You might already know this, perhaps that's why you searched on Google, but payroll is a central concept in business management. It measures the total cost of employees and plays a key role in financial and strategic decisions. In this article, we explain in detail what payroll is and why it is so important.
According to INSEE, payroll is "the sum of gross wages paid by a company to its employees during an accounting period". In other words, it includes basic salaries, bonuses, and employee contributions, but excludes employer contributions and benefits in kind.
Gross payroll represents the total remuneration before any deductions for employer social charges. This includes gross salaries, bonuses, and employee contributions. It is often used for internal decisions concerning personnel cost management.
Loaded payroll includes, in addition to gross payroll, employer contributions and other charges. It provides a complete view of the total cost of employees for the company, which is useful for financial analysis and budget planning.
Payroll is a valuable tool for managing personnel costs. It allows companies to plan their budget, optimise their human resources, and make informed decisions about salary increases and hiring.
Payroll is also used to calculate various taxes, such as the apprenticeship tax and the contribution to vocational training. Additionally, it is important for sectoral and regional statistics, helping to compare performances between different companies and sectors.
Calculating payroll is quite simple: it involves adding all gross remuneration and bonuses paid during an accounting period. For example, if a company has paid €1 million in gross salaries and €200,000 in bonuses, its annual payroll will be €1.2 million. To go further, we have detailed the payroll calculation methods in this article.
Some companies may include or exclude specific elements in their payroll calculations. For instance, accounting payroll includes employer contributions and paid leave, while budget payroll may include severance pay without employer contributions. For concrete examples, see our article: Practical Examples of Payroll Calculation.
The number of employees directly influences payroll. The more a company hires, the higher its payroll. Conversely, employee departures reduce payroll.
Salary increases and bonuses paid to employees also affect payroll. Each salary review or bonus policy can significantly alter this cost.
Changes in legislation and fiscal regulations can impact payroll. For example, an increase in employer contributions will raise the loaded payroll.
Payroll is a crucial element of business management. By understanding how it is defined, calculated, and used, you can better manage your personnel costs and make strategic decisions to ensure the financial health of your business.
We hope this article has been helpful. Feel free to share your questions or comments! 🙂