When processing payroll, there are several steps that require money movement. This includes, but is not limited to, employer debits, worker payments, and tax payments. Here we explain the most common types of money movement.
Employer debits represent the total cost to be withdrawn from the employer account to cover worker payments, tax payments, and any reimbursements.
Worker payments represent the earned pay a worker is to receive, usually in the form of a direct deposit, paper check, or sometimes cash. Employers determine the method of payment for their workers. We quickly define each below.
Direct deposit – automatic movement of funds from the employer bank account directly into the employee bank account for wages earned
Paper check – physical paper check for wages earned
Cash – cash payment for wages earned
Tax payments represent the various types of taxes that must be paid (e.g. federal income tax, state income tax, local income tax, social security and Medicare taxes, etc.)
Paying and filing taxes can be quite complex and confusing. Salsa ensures all employers remain compliant by withholding and submitting all payroll tax payments on their behalf.