Payroll Directors

Archaeologists have discovered payroll records carved in stone as early as 7000 B.C. In ancient Roman times, soldiers were paid with salt, considered valuable at the time. The term salary is derived from the Latin term, salarium argentum, meaning rations of salt. The history of payroll in the workplace in United States is much more recent. There is no doubt that in the early history of independent storekeepers and business owners, bookkeeping records in some form were maintained for personal knowledge and use. Possibly one of the earliest documented payroll departments and payroll director in America was the “Pay Department” of the Army, headed by a “Paymaster General”, established in 1775 by the Continental Congress. The Pay Department, led by the Paymaster General and Deputy Paymasters, was entrusted with the bookkeeping, disbursements and pay of the army. This agency was transformed over the next almost 200 years and was abolished in the late 1960s when its functions were taken over by the Office of Chief of Finance and Accounting of the Federal Government.

In private industry, business and manufacturing flourished during the Industrial Revolution, and a great need developed for a formalized system of tracking employees, their work, and their pay. As the payroll and governmental income tax system became more developed and more complex, the need for accurate payroll and the management of the payroll systems became critical. More and more legislation with respect to employee benefits, Social Security, tax withholding, mandatory worker’s compensation, and similar federal and state regulations required employers to maintain appropriate and accurate records to assure compliance. Still, much of the payroll function was done by hand until the mid 1950s. In 1951, a British company, J. Lyons and Company (founder of the Wimpy burger chain), created the first business computer, Lyons Electronic Office (LEO), which was the first electronic system to be used for producing weekly payroll. Since that time, numerous electronic payroll systems, and now computer programs, have been developed and patented, making the clerical portions of the payroll system more efficient.