payroll

noun pay·roll \ ˈpā-ˌrōl \
Updated on: 11 Dec 2017

Definition of payroll

1 : a paymaster's or employer's list of those entitled to pay and of the amounts due to each
2 : the sum necessary for distribution to those on a payroll; also : the money to be distributed

Examples of payroll in a Sentence

  1. They cut him from their payroll.

  2. He's the manager of a baseball team with a $50 million payroll.

  3. Businesses are keeping their payrolls low by embracing new technologies.

Recent Examples of payroll from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'payroll.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of payroll

1740


Financial Definition of PAYROLL

payroll

What It Is

Payroll is the total of the compensation a company pays to its employees. In the accounting world, it is also a term used for calculating and processing paychecks (as in, "doing payroll").

How It Works

On the income statement, payroll expenses are part of labor costs. They include employee salaries, employer payments for health insurance or similar benefits, payroll taxes paid by the employer, bonuses, commissions and similar expenses.

Doing payroll is a complicated process that involves ensuring that every employee is paid correctly, calculating the appropriate payroll taxes (which can vary with the employee's salary, whether he or she has hit the Social Security cap for the year, etc.), and correctly deducting miscellaneous items (such as court-ordered child support, gym memberships or 401(k) contributions).

Why It Matters

Payroll is a major expense for most companies and is the primary component of labor cost. Labor costs vary by industry, and comparing companies in different industries should be done with this in mind.

In the accounting world, doing payroll is a crucial but often thankless job. The calculations must always be accurate, the paychecks must be printed on time, new and departing employees must be added to or deleted from various processes, and the taxes must be remitted to the proper authorities on time and in the correct amount. As soon as the process ends, it begins again. Many companies outsource some of the work.



PAYROLL Defined for English Language Learners

payroll

noun

Definition of payroll for English Language Learners

  • : a list of the people who work for a company and the amount of money that the company has agreed to pay them

  • : the total amount of money that a company pays to all of its employees


PAYROLL Defined for Kids

payroll

noun pay·roll \ ˈpā-ˌrōl \

Definition of payroll for Students

1 : a list of persons who receive pay
2 : the amount of money necessary to pay the employees of a business


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