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What Is Payroll? Payroll involves much more than simply mailing checks. It encompasses a variety of tasks, not all of which are necessarily carried out by the same entity. The process begins with the integration of employees into a payroll system and extends through end-of-year tax responsibilities. Payroll “functions” include gathering employee information, setting up automatic payments and direct deposits, tracking hours or timesheets, calculating wages owed, distributing pay stubs and even ga