Payroll records and reports are important for accurately tracking and managing employee salaries and wages, as well as for compliance with government regulations. These records and reports include:
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Employee earnings record: A detailed record of an employee's earnings, deductions, and net pay for a specific pay period.
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Payroll sheet or register: A summary of the payroll for a specific pay period, including the total amount of salaries and wages paid, taxes withheld, and other deductions.
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Journal entries: Accounting entries made in the general ledger to reflect payroll transactions, such as the payment of salaries and wages and the withholding of taxes.
Employers are required by law to maintain accurate payroll records and prepare reports for submission to government units. These records must be kept for a specified period of time and be available for inspection by those responsible for enforcing the laws. In addition to being necessary for compliance, accurate payroll records can also be useful in negotiations with labor unions, settling employee grievances, and determining rights to vacations, sick leave, and retirement pensions.
