A Payroll System is a software application or process used by businesses to manage employee compensation. It calculates wages, deducts taxes, and ensures that employees are paid accurately and on time. This system also keeps track of hours worked, overtime, and benefits, making it essential for maintaining financial records. In addition to processing payments, a Payroll System generates reports for management and complies with government regulations. It helps businesses avoid errors and penalties related to payroll taxes and employee benefits. Overall, an efficient payroll system streamlines the payment process and supports organizational efficiency.