A payroll service refers to the outsourced process of managing and administering an organization's payroll tasks and responsibilities. It involves the calculation, processing, and distribution of employee wages, salaries, bonuses, and deductions on a regular basis. Payroll services are typically offered by specialized companies or service providers who handle the intricate details of payroll management, ensuring accuracy, compliance, and timeliness.
ABC Company decides to outsource its payroll functions to a payroll service provider. The payroll service provider collects employee time and attendance data, calculates wages, deducts taxes and other applicable deductions, and generates paychecks or direct deposit transactions. They also handle payroll tax withholding, file tax reports, and provide online access for employees to view their pay information and download tax forms.