Become a Payroll Accountant
What is Payroll Accounting?
Whether it’s a big company or a small boutique, most businesses have some form of payroll department, or at the very least, a payroll accountant whose key role is overseeing the correct compensation of the employees.
Payroll accountants are often tasked with compiling information about workers' salaries and/or the number of hours worked, and issue paychecks. Prior to handing out paychecks, they verify accuracy and make any adjustments. In addition, payroll accountants make sure checks are given according to the rules formed by the company.
This would be an appropriate career for someone who is a strong problem solver and multi-tasker. You should also excel in mathematical skills, analytical and critical thinking, as well as organization.
Additionally, as a payroll accountant you might be asked to prepare accounting documents, schedules, and other duties associated with the company’s overall accounting department and possibly tax audits and preparation. A payroll accountant also needs to ensure all payroll operations follow federal, state, and local laws.
If this sounds like a career you may want to pursue, there are several steps, credentials and/or licenses you will need to get under your belt before stepping into a payroll accountant’s chair.
Payroll Accountant Job Description
The most common task that is performed by a payroll accountant is the calculation of employee paychecks. Payroll accountants must keep track of employee time cards, requests for paid and unpaid leaves, as well as other factors essential to accurate payroll standards and procedures.
Besides making sure employees receive their regular paychecks, payroll accountants also practice taxation principles, preparing ledgers and journals, transfers, journal entries, and deposits. Payroll accountants see that there is appropriate disbursement of funds, and make sure employees complete certain forms.
Sometimes, payroll accountants help the company create compensation packages and private pension plans, along with trust-funds, group annuities, profit-sharing, thrift savings plans, and even employee stock ownership.
Aside from participating in the daily operations of a business’s payroll department, payroll accountants may be asked to be internal payroll auditors. During an internal audit, the payroll accountant will review, evaluate and assess the accuracy of payroll and tax documents. They also work to ensure that the company is compliant with federal, state and local regulations that are relevant to the payroll reporting process.
Essentially, payroll accountants act as liaisons that perform financial and reporting activities between a business organization, its employees and the government.
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Other Possible Job Functions
In terms of government, payroll accountants should also be well-versed in tax laws and regulations. From an employee perspective the payroll department is responsible for checking that the correct amount of taxes have been withheld from each paycheck. These include federal, state and local income tax, Social Security tax and unemployment tax. It’s the responsibility of payroll accountants to ensure all necessary withholdings are deducted from each employee’s paycheck.
On the corporate and/or business side, payroll accountants are tasked with making quarterly payments to the Internal Revenue Service and other state and local taxing authorities. There are numerous categories of taxes on the business side such as federal unemployment tax, Social Security tax and workers’ compensation. Businesses are required by the government to pay half of an employee’s Social Security and Medicare tax liability.
At the end of each year, payroll accountants may also be asked to compile and issue individual compensation reports to each employee, and to the government, for tax purposes.
Also, the IRS and the Fair Labor Standards Act require businesses to keep and maintain certain employee records. Payroll accountants are responsible for ensuring that its payroll department is following these regulations. Businesses and corporations that fail to properly maintain employee records in accordance with the Fair Labor Standards Act may be subject to fines and possible imprisonment under the FLSA.
Lastly, payroll accountants should be familiar with the Federal Insurance Contributions Act, or “FICA tax.” The federal law requires employers and employees to pay into the Social Security and Medicare programs.
Certification and Licensure
Entry-level positions in payroll usually require a high school diploma and one year of office experience. If you land a clerical position, such as payroll clerk or assistant, you most likely will perform general administrative duties such as filing, faxing and copying. As you move up the ladder, you may audit time and attendance, add new employee information into the company's human resources records, and make changes to tax data or employment statuses.
As you move forward in your career as a payroll accountant, many companies prefer a candidate to have earned a Bachelor's Degree in accounting.
According to the U.S. Department of Labor, Bureau of Labor Statistics, most individuals will have a Bachelor’s Degree or a related field such as business administration, finance, statistics, actuarial science or economics to work in the field of payroll accounting.
Individuals who are interested in payroll accounting careers may take the needed training at traditional colleges and universities or online. Besides taking courses in general education, humanities, business, and life sciences, students may take core courses such as:
Taxation
Financial Accounting
Managerial Accounting
Strategic Cost Analysis
Advancement Opportunities for Payroll Accountants
Individuals interested in payroll accounting may be able to advance their careers by obtaining a Master’s Degree in Business Administration or by pursuing a Certified Public Accountant license. There are also several specific payroll certifications that are provided by professional associations.
Payroll Certifications
Individuals may further opt to earn professional designations and credentials, but these are not mandatory. The American Payroll Association, which is the main professional association in the field of payroll accounting, offers two distinct certification programs:
1. Fundamental Payroll Certification:
payroll individuals. The program is for those who have basic payroll knowledge and competency. The designation is awarded after the candidate successfully completes the Fundamental Payroll Exam.
2. Certified Payroll Professional:
This certification is best for advanced payroll professionals. To be eligible for the designation, a person must have worked for at least three out of the five previous years as a payroll professional. CPP qualifications also include being employed for the last 24 months, given that specific course work was completed. A third eligibility option is offered for those who have earned the FPC certification, worked in the field for 18 months and completed specific required coursework. The designation is awarded by the American Payroll Association after the successful completion of the Certified Payroll Professional Examination.
Where You Can Work
As a payroll accountant, you may find employment in businesses where accounting, tax preparation, bookkeeping and payroll services are needed. Other options or alternatives may be working in a different kind of financial capacity. For example, as a billing clerk, and someone who would calculate charges for a company's customers and sending out bills. Another option is as a claims and policy processing clerk at an insurance company. This role might involve reviewing insurance applications and implementing policy changes or cancellations based on customer needs. For these positions, you would need to have at least a high school diploma.
As for senior positions, typically these require between two and five years of experience, and some employers may also want you to have an associate’s degree or certification. As a senior payroll employee, you may perform the duties of clerical or entry-level positions, but you could have many other duties. You can expect to prepare financial statements, and tax records, and calculate complex salary data. It’s highly possible you may be required to train new payroll employees. As a payroll administrator, you could have additional duties like managing a smaller group of employees.
Advanced management positions may require you to have at least five to seven years of experience and a bachelor’s degree in finance or related area. As a payroll manager, supervisor or director, you will most often work in large companies. Your responsibilities are to manage the daily operation of the payroll department by overseeing payroll systems, tax records or benefits administration, and taking on direct reports.
Salary Info and Job Outlook
If you do get hired as a payroll accountant, the salary can vary.
The annual mean wage is $41,160, according to the most recent data from the Bureau of Labor Statistics for all workers in accounting, tax preparation, bookkeeping and payroll services. Of course, this is dependent on where you live and where you work, and payroll accountants in Natural Gas Distribution make an annual mean wage of $57,610.
As for the future of payroll accounting, technological advancements are expected to continue to diminish the need for payroll and timekeeping clerks. The U.S. Bureau of Labor Statistics reports a 3% decrease in employment from 2014 to 2024. You can increase your opportunities in this field by undertaking and finishing a certification program and learning to take on complex payroll processes.
Payroll accounting professionals have to track worker time cards, request for payment in addition to past due fallen leaves of absence, together with different other variables that are essential to precise payroll computation. Besides taking part in the daily procedures of a business's pay-roll department, pay-roll accountancy experts regularly work as interior pay-roll auditors. Throughout an interior audit, the pay-roll bookkeeping expert will certainly examine, evaluate and additionally analyze the precision of pay-roll as well as also tax commitment records.
Payroll accounting experts need to be well versed in tax obligation regulations and also plans. From an employee viewpoint, the pay-roll division is liable for seeing to it the suitable amount of tax obligation obligations have really been kept from each paycheck. These consist of federal government, state and also neighborhood earnings tax commitment, Social Safety and security and also safety tax commitment as well as unemployment tax obligation. While per hour profits and additional annual salaries are crucial for identifying gross salaries, the internet amount that employees get relaxes upon a variety of aspects such as their expected tax commitment brace, medical strategy payments as well as different other staff member benefit approaches such as a 401K, life insurance plan or annuity program.
There are numerous categories of tax obligations on the business side such as federal joblessness tax, Social Security tax responsibility along with employees' settlement. Services are needed by the government to share a personnel's Social Security and also Medicare tax obligation duty.
At the end of each year, payroll accounting professionals are liable for setting up and also releasing personal settlement records to each personnel, and also to the government, for tax functions. There are a number of sorts of settlement documents, including W-2, W-3, 1099 and also 941 forms. Each kind represents the kind of personnel or compensation task that occurred at the company throughout the year.
A payroll accounting professional maintains the firm's pay-roll accounts, recommends the pay-roll group on challenging pay-roll issues and likewise aids with interior as well as likewise exterior audits. She furthermore keeps payroll-related accounts, prepares audit documents and likewise routines, and figures out the need for new accounts and modifications in the account structure. This positioning typically requires a bachelor's level in audit plus 2 to four years of experience.
The debits as well as credit score reports in your books should equate to every other. Some accounts are improved by debits as well as decreased by credits. Various other accounts are boosted by credit reports and likewise reduced by debits. Use this graph to see exactly how each account is affected by debits along with financial obligations: With payroll accountancy, you collaborate with prices, obligations, as well as also possessions.
Payroll accountants need to track worker time cards, ask for paid as well as unsettled leaves of absence, in addition to various other aspects that are essential to precise pay-roll estimation. Apart from participating in the daily procedures of a service's pay-roll department, pay-roll accounting professionals regularly function as interior pay-roll auditors. During an interior audit, the payroll accounting specialist will definitely evaluate, take a look at along with examining the accuracy of pay-roll as well as likewise tax obligation records.
Payroll accounting experts have to be well versed in tax obligation legislation and also regulations. From an employee viewpoint, the payroll division is answerable for making sure the proper amount of tax obligations have actually been kept from each paycheck. These consist of federal government, state and additionally local profits tax commitment, Social Security tax obligation and also tax obligation. While per hr salaries and yearly revenues are required for computing gross salaries, the internet quantity that personnel get is contingent upon a selection of components such as their anticipated tax brace, professional approach settlements and various other fringe benefit approaches such as a 401K, life insurance policy protection or annuity program.
On the business or organisation end, payroll accountants are answerable for making quarterly settlements to the Interior Profits Service and different other state and additionally local tiring authorities. There are many groups of tax responsibilities on the business side such as federal unemployment tax obligation, Social Security tax obligation as well as workers' negotiation. Businesses are required by the federal government to pay half of an employee's Social Protection along with Medicare tax obligation.
There are additionally a selection of certain payroll credentials that are supplied by specialist organizations. Individuals interested concerning pursuing an occupation concentrated on pay-roll audit may pick to obtain specialist classifications as well as also certifications. The American Pay-roll Company, which is the significant specialist organization in the field of payroll accountancy, offers 2 distinct certification programs: This qualification program is tailored towards entry-level pay-roll professionals.
This mobile-friendly accounting phase uses a testimonial of fundamental payroll accounting concepts. Follow together with our seasoned bookkeeping teachers to evaluate ideas related to payroll tax, pay-roll system techniques, employee repayment accounting and also a whole lot a lot more. By the end of the phase, you should have the capacity to: Clear up simply exactly how to compose pay-roll, employee leave and also rewards Specify appropriate division pay-roll system terms Assess instances of pay-roll tax obligation Acknowledge the needs for firm federal tax obligation declaring To aid you strengthen your understanding of these pay-roll accounting concepts, we've included a variety of self-assessment quizzes throughout the chapter.
If you're an entrepreneur with employees, opportunities are you to take care of pay-roll routinely. Element of that requires maintaining your publications accurately and also certified. Considering that a number of legislations concern pay-roll taxes along with advantages, payroll accounting can be an intricate process. In between paying different types of workers as well as reporting upkeep, pay-roll can swiftly drain pipes much called for resources for your organisation.
Though a lot of the information varies in between business, the adhering to location figures out a few of the major parts of a payroll accounting expert line of work, such as possible titles, day-to-day tasks, as well as specializeds. The major focus for these accounting professionals is preparing, producing, and also keeping pay-roll documents. This generally consists of providing in addition to improving employee pay, settlements, as well as advantages, guaranteeing the precision of all info along with adherence to government plans as well as guidelines.
As a result of the nature of their deal with numbers, accounting professionals require strong mathematical abilities. Payroll accountants profit virtually every kind of organization. According to the BLS, 24% of accountancy experts operate in pay-roll options as well as relevant areas, and also the line of work experiences an ordinary rate of development from 2018-2028. An expert may benefit a pay-roll solutions business that organizations contract for their solutions or even more straight within a service.
Audit experts spend much of their days assessing and also readjusting facts along with figures. They make use of a selection of devices as well as applications to make their job less complex, quicker, and extra efficient. Some common job demands include familiarity with Microsoft Office as well as likewise other accounting applications. Bookkeeping specialists might furthermore need a functioning understanding of data source, enterprise resource planning, financial analysis, along with tax responsibility preparation work software programs.
Accounting professionals often oversee settlement along with benefits settlements for companies also, in addition to understanding of service fundamentals and procedures can go an extensive means. Payroll accountants should carefully take a look at preferred job tasks when seeking a job. Because payroll accountants can tackle numerous different duties, task titles vary substantially. Some businesses call this position a basic accountant, accountant, or audit clerk.
Payroll accountants can similarly take on a range of specializeds. The development of these specializeds starts with electives, focus, and additional areas of know-hows. Accountancy professionals could specialize in tax or labor guidelines, confirming their companies comply with state and also government laws. They may focus on financial investments to identify financial opportunities or they might focus on managerial book-keeping to increase business spending plan plans, property administration, and also effectiveness.
Payroll accountants play a crucial feature in all business with a team of staff members. Both little and also huge organisations alike need to comply with neighborhood, state as well as government regulations certain to payroll coverage as well as conformity laws. Basically, pay-roll bookkeeping experts work as liaisons that carry out financial and additionally coverage activities in between a venture, their employees as well as also the government.
Payroll accounting professionals have to monitor team member time cards, request for paid and also overdue fallen leaves of absence, in addition to various other variables that are crucial to exact pay-roll estimation. Apart from joining the day-to-day procedures of an organisation's pay-roll department, payroll accountants normally act as internal payroll auditors. Throughout an internal audit, the payroll accounting expert will certainly assess, examine and additionally analyze the precision of payroll in addition to tax obligation documents.
On the business or organisation end, payroll accounting specialists supervise making quarterly repayments to the Irs as well as different other states as well as area tiring authorities. There are plenty of categories of tax responsibilities on the company side such as federal government joblessness tax, Social Safety and also safety tax obligation in addition to workers' settlement. Services are called for by the government to share an employee's Social Protection in addition to Medicare tax responsibility.
This works out to 12.4% of gross earnings for Social Security and additionally 2.9% for Medicare. According to the U.S. Division of Labor, Bureau of Labor Data, a lot of people will certainly require at least a bachelor's level in bookkeeping or a connected area such as organisation administration, finance, stats, actuarial clinical study or business economics in order to run in the field of payroll accounting.
The category is awarded after the prospect efficiently completes the Basic Pay-roll Exam. This qualification is reserved for innovative payroll specialists. In order to be qualified for the designation, an exclusive need to have helped a minimum of 3 out of the 5 previous years as a payroll expert. CPP qualifications are likewise satisfied by having actually been used for the last 24 months, considered that detailed program work was finished.
Whether it's a big firm or a little shop, a lot of companies have some kind of pay-roll division, or at the minimum, a payroll accounting specialist whose important feature is overseeing the appropriate settlement of the workers. Pay-roll accounting professionals are typically charged with assembling details pertaining to workers' salaries and/or the selection of work, along with concerned incomes.
Furthermore, pay-roll accounting specialists ensure checks are offered according to the policies formed by the business. This would certainly be a suitable profession for a person that is a strong problem solver as well as multi-tasker. You ought to also grasp mathematical skills, sensible in addition to essential thinking, along with company. Moreover, as a payroll accountant you might be asked to prepare audit documents, timetables, as well as numerous other duties associated with the firm's complete accountancy department in addition to perhaps tax obligation audits as well as additional preparation.
If this looks like a job you could plan to go after, there are numerous actions, certifications and/or licenses you will certainly call for to get under your belt before tipping right into a payroll accountant's chair. Among the most common work that is done by a pay-roll accounting specialist is the estimation of personal incomes.
Besides seeing to it employees obtain their typical incomes, payroll accountants additionally exercise tax ideas, preparing ledgers as well as journals, transfers, journal entrances, in addition to down payments. Payroll accounting experts see that this appropriates disbursement of funds, in addition to ascertaining staff members full certain kinds. In many cases, payroll accountants help the business create repayment bundles and unique pension plans, along with trust-funds, team annuities, profit-sharing, second hand financial savings plans, as well as likewise even worker supply possession.
During an indoor audit, the payroll accountant will certainly assess, assess as well as check out the accuracy of pay-roll along with tax papers. They additionally operate to make sure that the firm is compliant with government, state as well as neighborhood standards that are pertinent to the pay-roll reporting procedure. Essentially, payroll accounting specialists serve as intermediaries that accomplish economic as well as also coverage tasks in between a business, its employees and the federal government.