Payroll typically refers to the compensation awarded to employees for their work at a company. This includes salaries, wages, benefits, and overtime. Recorded as an expense, payroll is often one of the largest expenses a company has.
Keeping an accurate record and ensuring payroll is operating smoothly is of utmost importance for most companies. For this reason, companies often outsource payroll, meaning they utilize a third-party payroll service to handle payroll matters. Other options for managing payroll are to handle it manually, in-house, or through the use of payroll software.
Depending on context, individuals often define payroll in different terms. A broader payroll definition includes the actual department in charge of employee remuneration and may refer simply to a company’s list of paid employees or the records of such compensation.