DEFINITION of 'Payroll'

The sum total of all compensation that a business must pay to its employees for a set period of time or on a given date. Payroll is usually managed by the accounting department of a business. Small-business payrolls may be handled directly by the owner or an associate.


Payroll can also refer to the list of employees of a business and the amount of compensation that is due to each of them. Payroll is a major expense for most businesses and is almost always deductible as such.

Payroll can differ from one pay period to another due to overtime, sick pay and other variables.

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  1. What impact does a higher non-farm payroll have on the forex market?

    Traders are constantly monitoring various economic indicators to identify trends in economic growth. Some of the most watched ... Read Full Answer >>
  2. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  3. Do prepayments provide working capital?

    Prepayments, or prepaid expenses, are typically included in the current assets on a company's balance sheet, as they represent ... Read Full Answer >>
  4. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  5. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  6. How do dividends affect the balance sheet?

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