines of the Department of Labor is essential to avoid expensive penalties and fines.
Provide paper checks or direct deposit
You’ll also have to decide whether you want to provide paper checks or direct deposit, or both – taking into consideration that employees are likely to expect direct deposit upon joining your business.
In the end, you’ll need figure out how to process payroll in a way that is efficient. Payroll processing by hand is time-consuming and error-prone. Therefore many businesses employ Payroll processing services such as Paylocity. Payroll companies can show you how payroll processing works and also how to manage payroll with their service.