A payroll register is a spreadsheet that lists the total information from each payroll. Total gross pay, the total of each type of deduction, and total net pay are set out in a payroll register. The calculations for each individual employee for total gross pay, withholding and deduction amounts, and total net pay are set out in an employee earnings record, and the totals from all employee earnings for the pay period are the source of the totals in the payroll register. A payroll register is usually part of an online accounting software package or online payroll application. The information in the payroll register is used to help you with several important payroll tax tasks:
- Making payroll tax deposits
- Submitting quarterly payroll tax reports to the IRS on Form 941
- Providing annual wage and tax reports to employees and to the Social Security Administration
What Does a Payroll Register Include?
You must keep a record of totals for all employees for the following:
- Total gross wages, total Social Security wages (up to the maximum for each employee each year), and total Medicare wages
- Totals withheld from employee pay for federal, state, and local income taxes
- Totals withheld for the employee share of Social Security and Medicare
- Totals withheld for all optional donations, such as charitable giving, union dues, and others
In addition, you must set aside an amount equal to the total Social Security and Medicare deduction.
Creating Payables From the Payroll Register
Payables are amounts that are owed by your company to others, but which have not yet been paid. The total for each category for each paycheck creates several payables that are owed to federal and state (and sometimes local) agencies.
When you create a payroll (all the payroll checks), you must set aside money for the following payables:
- FICA tax: (Social Security and Medicare) withheld from employee paychecks and payable by you as the employer
- Federal income taxes: withheld from employee paychecks
- State and local income taxes: Withheld from employee paychecks
- Federal unemployment tax payable: The amount of federal unemployment tax your business must pay, annually or quarterly, based on total employee gross wages for all payrolls during the period
- State unemployment tax payable: The amount of state unemployment tax your business must pay based on the total employee gross wages for all payrolls during the period
- Payables for other voluntary deductions: This includes United Way, 401(k) deductions, and the employee portion of health plan costs
If you have deducted money from employee paychecks for such items as health insurance premiums, charitable donations, or qualified retirement plans, you must account for these totals and create payables for each so you know how much to pay at the appropriate time.
Completing the Payroll Register
You will need a payroll book or register, which you can get from an office supplies store. You will also need a federal tax booklet and a state tax booklet that you can get from the federal courthouse.
Fill out the first part of the payroll book or register. This information is the employee’s full legal name, which is used on their annual tax filings, and their residency. Enter R for resident or NR for nonresident of the state where the income is paid. Fill in the rest of the employee information.
Next, put a line through any of the days listed that your business is closed. The days labeled in boxes across the top of the page start with Sunday and go through Saturday. Record the total number of hours each employee works for each day of the week and calculate their total hours and overtime. Using their pay rate, calculate the total pay earned.
Use the appropriate formulas, federal income tax tables and state income tax tables to calculate payroll deductions. Deduct Social Security, Medicare, U.S. withholding, and state withholding amounts plus any other amounts withheld in the state you have your business.
Total the deductions and subtract them from the total pay earned. Write the employee a company check for the amount earned after taxes and record that amount in your payroll book.
The IRS Form 941 is filled out and mailed quarterly for most small businesses. Payroll registers can make the 941 filings easier because all calculations have already been completed and recorded.