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What is a payroll register?

Sunday, December 28, 2014

Juggling all the aspects of the payroll process can be one of the most overwhelming aspects of running a small business. Manually balancing and aggregating your employees’ wages and personal information can be a time-consuming task that detracts from time and energy spent elsewhere. In addition to keeping track of hours worked, you also need to keep meticulous records for taxes, compliance with state and federal laws, and business analytics. 

A payroll register is a valuable tool that records employee wage information for each pay period and pay date. It’s useful for record-keeping in a business and has legal implications if not kept correctly.. A summary of all payroll activity is an excellent way to look at the payroll register report. It differs from other reports, such as a paycheck history report or a payroll details report. 

Modern payroll registers are an invaluable resource for small business leaders and professionals. With the accuracy and efficiency of a payroll register, you can save time and relieve yourself of the stress of diligent manual bookkeeping. Read on to learn more about what a payroll register can accomplish for you and your business.

Information in a payroll register

Typically, a payroll register will list the following information for each employee:

  • Name
  • Pay period
  • Pay date
  • Regular hours
  • Overtime hours, if applicable
  • Pay rate
  • Federal, state, and local income taxes
  • The employee portion of Social Security and Medicare taxes
  • Other deductibles, if applicable
  • Gross pay
  • Net pay
  • Employer contribution to benefits
At the end of your register, you’ll be able to view cumulative information for all employees during the time period you’ve selected. Depending on the flexibility of your software, you may be able to adjust the period you’re looking at, giving you a better overall look at your payroll accounting and expenditures. 

What kind of things do you use a payroll register for?

Payroll has many moving parts and can be complicated for even the most clear-cut business. However, a payroll register is a practical way to store and collect data whenever you alter an employee’s wages, calculate taxes, or write payroll checks. Simply put, payroll software is an automated checkbook that will balance employee wages and tax reports such as FICA taxes and Medicare taxes for each pay period.

When using payroll software, you can also adjust the period you’re looking at. For instance, you might want to pull up data for an entire quarter, month, or only a week. 

A payroll register can also store relevant payroll data from each pay period, including sick days, deductions, and paid time off, making it easy to compare individual employees’ paychecks. You can also keep track of cumulative statistics for your employees, for example, the total overtime worked by your employees during a set period. 

IRS Form 941

As a small business owner, you’ll likely be filing an IRS Form 941. This form is one of the forms that employers use to report their employees’ federal income, Social Security, and Medicare taxes withheld from their wages. The IRS will compare your 941 Form with your annual W-3. Form 941 must be reconciled quarterly. 

A payroll register can help you prepare for your quarterly reconciliation of Form 941 by aggregating all the information you need to make these payroll deductions. Compare the information on your payroll register with the data on your Form 941 for the quarterly period. You’ll want to pay particular attention to total compensation paid to employees, Federal income taxes withheld, taxable social security wages and tips, and the number of employees who received wages or tips during the quarter. 

Employee salary verification requests and certified payroll reports

At some point, you’ll likely be asked to verify an employee’s salary, which is most straightforward with a payroll register to simplify this process. A payroll register summary for an employee might look similar to an employee’s pay stub and includes much of the same information. Viewing an employee’s earnings on a payroll register makes writing a salary verification letter simple. 

Government contractors working on federally funded projects may be required to submit weekly certified payroll reports using Form WH-347. Utilizing your payroll register is a painless way to ensure the accuracy of your numbers on this form. 

Calculate funds needed for 401K contributions, bonuses, operating expenses, and more

In addition to outlining net pay and tax withholdings, a payroll register can help you keep track of your employer contributions to benefits. These can include 401K contributions and employer contributions to payroll taxes such as Social Security and Medicare. 

Your payroll register can also be an asset when calculating bonuses and salary increases for your employees. By conveniently managing all of your employee payroll information in one place, the process of preparing for performance reviews or annual salary increase negotiations can be more streamlined.

Payroll budgeting is also bolstered by tracking your payroll records with a payroll register. While employee salaries won’t make up the entirety of your budget, they represent a significant portion. By using the data collected in your payroll records, as well as forecasting techniques, you’ll be one step closer to planning your business’s budget.

Difference between a payroll register and a payroll history report?

Several payroll reports feature your employees’ earnings and gross wages. A payroll register and payroll journal may seem to contain similar information, but the most significant difference is the level of detail and confidential information included. 

A payroll journal lists the total amount spent each time your company processes payroll, while a payroll register displays specific sums and contains individual employee information. Because the payroll register displays sensitive employee information such as social security numbers, access to this should be limited to payroll employees. In contrast, the payroll journal can be accessible to your accounting employees. 

A payroll history report is more specific than a payroll journal and payroll register. This report focuses on one particular employee and shows the total earned for a pay period. A payroll history report can be given as a pay stub, while a payroll register can’t serve this purpose.

Why a payroll register is important for legal reasons

Now that we’ve outlined the purpose and scope of the payroll register, what are the legal implications? Apart from tracking employer taxes and reconciling your budget, a payroll register may be something that you’re legally required to keep.

The Fair Labor Standards Act (FSLA) mandates that employers keep a payroll record for three years, at a minimum. These payroll records must include the following information:

  • Employee name and social security number
  • Employee address
  • Employee birth date (if younger than 19)
  • Occupation and sex
  • Day employee work week begins
  • Hours worked each day and total hours worked each week
  • Wage basis
  • Hourly pay rate
  • Overtime earnings
  • All additions and deductions to employee’s wages
  • Total wages for the pay period
  • Date of payment and dates of the pay period

A payroll register will cover the payroll data legally required by FSLA. While the FSLA requires this data to be kept, they don’t mandate a specific accounting software or form for this recordkeeping. So, if you’re already keeping a payroll register, you can provide this report to satisfy the FSLA requirements, if necessary.


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