It’s payroll time, and you’ve got your wages calculated and checks sent out. All done, right?
Well, there’s still a bit more to do. As a business owner, tracking your payroll records is important for tax and budgeting purposes. That’s where the payroll register comes in handy.
Here’s a basic payroll register template you can use to keep track of your wage information. Just click "Make a copy" to get started.
Now, let’s take a closer look at this essential business tool.
What Is a Payroll Register?
Depending on your business’s size, the register may be prepared by you, your bookkeeper, or the HR department. It’s an essential tool for all business owners since it gives you a record of one of your most significant expenses—employee wages.
Because the register contains wage and tax withholding information, you can use it to help with:
- Filling out paycheck information and running payroll
- Calculating payroll tax deposits (these are the taxes you must withhold from paychecks and deposit to the IRS every quarter)
- Preparing W-2 forms for each employee at the end of the year
- Estimating wage expenses when preparing a budget
You can keep a manual register or use a spreadsheet tool like Google Sheets or Microsoft Excel to store your records. Or, if you want to simplify your payroll process even further, you can look for software like Hourly that automatically generates a payroll register report for you and syncs it with QuickBooks.
No matter which format you choose, most registers follow a similar one.
What’s Included in the Register?
The information on a payroll register includes everything you need to know about how much your employees worked and how much you paid them. Experts typically divide pay register data into four sections—pay period information, hours worked, wages, and payroll deductions & expenses.
Let’s take a closer look at the payroll details that go into each section.
- Start date
- End date
- Pay date
- Regular hours worked
- Overtime hours worked (if this applies to your business)
- Other hours used (this includes paid sick leave or paid time off (PTO) if you offer those benefits)
- Type of wages (hourly or fixed salary)
- Wage rate
- Gross pay (wage rate multiplied by hours worked, also known as total wages)
- Net pay (total wages minus payroll deductions)
Payroll Deductions & Expenses
This section includes two types of entries: deductions and expenses.
Payroll deductions are any wages you withhold from your employee’s paycheck. They can be mandatory (such as federal income tax withholdings) or voluntary (withholdings that an employee opts in to, such as contributions to a health care or retirement plan).
In short, deductions are paid for by the employee (but you do the withholding), while expenses are paid for by you and include items like employer taxes.
Here’s a list of items you may need to record in your deductions and expenses category.
- Federal income tax withheld from employee’s pay (FIT)
- State income tax withheld from employee’s pay (if this applies to the employee)
- Local income tax withheld from employee’s pay (if this applies to the employee)
- Federal unemployment tax payments, or FUTA (employer expense)
- State unemployment tax payments (employer expense, if this applies to your business)
- Portions of FICA taxes (Social Security and Medicare contributions) paid for by an employee and the employer
- Workers’ compensation payments (employer expense)
- Amount withheld for employee benefits and voluntary deductions (such as withholdings for health care and retirement plans)
- Employer’s contributions to health care and retirement plans
- Wage garnishments due (Required withholdings for employees who have not paid down a debt. This is uncommon, and you’ll receive a notification from the government if you have to garnish an employee’s wages.)
Each of these bullet points is typically recorded as a column in a spreadsheet or chart.
Tracking deductions helps prepare your payroll and calculate an employee’s net pay. On the other hand, recording expenses helps you budget your total payroll costs for each period.
If an expense doesn’t apply to you, you don’t have to include it on your register. For instance, if you’re in a state with no income tax, you don’t need that column for your records.
How To Complete a Payroll Register
Now that you know what type of payroll information you need to track, let’s look at how to do it.
The good news is that the process is quite simple. All you have to do is create a template with all the information you want to track and then fill it out for each employee when you do payroll.
Here are the basic steps to follow when creating a new record for an employee:
- Enter the employee’s name.
- Enter the pay period information (start date, end date, and pay date).
- Record the number of hours worked (including PTO or paid sick days if the employee used those during this period).
- Enter your employee’s pay rate.
- Calculate gross wages (multiply hours worked by pay rate).
- Calculate payroll deductions and enter each one.
- Calculate net pay (subtract all deductions from gross wages).
- Record all employee-related employer expenses for this period.
Repeat this process for each employee on your payroll. Let’s look at an example to see these steps in action.
Payroll Register Example
Imagine you own a food truck, and you have an employee named Amy Pond. In this example, we’ll use our payroll register template and prepare an entry for Amy based on the following information.
- Amy works part-time and earns $12 per hour
- You use a biweekly pay schedule
- For this period, Amy has worked a total of 50 regular hours
- Her deductions include: Federal Income Tax (FIT), Social Security tax (SS), and Medicare tax
- Your payroll expenses for her are Social Security tax (SS) and Medicare tax
Let’s start by entering Amy’s name and the pay date information (we’ll make it the first payday of the year), followed by our given information—the hours she worked and her pay rate.
Now that we have her pay rate and hours worked, we’ll use that information to calculate the rest of the table and fill out each amount along the way.
Once you fill out the table, it will look like this:
The information in the register is all straightforward, but it can easily become a tedious task to fill it out (especially if you have more than one employee).
However, if you use payroll software like Hourly, you don’t have to do any of this work manually. Hourly automatically keeps track of the payroll data for each person on your team.
Now that you’ve got an example, we’ll cover some frequently asked questions about the payroll register.
Are the payroll register and payroll journal the same?
Your payroll register is not your payroll journal. However, they are similar in that they both record wage information.
The payroll register includes information broken down for each individual employee. Your payroll journal, on the other hand, includes company-wide payroll figures.
So, you would record the total hours worked, total wages paid, and total payroll deductions for all employees on the payroll journal. In other words, the payroll journal is like a summary of the information on your register.
How do I prove a payroll register?
Once you finish preparing your register, you need to ensure that the information is accurate. This process is a part of payroll accounting known as proving your register, which means verifying that your calculations are correct.
Payroll errors can include mistakes such as deducting the wrong amount for employee contributions or miscalculating overtime hours.
To prove the payroll register, add up the totals for gross pay, deductions, and net pay. Then it’s time to do some double-checking. Make sure that your total net pay equals total gross wages minus total deductions.
How long should I keep payroll records?
Make Payroll Recordkeeping a Cinch
A payroll register is a valuable tool for any small business owner. It helps you run payroll accurately, budget for expenses, and fill out tax forms like W-2s.
The good news is that you don’t need to be a rocket scientist to prepare and maintain a payroll register. All you need to do is set up your template, fill it out, and double-check your calculations.
Now that you know how to prepare and use your payroll register, break out those spreadsheets and get started! (Or make it even easier by using software like Hourly, which keeps the records for you.)