Creating a payroll budget is tricky. It involves breaking down your company’s payroll and calculating the total cost for each person in each role — including their wages, taxes and employee benefits. Creating a payroll budget is critical for businesses to track their overall human resources costs and run their business efficiently.
Below, we’ll explain what’s included in a payroll budget. We’ll also outline four steps for creating and implementing this essential financial forecasting tool.
What does a payroll budget include?
A company’s payroll budget includes all costs directly related to individual employees, including wages, commissions and taxes. It also includes the employer’s employee benefits package costs. When considering different approaches to managing payroll expenses, the size of the company can significantly influence its focus.
“For smaller companies like mine we often focus more on wages, taxes and simpler benefit packages, while larger businesses typically deal with more complex benefits packages and incentive programs,” said Brian Kroeker, president of Little Rock Printing, an e-commerce-based printing solution.
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