What Is Payroll?
Payroll (the payslip) is the official document showing the wage an employee earned in a given period, the legal deductions made and the net payment. Preparing payroll is a legal obligation for employers; for employees, it is a transparent breakdown of their wage.
Payroll that is prepared accurately and on time both ensures legal compliance and strengthens employee trust. Incorrect payroll, on the other hand, can lead to both penalties and employee dissatisfaction.
What Items Does Payroll Consist Of?
A payslip typically includes the following items:
- Gross wage: The employee's total wage before deductions
- Social security (SGK) premium (employee share): The social security deduction
- Unemployment insurance premium: The legal unemployment insurance deduction
- Income tax: The deduction calculated according to the tax bracket
- Stamp tax: A fixed-rate tax levied on the wage
- Net wage: The amount the employee receives after all deductions
How Is Payroll Calculated?
Payroll calculation is the process of reaching the net wage by subtracting the legal deductions from the gross wage:
- The gross wage is determined.
- The employee share of SGK and unemployment insurance is calculated.
- The income tax base is found and income tax is calculated according to the tax bracket.
- Stamp tax is added.
- The net wage is found by subtracting all deductions from the gross wage.
When done manually, these calculations are error-prone because of the tax brackets and legal rates that change every month.
Advantages of Digital Payroll Management
- Calculations are automated and the error rate is minimized
- Up-to-date legal rates are reflected in the system
- Payrolls are archived digitally and easily reported
- Employees can access their payslips instantly
Simplify your payroll creation and management processes and minimize errors with Yönetim İK Payroll Management. Request a free demo.
Related article: What Is HR Software? Why Should Businesses Use It?
