Payroll refers to the process of calculating and distributing employee compensation for work performed during a specific period. It includes wages, salaries, bonuses, commissions, and deductions such as taxes and benefits. Payroll is a critical function for any business, ensuring employees are paid accurately and on time while meeting all legal and tax obligations.

The payroll process typically involves:

1. Tracking employee hours or salaries.

2. Calculating gross pay based on hours worked or salary agreements.

3. Withholding deductions, including income tax, employment insurance (EI), Canada Pension Plan (CPP) contributions, and other benefits like health insurance or retirement plans.

4. Issuing net pay to employees, either by direct deposit or cheque.

5. Remitting taxes and other withholdings to government agencies.

Payroll can also include managing vacation pay, sick leave, and statutory holiday pay. In Canada, employers must comply with both federal and provincial labor laws regarding payroll, minimum wage, overtime, and recordkeeping.

Efficient payroll management is essential to maintain employee trust, ensure legal compliance, and avoid costly penalties. Many businesses use payroll software or outsource to payroll service providers to streamline the process.

In summary, payroll is a fundamental business function that supports employee satisfaction and regulatory compliance.