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Payroll Analyst Job Description
  • Publish: April 2, 2021
  • Author: StrongerTeams Editorial
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Payroll Analyst Job Description

A Payroll Analyst oversees the payroll function in an organization and ensures each payroll run is accurate and compliant with all applicable laws and regulations.

As a support function to the Payroll Manager, the role is essential in guaranteeing that employees are paid correctly and on time and that the payroll function is efficient.

The job can be a precursor to a supervisory or management position in the payroll department.

Similar Job Titles:

HR Specialist, Payroll Coordinator, Payroll Supervisor

What Does a Payroll Analyst Typically Do?

A Payroll Analyst examines each payroll run for accuracy, efficiency, and compliance and reports to the Payroll Manager on any improvement opportunities that are apparent.

The role is also a link between the HR, payroll, and finance departments and ensures that the payroll function is coordinated across the whole organization.

The job’s tasks include:

  1. Verifying work records have been captured correctly and completely
  2. Ensuring wage and salary calculations are correct
  3. Checking and verifying deductions
  4. Overseeing the distribution of paychecks and direct deposits
  5. Managing payroll information updates
  6. Analyzing payroll process efficiency
  7. Reporting to management on each payroll run

Verifying Work Records Have Been Captured Correctly and Completely

Before each payroll run is submitted for processing, a Payroll Analyst checks that all the performed work is a true reflection of the entered work records.

This may involve conferring with departmental heads to verify overtime claims or extra shifts, performing random sample checks on the data captured, or cross-referencing data from the Human Resources Information System (HRIS).

This task is complex and demands close attention to detail, and a Payroll Analyst is held responsible for the validity of the data for each payroll run.

Ensuring Wage and Salary Calculations Are Correct

A Payroll Analyst checks all the wage and salary data for errors or inconsistencies and highlights any issues. Depending on the complexity of the organization’s pay structure, a Payroll Analyst may have to verify bonuses, overtime, expense claims, or other ad hoc remuneration.

In the case of target-related bonus or commission payments, the line manager is consulted to ensure that the payments are in line with target achievement.

Any mistakes or anomalies are inspected to determine whether they are systemic or resulting from faulty data input. A Payroll Analyst flags any systemic failures and liaises with the Payroll Manager and the IT department to rectify them.

Checking and Verifying Deductions

Deductions must be calculated correctly and consistently, so a Payroll Analyst performs a series of spot checks to ensure they are accurate for each payroll run.

Any anomalies or mistakes must be fixed immediately. A Payroll Analyst should also investigate these anomalies because they could indicate potential systemic issues. In such cases, a Payroll Analyst performs a complete audit of the deductions process to determine and rectify the root cause of the problem.

Overseeing the Distribution of Paychecks and Direct Deposits

All payments made to employees are checked to ensure that bank transactions have been successful, physical paychecks have been delivered, and bank data is reconciled with the general ledger.

A Payroll Analyst examines the efficiency of the pay distribution system to find improvement opportunities, such as shifting the entire organization away from physical paychecks. The results of this examination are presented to payroll management, together with action suggestions that would improve efficiency.

Managing Payroll Information Updates

Any payroll information updates, such as promotions, salary band revisions, or annual salary increases, are entered into the HRIS by payroll staff and checked for accuracy by a Payroll Analyst.

This task can be highly time-consuming, and a Payroll Analyst requires strong time management skills to ensure it is completed accurately and within a reasonable timeframe.

Analyzing Payroll Process Efficiency

The payroll process is crucial to the financial health of an organization, and a Payroll Analyst needs to look for ways to improve its efficiency and accuracy.

The speed of data entry, the accuracy of data capture, automation of validation procedures, and efficiency of payment processing all contribute to the payroll function becoming less time-consuming and less costly to an organization.

A Payroll Analyst trends the entire payroll process over time, identifies areas of opportunity, and presents improvement plans to the Payroll Manager. If the plans are considered viable, a Payroll Analyst may be tasked with their implementation.

Reporting to Management on Each Payroll Run

Each payroll run is examined for efficiency and accuracy, and a Payroll Analyst prepares a report highlighting performance against targets and any identified issues.

The reports should also trend payroll performance over time to encourage continuous improvement and should include suggestions for long-term enhancements to the process.

Roles a Payroll Analyst Typically Collaborates With

A Payroll Analyst collaborates closely with the following roles:

Collaborative Roles
Compensation and Benefits ManagerPayroll ManagerHR Coordinator
HR ManagerHuman Resources ExecutiveSenior HR Specialist
Benefits AnalystBenefits AdministratorBenefits Manager

Payroll Analyst Salary

Payroll Analysts earn between $59,000 and $73,000 a year in the U.S., with the average (median) lying at $65,142.

What Is the Payroll Analyst Pay Difference by Location?

A Payroll Analyst’s earnings vary depending on the location as follows:

CityAverage Salary
San Francisco, CA$81,428
Austin, TX$64,067
Washington, D.C.$72,516
Seattle, WA$71,226
Boston, MA$73,396
Milwaukee, WI$64,471
New York, NY$78,366
Denver, CO$65,878

What Is the Payroll Analyst Pay Difference by Experience Level?

Years of experience will affect a Payroll Analyst’s salary as follows:

Experience LevelAverage Salary
< 1 year$62,713
1–4 years$63,685
5–9 years$65,695
10–19 years$67,574
20+ years$67,906

Payroll Analyst Job Description Template

[Company] is looking for a Payroll Analyst to help us ensure our payroll system is efficient, accurate, and ready to handle the company’s expected growth.

If you are a payroll expert looking for a long-term challenge to improve system efficiency, this role may be for you.

Your job will be to work with our payroll team to identify opportunities and help them drive improvement across the entire payroll function.

Payroll Analyst Job Responsibilities

  • Ensuring the accuracy and efficiency of payroll runs
  • Verifying payroll data integrity
  • Analyzing payroll performance
  • Suggesting improvement areas
  • Working with management to implement improvement initiatives

Required Skill Set

  • Bachelor’s degree in Payroll or Accounting
  • At least five years’ experience in a payroll job
  • Expert knowledge of payroll systems and HRIS
  • Total commitment to detail and quality
  • Proven ability to function well under pressure
  • Expert time management, problem-solving, and data analysis skills

Hiring Resources for Ambitious Companies

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