Payroll is an important aspect of any successful corporation. As an employer, you’ve got the responsibility to make sure your employees are salaried on time and correctly. From keeping track of your workers’ working hours to calculating earnings, your finance team can be overwhelmed. If you’re in search of a payroll solution tailored for small businesses, feel free to explore our offerings by visiting here for a streamlined payroll process. And that’s where Germany payroll services come into play.

These services involve automated payroll systems, meaning you don’t need to complete each step manually. The difference between an instinctive, efficient payroll system and one that leads to errors is understanding the costs associated, the payroll system’s methodology, how to find a top-notch software solution and how to set up the system.

Read on to discover how a payroll system works and the stages involved.

What’s a Payroll?

It’s vital to start with the basics. A business owner is responsible for various things, including distributing wages to employees, making medicare taxes, and withholding taxes, among other benefits.

Business owners can decide the period between successive salary payments, which can be weekly, semi-monthly, and monthly or follow a unique schedule. They can also decide to have a fixed or hourly salary.

The payroll process includes all these important decisions. While some businesses still accomplish these responsibilities manually, payroll systems allow employers to offer them quickly and with fewer mistakes. Below you’ll find a breakdown of the payroll process.

What’re the Stages of Payroll?

The payroll process includes three key stages: pre-payroll, payroll processing and post-payroll.


Pre-payroll involves breaking down all tasks to complete prior to the real payroll. Policy creation is one of the pre-payroll responsibilities. A business needs to develop a detailed policy for different things like absences, payments, benefits and salary periods.

Data collection is another important pre-payroll responsibility. To collect data, business owners must interact with all departments and, in some cases, with workers. The collected data must be accurate and verifiable before making payroll payments. Outsourcing these duties can help you reduce the effort and time spent.

Payroll Processing

Once you have an excellent payment policy and correct data, it’s a perfect time for the real payroll process. Enter the data into your payroll system, which will generate net pay. The system generates the net pay just after calculating all deductions for taxes, and benefits, among other things. Be sure to check for errors before distributing the salaries to employees.


Legal compliance is a vital part of a successful payroll system. The payroll system administrator is responsible for sending the correct amount to all authority organisations. Remember, the payment processing steps differ depending on the type of employees, which include independent contractors and full-time workers.

For independent contractors, the payroll can include many payment choices but limited tax filing processes. With independent contractors, you don’t need to worry about time cards and pay stubs.

How Payroll Works

Running a payroll is simple; you just need to understand all components and have the required data and documents. A typical payroll includes these steps:

  • Define payroll procedures and policies
  • Gather necessary worker documents
  • Compute gross pay based on benefits and hours
  • Compute deductions and net pay
  • Distribute wages
  • Maintain records

Final Thoughts

If your business is expanding, or you don’t have a highly skilled or dedicated human resource department, using payroll services is the best way to go. The best payroll services will take over some HR tasks and tax filings, among others. Be sure to find a reputable payroll service provider.