A payroll number is a specific piece of information used in a company’s payroll system. The number allows a company to track employees through the use of the number rather than a name or other identifier. It is typically an internal piece of information the company creates using its payroll software. The company can create its own combination of letters and numbers or allow the software to create numbers on its own. Creating a number should include figures that allow the company to differentiate between employees based on the number alone.
Most payroll services or software allow a company to create their own payroll number for each employee. Due to this flexibility, a company should consider using a descriptive prefix for each employee group. One option, for example, is to use three digits or letters to define the department. The letters ACC or numbers 200 may represent the accounting department; PRO or 300 may be the production department. Subgroups may also exist in these categories if the company decides to use a number.
Once a company decides on the payroll number prefix, the remaining numbers typically fall in order. For example, ACC00001 may be the starting point for payroll numbers in the accounting department. The latter half of the number can contain as many digits as necessary to cover all employees in the department. Each number for all departments usually has the same combination of letters and numbers. Having the same combination size is necessary to avoid confusing the payroll system.
The human resource department is often responsible for creating this number. In some cases, the human resource department may need approval from the owner or executive management when assigning numbers. This allows owners and executives to have a say in the information that resides in payroll. Upper management may also have input on how to create numbers or the use of them in the company. Approval may also be necessary if the company is setting up new department in the payroll system.
A company that uses a payroll outsourcing service may not need to create a payroll number. The outsource company will do so on their own based on its payroll system. Companies simply input a payroll number that matches the outsource company’s payroll number. The payroll service handles the bulk of the payroll tasks, giving them the ability and freedom to create payroll numbers. All correspondence and information regarding an employee typically requires the use of this number.