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Payroll provides full gross-to-net processing for employees in the United States. With Payroll you can set up, enter, and maintain all payroll records and transactions. The comprehensive earnings and pay statement process covers federal, state, and local taxes, flexible deduction and benefits processing, and support for garnishments and tax levies. Payroll provides full reporting and inquires for W2 processing, and 940 and 941 reporting. It also lets you view current and historical payroll information for individual employees or for groups of employees.

Basic setup

Basic setup for Payroll involves setting pay cycles and pay periods, calculation frequencies, and setting work schedules. The pay cycle frequency determines how often a pay cycle is run. Pay periods and pay dates are defined as part of the pay cycle. You use the payroll calculation frequency to select the specific pay periods when you want certain earnings or other payroll entities to be processed.

Configuring Payroll also includes setting up earning codes and creating earning code groups, and entering information for tax withholding, benefit accrual, and setting beginning balances.

Frequencies and cycles




Advanced setup

Premium earnings, garnishments, and tax levies won’t be used by all employees. If your organization needs to pay premium earnings or garnish an employee’s pay, Payroll includes a framework that can help ensure that the impact of these transactions is handled correctly.


Payroll processing tasks

Running a payroll includes generating earnings and then issuing worker payments. When those tasks have been completed, you’ll post the payroll transactions and then generate vendor invoices, which result in payments being made to employees. The following topics provide detailed information about this process.

A number of tasks are completed after you generate pay statements for your employees. These include releasing earnings for payment processing, and at times, holding earnings from payment processing and changing information on earnings statements.

Other payroll tasks

Additional resources

  • Additional help is available as task guides inside Dynamics 365 for Operations. To access task guides, click the Help button on any page.
  • For information about Microsoft Dynamics 365 for Operations training, see Microsoft eLearning (requires a CustomerSource account).
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