You’re unsure if you’re doing everything you need to do in order to complete your payroll. You can use this payroll checklist to accomplish it.
For this reason, many businesses opt for payroll software and outsource the actual payroll processing to a third party. If you’re battling this war on your own, we’ve put together a downloadable payroll checklist to help.
Even if this payroll checklist isn’t perfect, it can’t be. There are too many variables, such as the location of your business, your sector, and the way you choose to pay your employees, to develop a comprehensive checklist. For those who are just getting started, this is a good starting point.
Observing time’s passage
Hourly employees are compensated based on the number of hours they work within a pay cycle. As a result, payroll processing comprises calculating the number of hours to pay them. It should contain all time-keeping activities, perform time computations, and print timesheet registers, among other things.
Records of employees
The first step on the checklist should be to check for and make any necessary updates to the payroll records of employees who have been hired. Address changes, salary hikes and deductions, payroll deduction modifications, setting up new hires, and processing dismissed employees are all examples of what is covered.
Before you begin processing payroll, double-check that all of your employees’ information is still up-to-date. This could entail verifying that employees who are labeled as employees are, in fact, employees and not independent contractors. Also included could be a review to determine whether salary garnishments are necessary, whether home addresses have moved, and whether salaries have been increased. As long as all of your records across all of your platforms are consistent, you may be confident that your information is correct.
Invoicing
Your workers’ wages are the amount of money you pay them before deducting any taxes or benefit payments from their paychecks. The accuracy with which they are calculated is critical to any effective payroll run. The great news is that these calculations are frequently straightforward, even when incentives, commissions, tips, and cost reimbursements are taken into consideration. For your convenience, we’ve created a tutorial for computing and paying salaries to assist you with this operation.
When it comes to paying salaries, the checklist should include items to look for. This covers the following tasks: recording and categorizing routine and extra hours, making salary adjustments, delivering bonuses, incentives, workers’ compensation, wages, and business perks, such as auto checks and vacation, personal, and sick leave, and calculating and reporting payroll taxes.
Direct Paycheck Processing
Paychecks and payslips must be printed as part of the process, according to the checklist. A direct deposit step should be included in the checklist if the employer offers bank transfers. More specifically, the checklist should include the step of creating a direct deposit file. Send the documents to the bank and check to see that the file and the amount were received properly by the financial institution.
Processing deduction
A variety of deductions have an impact on employees’ paychecks. The checklist should include a list of statutory deductions as well as voluntary deductions that should be checked when processing payroll. Create a code for each form of deduction, such as CHSPPRT or GARN for pay garnish wages, or CH SUPP for family assistance payments, among other things.
It takes a few payroll processing sessions to become comfortable with the deductions that are applied to each individual employee. Deductions should also be included in the checklist because this will assist you when you are checking the payroll prior to printing paychecks. The deductions that will be made from employees’ paychecks are detailed in the verification report. If a reduction is supposed to be made for a specific employee but does not occur, you can identify and remedy the problem before it occurs.
Reporting process
The FLSA (Fair Labor Standards Act) of the United States Department of Labor establishes the record-keeping requirements that companies must adhere to. Employers are required to retain payroll data for a minimum of three years under the Fair Labor Standards Act. The employer must also make the documents available for review by the department, as failing to maintain accurate payroll records is a breach of the FLSA. As a result, the checklist should include all the payslips that must be maintained, such as payroll registrations and time cards for each pay period, among other things.
It is necessary to list the reports that must be forwarded to other departments that deal with dependent matters, such as benefits and compensation, payroll accounting, and/or payroll tax reporting. Examples of such reports include quarterly and annual payroll registers.
Nowadays, you can collect the tax information from your employees once you have completed your identification and tax payment details. In order to do so, you must have your workers complete an IRS Form W-4, and your contractors must submit an IRS Form W-9. In addition to these payroll documents, you’ll also need to collect the USCIS Form I-9, which will be used to confirm your employees’ eligibility to work in the United States.
Determine withholding
Withholding money from an employee’s paycheck should be allocated to the right accounts in your bookkeeping when you pay them. You should keep your tax withholding in the tax account until you pay your taxes quarterly, rather than every pay period.
It’s also a good idea to transfer any money you’ve withheld for insurance premiums or benefits contributions to the account that pays for these expenses. To make your payroll process even more efficient, you might use accounting software instead of completing it manually.
Make a thorough examination of all of your calculations
To ensure that your calculations are accurate, double-check all the numbers involved. After that, rerun each calculation. It’s safe to presume that all is well if the results are the same the second time around. If not, be sure to double-check your work for inaccuracies.
There could be disparities in your records if you make mistakes. It’s possible that your payroll software has a different wage recorded for a particular employee than what is documented in your accounting or staffing records. Make sure that your staff and the members of your team responsible for keeping records are aware of any discrepancies, fix them, and recalculate. The numbers should now be proper. You may also be interested in Top 7 Management Skills That You Must Have In 2022.
Summary
Employers often outsource the actual payroll processing to a third-party company, but we’ve put together a checklist to help you complete your payroll. Records of employees A direct deposit step should be included in the checklist if the employer offers bank transfers. It takes a few payroll processing sessions to become comfortable with the deductions that are applied to each individual employee’s paycheck. Withholding money from an employee’s paycheck should be allocated to the right accounts in your bookkeeping. You should keep your tax withholding in the tax account until you pay your taxes quarterly, rather than every pay period. To make your payroll process even more efficient, you might use accounting software instead of completing it manually.