2.1 Background of the study
Payroll encompasses every employee of a company who receives a regular wage or other compensation. It is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. Some employees may be paid a steady salary while others are paid for hours worked. All of these different payment methods are calculated by a payroll specialist and the appropriate paychecks are issued. By law, employers are required to pay employees for their services rendered; through the payroll system, the processing of this payment is possible. There are several ways on how to process a payroll. Payroll processing is one of the many aspects of the company’s operation wherein the advancement in technology can be applied. It involves various steps such as monitoring of time-in and time-out of employees, determining the amounts due to each employees and withholding parts of it, intended for payroll taxes, employee benefits and loan. Organization which have very few employees performs payroll manually while multi-national organizations which have become too large to perform such manual task uses software, or integrated modules to perform the task.
The manual payroll system requires payroll processing to be done completely by hand. Therefore, time card, wages and payroll tax computations; wage garnishments; and deductions are done manually. Furthermore, paychecks and pay stubs are handwritten or printed on a typewriter. The main disadvantage with this system is it is high room for error. The more manual computations the payroll representative has to make, the more errors she can possibly make. Furthermore, it is time-consuming because to ensure the payroll is accurate, she has to triple-check the data before printing checks. Even then, it is also possible to miss errors. Paper filing is required with this system, which can create clutter. It is likely that numbers of problems occur. So it's no surprise