What does the term “payroll cycle” indicate?

The term "payroll cycle" refers to the frequency and schedule of payroll processing. This encompasses the specific intervals at which employees are paid, such as weekly, bi-weekly, or monthly, as well as the overall routine established for calculating and distributing wages. Understanding the payroll cycle is crucial for both employers and employees as it affects cash flow management, budgeting, and financial planning within a company. Establishing a clear payroll cycle ensures that employees receive their earnings on time and helps organizations adhere to legal and regulatory requirements regarding wage payment.

Other options focus on different aspects of payroll or accounting terminology. For instance, the total number of employees on payroll pertains to workforce size, total payroll expenses relate to overall payroll budget rather than the frequency of payment, and the time period for annual audits involves financial review practices, all of which are distinct from the concept of the payroll cycle itself.