Nine Steps to Writing Payroll Procedures

Kristie Lorette reports:

"Payroll plays a starring role in your business when you have employees you have to pay. If you’re relinquishing the payroll reins to an employee or hiring someone to take over payroll responsibilities, writing down the payroll procedures can shorten the learning curve. Writing payroll procedures also ensures the same outcome each time the payroll is processed—accurate and timely employee paychecks...Describe how employees document and submit time. According to the U.S. Department of Labor, an employer can use any timekeeping system it wishes...Write down how employees submit the time worked for the payroll period and how often payroll checks are cut...Go through the actions as you write. The best way to make sure that you include all of the steps necessary to process payroll is to write the steps as you go through the actions of doing the payroll...Write how to calculate employee wages...Discuss how to make payment adjustments. Describe the procedures the employee needs to take to make adjustments to the wages paid to the employees...List payment schedule. Include a description of the frequency payroll checks are cut (weekly, biweekly or monthly)...Describe how to print checks or submit payroll information to the payroll servicer. After the employee enters the payroll information into the computer software or time tracking system, describe how to print the payroll checks or submit the payroll records to the payroll service that prints the checks for the business...Maintain the records. The Internal Revenue Service suggests maintaining employee payment records, such as W-2s, timecards, tax statements and other payroll records for at least three years. Describe where these records are stored and how the employee should handle filing these records or saving these records (electronically and/or in hard copy form)...Ask an employee to test the rough-draft instructions. Once the first draft of the steps [is] written, ask an employee to follow the instructions to see if they process the payroll correctly. Allow the employee to provide feedback on areas of the instructions that didn’t make sense or they had problems doing...Write final steps. Using the feedback from the employee, refine and adjust the payroll procedures into a final format."