What is a payroll statement?

A payroll statement is a document listing all the details of the salaries and wages an employer pays out to its employees for a certain period of time. Here is the most common information to be found in a payroll statement:

• The list of every employee of a business

• The amount of money every employee receives in terms of gross pay and net pay

• Employee deductions for taxes

Here is a more detailed look at each component of a payroll statement:

• Gross pay

Gross pay can also be referred to as gross income, and it is the total amount of money an employer pays its employee before any reimbursements or deductions are made. Gross pay often includes the typical wage or salary, bonuses, commissions, and overtime payments.

• Pre-tax deductions

Many factors go into employee deductions. This comes from employee tax forms, federal and state requirements, insurance requirements, and employee benefits. Here are some of the most common factors in determining employee deductions for the payroll process:

• Federal taxes

• Social Security

• State taxes

• Local taxes

• Medicare

• 401(k) contributions

• Workers' compensation contributions

• Other forms of employee benefits

This is one of the more complex steps during the payroll process as states can have different policies for small businesses and companies.

• Reimbursements

Reimbursements account for the amount of money employers pay back to their employees for out-of-pocket expenditures. Reimbursements are added to payroll checks.

• Taxes

The appropriate taxes that are to be deducted from all employees are normally recorded on a payroll statement. These amounts are deducted from each employee's wage or salary and then paid to the state and/or federal government.

• Employee net pay

Employee net pay refers to the amount of money an employer pays an employee after all deductions, taxes, and reimbursements have been included. It represents the total amount of money employees receive from their employers.