02 Jul

A company’s payroll is one of the most integral parts of the business because it highlights the salaries, wages, and taxes of all the employees that are working within the organization.

They are usually handled by the finance departments of every company and the information that is contained in the payroll should be precise at all times.

That being said, any company would always want to have payroll accounting services in Malaysia, so always get them for your business.

Today, I am going to give you a brief introduction to payroll systems to help you understand the concept better.

Process Overview

A company must always have a timekeeping system in place to accurately discern the exact hours that are rendered by both nonexempt and exempt employees. The payroll process is merely the calculation, recording, determining, and paying payroll entries- including payroll transactions, employee pay, and payroll taxes.

Employers usually withhold income tax from employee wages. Then, at the end of the year, all employers must report all of the wages and other forms of compensation that are paid to the employees in question.

It is also mandatory for employers to withhold their employees’ Medicare and Social Security contributions from their wages, in addition to matching those contributions as well.


There are some companies and small business owners that would rather do their payroll systems manually. Although this can be an inexpensive thing to do, doing it manually may create a lot of errors and will require a lot of time as well.

However, the ideal would be for employers to use a computerized system as it minimizes error reporting and can save them loads of time and money in the process.


As the name implies, this is where an employer would hire a third-party firm that will handle their company’s payroll. These firms are fully aware of how to create a good payroll and they employ systems that will help them accurately create one.

Should the employer go for this, they would give the payroll service provider some much-needed data so that they can then process the payments for the upcoming payday.

The information that will be sent will include the hours rendered by their employees, as well as their taxes, benefits, and withholding information.

Such services may also be rendered online which may give convenience to employers who already have many things on their plate.

Despite the fact that business owners can outsource their payroll processes, it is still important for them to check the resulting payroll for authenticity and integrity so that they can avoid punishment from regulatory bodies, especially when there are output errors.


There are some companies that employ the hybrid method, where they utilize both in-house and outsourced payroll services. For example, employers might handle the calculation and distribution of paychecks themselves, but the payroll service provider may handle direct deposits, tax filings, and the printing of the checks to be distributed.

This not only saves time, but it will definitely save the company some costs and expenses as well.