It’s important to make sure the payroll analysis of your current employees’ salaries, bonuses, wages, and withheld taxes are properly documented, easy to read, and analyzed properly. Payroll is a term that is commonly used to accumulate the list of current employees with the total amount of money a company needs to pay them. Payroll Processing may seem easy enough, but it is also a very delicate task to handle.
When you are doing a payroll process, it’s very helpful to create a checklist to make sure you avoid any oversights that can lead to legal penalties and frustrating hassles in regards to fixing mistakes on paychecks.
Payroll Processing Checklist
When planning for a payroll processing session, make sure you include the following:
- Which employees are on an annual salary, and which employees are being paid hourly?
- How are you hourly employees recording their time (Clocking in? Time sheets?)
- Will you cut checks, or will you offer direct deposit options?
- What deductions and benefits you will present and handle (401(k), health insurance, disability)?
- Will overtime and bonus factor into your payroll process?
- How are your pay changes and terminations being handled?
- How often will your company cut checks?
- What is the process to add new-hires into your payroll processing system?
- Who is allowed to make scheduled changes and changes to any pay rates?
- Have any policies for missing work (sick days, holidays, vacation pay, maternity leave, etc.)?
- Is your payroll processing system being outsourced and managed by a 3rd party company?
Other Considerations for a Payroll Processing Checklist
Make sure you keep your employee records up to date. This includes address changes, payroll deduction changes, pay raises, setting up new hires, and updating the current particulars on any recently terminated employees.
Make sure the records of your employees who are being paid hourly are correct and accurate. Ensure that time keeping cards / sheets, and time computation, are submitted accordingly. It may seem easy to calculate the hours of your employees, but it’s a delicate process that has little room for mistakes. You’ll have to be scrupulous in processing hourly wages.
This includes entering and coding regular and overtime hours, making wage adjustments, paying bonuses, commission, severance pay, salaries, benefits, personal sick time, vacation, etc.
The checklist should list statuary deductions and voluntary deduction to look for when processing the payroll. Knowing which deduction affects which employees.
Paycheck / Direct Deposit Options:
The payroll checklist must include printing paychecks and pay stubs. If you, as a company that offers direct deposit options, the checklist should list the direct deposit step for each employee – direct deposit file generation. Send the file to your bank and make sure the bank receives and verifies the file properly, including the amount.
The FLSA (The U.S. Department of Labor: Fair Labor Standards Act) sets the standards, rules, and regulations that employers must comply with. Employers must keep records of their payroll reports for at least three years. Maintaining improper payroll records, as a business, is a violation of the FLSA. When utilizing your payroll checklist, you should meet the moral standards that are necessary for payroll records, so that they can be monitored, maintained, and openly inspected in case the FLSA department wants to make an inspection of your reports.