What is a Payroll Report: Functions and Usage

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What is a Payroll Report Functions and Usage
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• Payroll Reports are essential for any
  organization since it serves in improving the
  overall organizational efficiency as well as
  helping maintain compliance. Payroll reports
  provide the organization and the HR team with
  vital information regarding their employees and
  their payroll, which helps them make informed
  decisions.
•  
• Payroll reports are also an essential component
  of company audits as it provides the financial
  details of the organization with respect to the
  employees in the company. These reports provide
  the relevant information for Income Tax audits,
  making them an essential part of compliance
  handling.
•  
• Hence, let us learn about its functions and usage.

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What is a Payroll Report?

• Payroll Reports are documents generated to
  provide financial details of the company for a
  specific pay cycle. It includes various
  information related to the finances of the
  company, such as the pay rate, total number of
  work hours, the TDS deducted from employee
  salary, and more.
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• There are various kinds of payroll reports
  generated by the accounts and HR departments for
  different purposes. While some of them are
  generated for filing with the state agencies,
  others are developed for internal usage of the
  company. Nowadays, payroll reports are generated
  with the help of dedicated payroll and HRMS
  software, which ensures accuracy while providing
  updated information.

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Payroll Report vs. Pay Statement vs. Payroll
Summary

• There is a common confusion between a payroll
  report, a pay statement, and a payroll summary,
  as they are quite similar in usage. However, all
  three of them serve different purposes.
• Let us look at what each of them is used for and
  understand how they are used differently
• Payroll Report
• As explained above, a payroll report is used to
  provide specific payroll-related information to
  the state and law agencies, such as the Income
  Tax department. These reports are also used to
  store accurate payroll information for internal
  usage by the company too. 
• Pay Statement
• The pay statement is a report which provides
  crucial information related to an employees
  salary, which provides the bifurcation of their
  salary structure into its components such as net
  pay, taxes, other deductions, etc. It is
  generated for sharing with the employees, as it
  helps them understand their earnings better.
• Payroll Summary
• A payroll summary is an overview of the total
  payroll data for a given period. Being a summary,
  it consists of a birds eye view of the payroll
  data and lacks in-depth details. One must note
  that it consists of all information related to
  the payroll of the employees, such as overall
  wages paid, taxes deducted, etc. without getting
  into the details of the same.

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Advantages of Payroll Report

• Generating a payroll report has multiple benefits
  for both the employer and the employees of an
  organization. Some of the most common advantages
  of a payroll report are
• Efficient Tax Calculations
• Calculating employee payroll and the associated
  taxes takes a lot of productive time for the HR
  department. However, if they can generate payroll
  reports with the help of dedicated HRMS or
  payroll software, the process becomes easier and
  streamlined for the team. It results in accurate
  taxes calculations and on-time payments,
  resulting in fine avoidance.
• Easier Budgeting
• With the help of payroll reports, the HR and
  accounts team can easily determine the cost of
  paying employees, which helps in better budgeting
  for the future. It also helps in accurately
  predicting the expenses for the next salary cycle
  or even the next quarter, making it a must-have
  tool in the HR arsenal.
• Track Different Metrics
• Payroll reports also provide HR with actionable
  insights over various aspects of payroll such as
  salary components, paid time offs taken,
  expenditure on additional benefits, rewards, and
  more. Tracking these metrics will help the HR
  team in making necessary changes for better
  employee engagement and retention.

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  report-functions-and-usage/

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