A payroll register is a record of payroll information for each employee in a given pay period, typically showing items like hours worked, gross pay, deductions, taxes, and net pay.
Payroll registers help employers reconcile payroll transactions, particularly when it comes to running internal audits and filing taxes. They help ensure your financial documentation is accurate and ready for year-end reporting.
Here’s what you need to know about creating a payroll register and why it matters for keeping your business running smoothly.
A payroll register is a comprehensive list of all compensation payments to employees and contract workers for a specific period, such as a week or a month. The payroll register includes the name and identification number (typically a Social Security number) of each person, along with details such as hours worked, gross wages, deductions, taxes withheld, and net pay.
The register keeps all relevant payroll information in a single repository, making it easier to calculate taxes and comply with federal, state, and local laws. Businesses rely on payroll registers as detailed records should they face audits from the Internal Revenue Service or other regulators.
Maintaining an accurate payroll register is an organizational tool for ecommerce companies, which often have people working in remote locations, in different time zones, and with varying pay rates among salaried managers, hourly warehouse staff, customer support teams, and independent contractors.
An accurate payroll register keeps payroll processing efficient: It helps you pay workers on time, remit withheld taxes on schedule, and fund contributions to retirement plans and other employee benefits. Without accurate employee pay records, you risk incorrect or delayed wages and missed tax deadlines, which can violate regulations and result in fines.
Very small businesses may not need to keep a payroll register, but any company with an annual gross sales totaling $500,000 or more (with some exceptions) must adhere to the federal Fair Labor Standards Act (FLSA). This includes keeping payroll records for a minimum of three years, as well as meeting minimum-wage and overtime-pay rules. A payroll register is one way to maintain these records.
FLSA also applies to any business conducting interstate commerce by moving goods or delivering services across state lines. State laws also may apply, though they can vary. For example, some states permit monthly pay frequency, while others require businesses to pay employees weekly or at least twice a month.
Payroll registers and payroll journals are not the same, although both hold data on employee wages. A payroll register is highly detailed, containing specific personal and confidential information about each individual employee or contractor, such as Social Security numbers, home addresses, and deductions. For this reason, access to payroll registers is usually limited to authorized company employees, such as the payroll manager or designated executives.
A payroll journal is a general summary of employment costs, companywide or by department. Managers may use aggregate data from payroll journals along with other data from the business’s general ledger to compile financial reports such as the income statement and cash flow statement. Payroll journals are usually less confidential and typically are accessible to accounting teams and managers who need to review payroll expenses.
Businesses typically include the following information on their payroll registers:
Beginning and end dates of pay period, whether weekly, monthly, or some other time period.
The date when employees are paid, usually a few days after a given pay period ends.
The name provided by the employee when hired. Independent contractors may be listed in a separate category in the register because the employer doesn’t withhold taxes or make deductions from their pay.
An hourly wage rate for hourly workers, and overtime or holiday pay rates, if applicable. Salaried employees typically receive pay as a share of their annual compensation; for example, a salaried employee paid weekly would receive 1/52 of their annual salary. For contractors, pay rates are negotiated based on the work or service performed.
This is the total pay for hourly or salaried employees before any tax withholding or payroll deductions.
Contractors receive this gross amount because businesses make no deductions for taxes. Contractors are responsible for paying their own taxes.
Employers usually withhold federal, state, and local income taxes from employee gross pay. Employers also withhold employee payments of their portion of federal payroll taxes for Social Security and Medicare, also known as FICA taxes (Federal Insurance Contributions Act). Some payroll registers may also list the employer’s matching portion of payroll taxes, as well as unemployment insurance tax in applicable states, but companies are not required to include them in the register.
Employees may opt to contribute some portion of their gross pay to a retirement account, such as a 401(k) plan, or a health savings plan. Contributions are typically pretax deductions from gross pay.
A company may offer some matching contribution to the retirement plan, or other benefits such as health insurance and health savings accounts.
This is the amount the employee will receive for the pay period, after all deductions.
This information appears on a pay stub or direct deposit stub, summarizing gross pay, deductions, contributions, and net pay.
Creating a payroll register involves several steps that will help you keep an accurate record of workforce data and send proper pay to each employee:
Choosing how often to process payroll (e.g., weekly or monthly) determines how frequently the payroll register is updated.
This includes compensation, employee ID numbers, federal and state W-4 tax withholding forms, pay rates, and attendance and/or hours worked.
Input the various payroll data points, such as hours worked, pay rate, and deductions, into the payroll register template and calculate each employee’s gross pay.
Determine the taxes each employee owes and if voluntary deductions apply.
Find each employee’s take-home pay based on gross wages, taxes, and deductions. Net pay will appear on the paycheck, direct deposit stub, or other pay form such as a paycard.
Review the register to verify employee information and catch errors. Typically, the business owner or a manager does this before issuing paychecks or electronic pay deposits. Managerial review ensures oversight of a business’s payroll and can catch errors before payments are sent.
Periodic reconciliations or audits help ensure accuracy by comparing the register to paychecks and employee pay stubs.
Deposit and remit total employee withheld income and payroll taxes on time, usually quarterly or annually. At the end of the year, use the payroll register to complete the tax forms you send to employees (the W-2 and W-3) and non-employee contractors (the 1099-NEC).
You can build and maintain a payroll register manually with spreadsheets, but businesses generally use payroll software that includes a payroll register template. Programs like ADP Payroll Service, QuickBooks, and Paychex are targeted at small businesses.
Before beginning a register, get an employer identification number (EIN) from the IRS, and any other tax IDs required by your state or local government. Enroll in the Electronic Federal Tax Payment System (EFTPS) for online remitting of taxes. Register for state unemployment insurance and workers’ compensation coverage. Finally, open a dedicated payroll bank account to keep payroll funds separate from operating funds.
A payroll register is the central repository for information about a business’s employees and contract workers, how and when they are paid for their work, taxes withheld from their pay, and any deductions from their pay for benefits. A payroll register is an essential tool for a business to keep track of its payroll expenses and to comply with various regulations.
First, correctly classify workers, such as full-time employees or contractors, and collect the right forms such as W-4 and state forms for income tax withholding. Then, build a register by tracking time worked and gross pay for each employee, then apply any deductions for employee benefits or tax withholding, calculate net pay and issue checks or direct deposit stubs. Record the payroll in your accounting system and reconcile frequently against bank statements and tax payments.
Payroll managers, accountants, human resources staff or other employees authorized to access confidential employee data typically prepare and manage a payroll register. For a smaller business with relatively few employees, the owner might prepare it using spreadsheets or an inexpensive payroll software program. Larger companies likely will find it necessary to use more sophisticated payroll software or outsource payroll functions to a third-party provider.
