“Payroll management is a critical task that requires attention, understanding, and planning. Administering compensation includes outlining how pay is determined (salary vs hourly), calculated, tracked, approved and distributed. With all the components that need to be in place to do this well, it can quickly turn into a painstaking process.
✔ Monitor System Performance – If you use payroll software, track issues reported by employees and work with your provider to make necessary adjustments. ✔ Use Employee Surveys – Conduct regular pulse surveys to assess how employees feel about the payroll process. By actively seeking employee feedback, businesses can identify pain points, enhance payroll efficiency, and improve overall satisfaction. ✔ Time and Attendance Records – Cross-check timecards with payroll data to ensure accurate compensation. ✔ External Payroll Audit – Conducted by a third-party professional, an external audit provides an unbiased review of payroll processes to ensure compliance and efficiency.
Frequently asked questions about how to manage payroll
✔ Build Redundancy & Cross-Training – Avoid single points of failure by cross-training employees on payroll tasks. ✔ Document Payroll Processes – Establish clear, detailed payroll procedures to simplify onboarding new payroll staff and ensure consistency. A payroll system that listens and adapts isn’t just a business necessity — it’s a competitive advantage. ✔ Encourage Open Communication – Create an environment where employees feel comfortable discussing payroll concerns.
What Is Tax Reciprocity and What Does It Mean for Your Small Business?
That means adhering to payroll best practices, such as developing a solid compensation plan, maintaining compliance, and paying people equitably. Effortless time tracking and payroll solutions at your fingertips. Learn more about how OnTheClock Payroll can simplify what is prime cost your payroll process today at /payroll.aspx! If you’re looking for a simple, reliable payroll solution that works seamlessly with time tracking, OnTheClock Payroll is designed for you. A payroll system built for expansion gives you the freedom to focus on growing your business — not fixing payroll issues.
✔ Maintain a payroll calendar – Provide employees and payroll staff with a clear schedule of payroll deadlines, paydays, and tax filing dates. You must ensure accuracy and consistency in processing payroll at all times; otherwise, it may negatively affect your business’s finances. You must also set up a payroll schedule, follow tax and payroll regulations, and calculate, withhold, and disburse salaries, taxes, and deductions on time. To prepare payroll for your business, you must classify whether your employees are W-2 staff or independent contractors.
For Salaried Employees:
Real-time payroll is the instant calculation of gross-to-net (G2N) pay—showing total employer cost, gross pay, and net pay—right after you submit your payroll data. One of the biggest advancements in human resources software is payroll processing automation. Creating a single source of truth for your payroll processes and best practices will ensure your entire payroll department is working with the same standards in mind.
How to Stay Ahead of Payroll Tax Changes
Employee self-service options allow workers to access pay stubs, update information, and manage direct deposits without extra admin work. A well-documented system prevents disruptions as your business grows. ✔ Builds Trust & Transparency – A company that listens to employee concerns fosters a more engaged and loyal workforce.
State and Local Requirements
- ✔ Build Redundancy & Cross-Training – Avoid single points of failure by cross-training employees on payroll tasks.
- Ask them whether they have experienced delays in receiving their salaries, and if so, whether the issue was addressed and resolved in the fastest possible time.
- There’s some basic information that you should maintain on each employee, including name, address, birthdate and social security number.
- The Department of Labor has strict rules about when companies should submit their employees’ payroll documents (which include pay stubs, employee retirement statements, and tax forms like employee W2s and W4s.).
Ensuring a smooth and transparent payroll experience starts with listening to the people it affects most. Payroll isn’t just a back-office function — it directly impacts employees’ financial well-being and job satisfaction. An audit helps verify that wages, overtime, bonuses, and deductions are calculated properly.
Behind every successful company is a hardworking team that ensures the business meets client expectations consistently. It entails knowing and understanding existing labor laws, meticulously calculating wages, and setting aside a payroll budget. Encourage them to specify common errors they encounter in their paychecks and employment records. You can also hire a payroll consultant to provide more in-depth guidance to your HR and payroll team.
Keep the agencies that regulate payroll laws do i need a lawyer accountant for creating an llc – the Internal Revenue Service (IRS) and the Department of Labor (DOL) – top of mind and understand payroll laws and regulations. Additionally, employees should know how to submit timesheets and update personal information. Visual calendars help you better anticipate the ongoing monthly payroll process stages and encourage you to identify upcoming federal holidays for an altered holiday pay schedule.
In this article, we’ll explore essential payroll best practices to optimize your processes and empower your team for payroll success in 2025 and beyond. That’s why Earned Wage Access (EWA) is an option to consider as you look to optimize your business’s payroll processes. Be sure to file their details separately and understand the various payroll taxes you need to pay. This can leave your payroll team struggling to process all the incoming documentation before month-end.
Managing Payroll for Different Worker Classifications
- It’s no wonder 40% of small business owners believe managing payroll and taxes is the worst part of owning their business.
- ✔ Document Payroll Processes – Establish clear, detailed payroll procedures to simplify onboarding new payroll staff and ensure consistency.
- Even if you manage to resolve these errors, that does not change the fact that you have already wasted time and resources.
- Keep the agencies that regulate payroll laws – the Internal Revenue Service (IRS) and the Department of Labor (DOL) – top of mind and understand payroll laws and regulations.
- All of this will help minimize manual processes and errors, ensuring your employees are paid accurately and on time.
The IRS requires you to keep certain records for at least four years. When you have a clear and precise financial picture of the business, you can accurately plan for headcount, bonuses, and other financial decisions that align with your strategic goals. Plan for year-end reporting requirements, including W-2 and 1099 forms, to avoid last-minute hassles and prevent potential issues with tax authorities. One solution to the constant back-and-forth is to equip your people with an employee self-service portal. But in addition to auditing for accuracy, it’s essential to analyze your current compensation strategy.
Employers are required to pay payroll taxes and file necessary paperwork to federal, state and local entities. This offers an opportunity to double-check and ensure any substantial payroll dollar amount variances are understood and accounted for prior to processing paychecks. Generally, your payroll software allows you to include these enrollments in the onboarding process (or whenever the individual becomes eligible for them). Each time a new employee is hired, you must ensure they submit all necessary pay-related documents. Bi-weekly is the most common pay frequency, which works well for both salaried and hourly employees and is a bit more manageable for a small business. Having guidelines and accuracy checks in place will ensure a smooth and timely process with fewer errors.
Expert Payroll Tips, Tricks, & Strategies to Use in 2025
One of the upsides of managing payroll is that almost all of the necessary deadlines are known beforehand. Since centralizing their payroll with Deel, they’ve reduced their workload significantly and can accommodate their contractors’ payment options with ease. Payroll was messy, and the team would spend hours on end working to get everyone paid on time.
Processing Audit Steps
Additionally, training such as this one from HR Certification.com, can help you remain knowledgeable about the duties and responsibilities related to effective payroll management. With Deel, you can fund payroll with just a click and automatically calculate production payroll taxes without lifting a finger. Learn the basics of payroll management here. Use pulse surveys to gauge your team’s satisfaction with your current payroll process and system. Other companies turn to payroll outsourcing when they begin to hire employees internationally.