A month in the Payroll Officer’s shoes
Posted by: on 18 February 2015 in Payroll
There is often a misconception of what a payroll officer does before and after processing. Employees receive their weekly/ fortnightly/ monthly salary/ wage on time in their bank account and everyone is happy. That’s it – right? Not quite. A payroll officer’s tasks are varied. Although payroll processing is different in every business, a lot goes on behind the scenes in ensuring employees get paid correctly and on time. So what really goes on in a pay cycle?
It’s the week leading up to the payroll run and you tick off some tasks while you wait for information from various departments. After meeting the new employees, you create their personnel files, check their paperwork, update the payroll system and activate their logins on the Employee Self Service (ESS) system. Meanwhile you’re answering emails and phone calls from departing employees wanting to know when their final pay will be processed. You have already calculated their remaining leave entitlement, checked that taxation is correct and updated the payroll system. HR then provides you with changes and updates for the month.
This can include promotions, changes in standard working hours, transfers between departments, and manager changes. The finance team also gives you expense deductions, cost centre and general ledger (GL) updates. You update all third party deductions and notice that the paperwork is starting to pile up for the pay processing when the Sales Manager gives you a list of all the bonuses and commissions. You enter these and check that the tax and super are correct. Meanwhile you receive emails and forms from employees with changes to superannuation funds, Salary Sacrifice and extra tax nominations.
If you are fortunate enough to have an automated ESS system, employees can enter their leave, overtime, various allowances, and update their bank accounts and addresses themselves. If not, you are faced with an additional pile of paperwork to be entered into the payroll system.
The Payroll run
Once all the data are entered, you begin the payroll run. With a day or two as a buffer before the bank file is lodged and reconciliation process begins, you do a final check. You check totals for additional payments and deductions; tax and superannuation; that the new employees are receiving the correct amount, and that the terminations are processed. You note any differences. Your aim is to ensure that the review and sign off processes for your HR & Finance teams is as smooth and easy as possible. It’s at this point you are informed that an employee’s bank account is closed, and also HR advises you of a sudden termination. You correct the data as you hold in the frustrations of last minute corrections.
The payroll is now reconciled and ready for review. Once you provide your manager with all payroll reports and data inputs, you take a deep breath. Following some clarifications, your manager approves the payment and the bank File is loaded. A few hours later, employees are happy to receive their pay. But wait, the job is not yet finished.
Post Payroll reporting
Post payroll tasks focus on generating and distributing reports. There are General Ledger files, leave liability, costing, expense summary, third party payments listing and headcount reports for Finance. You provide each department with a list of required reports. The superannuation lodgement file, tax lodgement file and generated payslips are ready for ESS viewing.
As it’s off-payroll week, no payroll is scheduled, but there are other tasks: new employees have started, additional commission payments and terminations to be processed. You prepare an out of cycle payroll to capture this data before the month ends.
Your last payroll for the month has now been processed. Month end requirements can now be completed: State payroll tax calculated and lodged; superannuation lodgements are loaded; month end reports submitted to HR and Finance; third party payments sent to the ATO; and the month’s paperwork are filed.
Meanwhile, there are requests coming through: Centerlink wants a report, an ex-employee requires a payment summary from three years ago, employment letters, redundancy quotes from HR, ESS forgotten passwords just to name a few. But you are cool calm and collected and you get through each one.
A new cycle begins…
It’s now the start of the new month and the process begins again. Welcome to the life of the payroll officer. We love our job and take pride in ensuring we do a thorough and accurate job – knowing that we too are contributing to the overall success of the company!
Written by: Shane Chatterton
Originally published February 18 2015