Every person who owns a small business plays more than one role for his/her business. One of the major roles a small business owner has to play to run a small business is completing the payroll process. Employees of any field are required to believe that the company will pay them on a continuous basis without any setback. Payroll system influences every part of small business from the spirits of employees to the financial solidity of the company. Payroll system shows finance or accounting function used by small business owners to pay their employees for their services. Payroll system can be external or internal. Totally depends on the small business owner’s experience and knowledge. Here is how payroll is useful a small business – Compensation – an important benefit of payroll system is it helps an employee in identifying his/her net worth in the small organisation. An employees’ whole compensation built through payroll system. Total compensation of an employee includes – salary, bonuses and other benefits. Typically, an employee has to go through yearly performance evaluation by their superiors and is paid off with raise in salary or bonuses or can be both. Benefits given to an employee also mirrors the worth of employee in the small organisation. Employees who are rewarded with life insurance, health insurance, pension and other benefits feel that they are important for the organisation. Lower tax bills – an important aspect of payroll system is that its’ required to be done carefully decreasing the amount of federal and state taxes for a small organisation. Small business management has to ensure that every employee fill in their correct information in the W-4 withholding forms. The information filled in these forms by employees is utilized to hold back the amount of personal taxes for employees. Small business owners are also required to make sure that they are holding back the right amount of FICA taxes for every year from the payroll calculated for every employee. The percentage of FICA taxes can be different for every year based on the law authority. Morale – the most important benefit of payroll system how it impacts the spirits of employees. In a small scale organisation, employees are likely to be highly conscious of the financial firmness compared to a large scale organisation. If there is any delay in payroll, employees will begin to blame the financial reliability of the organisation. This will affect the employees and they will begin to underperform and will be careless about their work if they get the feeling that they have no job security. So, this is why payroll should be paid continuously to maintain the morale of employees at high level. Consuming job – payroll system can be result is huge consumption of time for small business owners. The payroll job is required to be carried out continuously for one or two times in every month. Additionally the information used for the payroll process should be correct so right amount is paid to the employees. The holding back amount of taxes is precise and federal and state taxes are paid on the due time. To perform the payroll process efficiently, any owner of small or large scale should get it outsourced to get free time so that business owner can focus on more important part of the business. Small business owners usually operate their payroll process alike to large scale business small business owners can design a payroll system keeping in mind the issues they face will calculation payroll of employees and to make sure that the employees of the organisation understand the process of payroll used by organisation. Payroll system facilitates business owners to design a process that is easy to understand and apply.