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Payroll and Payroll Taxes - Step by Step


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Setting Up Your Payroll Records

After you have completed your payroll calculations, including withholding, deductions, and payroll tax amounts, after you have paid employees, you next task is creating payroll records.

Create an Employee Earnings Record
For each employee, you must keep detailed records on what you paid, what you deducted and withheld for taxes and optional deductions. You must keep a running year-to-date record and be able to show these records to payroll auditors. Yes, you have to keep these records for the entire time an employee is with your company.

Create a Payroll Register
In addition to creating an individual earnings record for each employee for each pay, you must total all categories and include them in a payroll register, accumulating these totals for tax payments and reports.

Of course, you don't have to create these records manually. If you have payroll software as part of your accounting system, these records are created manually. Then you just need to be aware that these records are available.

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