Payroll Accountant Career Overview
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Companies in all industries have someone handling their payroll, ensuring employees receive accurate and timely pay. Payroll accountants oversee the tracking, reporting, and processing of employee compensation.
Payroll accountants may work with other financial professionals when setting up accounts and payment channels. They also report to their financial or accounting managers and may present reports and analysis to all management and stakeholders.
The extent of payroll accounting roles and responsibilities vary by the size of the organization. Professionals often work full time with more focused duties in larger organizations.
When working with smaller organizations, they might take on multiple clients to make up a full-time schedule or take on a more general accounting role with full-time hours.
Advancements in accounting technology have streamlined many payroll accounting roles, making accountants more efficient and placing more emphasis on their analysis. Fortune Business Insights projects over 8% compound annual growth between 2019 and 2026 for the accounting software market.
Discover details about the payroll accountant profession below, including job duties, entry requirements, and available pathways.
Payroll Accountant Duties
Payroll accountants manage an organization's payroll responsibilities. They strive for accuracy, timeliness, and compliance. These professionals often use a payroll accounting system.
Precise payroll accounting involves calculating wages, deductions, commissions, bonuses, and taxes. Professionals may need to reconcile or audit payroll accounts and investigate and report irregularities.
Calculate Net Wages: Accountants must track factors like hours worked, gross wages, taxes, and benefits. Taxes and benefit calculations may include health insurance contributions and deductions for employer and employee taxes. Process Payroll Transactions: Accountants issue payments in the employee's desired format, such as check or direct deposit. They need to ensure payroll accounts have sufficient funds to cover wages, and that processing times adhere to the required payday schedules. Follow Labor Laws: Payroll must followfederal, state, and local government labor and wage laws. These may include minimum wage requirements, overtime, and worker compensation programs. Work With Accounting Systems: Payroll software systems help accountants organize and manage their records. These systems help streamline calculations and reports based on initial employer inputs. Accountants may need to know how to manage these systems, audit their results, and upgrade them when needed. Maintain Accurate Records: Payroll systems make accounting activities easier, but these professionals still need to input and update employment records. They need to stay on top of new hires and terminations, plus any changes to pay rates, organizational policies, and government regulations.
Key Hard Skills for Payroll Accountants
Payroll Functions: Payroll accountants need to balance data, structure compensation packages, and calculate and report taxes and deductions accurately. They also need to know how to process payments and create the required reports. Payroll Software: Payroll accountants need familiarity with payroll software. While skills do not always transfer between software types, employers may require general technical skills and payroll software processing experience. Compliance: Payroll accounting requires compliance with government regulations and best practices regarding wages, deductions, hours worked, and taxes. Professionals need to know what laws to adhere to and how the laws impact employee pay. Mathematical: Accountants need general numeracy skills. They may also need advanced math skills, such as the ability to conduct statistical analysis or valuations and modeling using calculus.
Key Soft Skills for Payroll Accountants
Detail-Oriented: Payroll accountants need to be careful and precise when inputting, reviewing, and analyzing data. Small errors can prove costly if undetected. Successful accountants need patience and an eye for details. Problem-Solving: Payroll accountants find solutions to challenging problems. They may develop new practices, reconcile and audit data, or solve problems in the accounting systems. Problem-solving skills can help when analyzing and reporting on data. Leadership: Leadership skills enable payroll accountants to develop processes and practices for employees. Employees look to them for answers regarding their compensation and benefit packages.. Communication: Payroll accountants need to communicate clearly with employees about paychecks and the payroll system. They also share ideas and instructions with other payroll and accounting staff. Communication skills help these professionals develop and present reports.
Payroll Accounting Areas of Expertise
With experience and training, payroll accountants develop specialized skills and knowledge of policies and practices that make them experts in certain fields or industries.
They may also specialize in certain types or sizes of organizations. The following section highlights positions that payroll accountants may access at various stages of their career.
Payroll clerks are entry-level accounting clerks who record all payroll data and perform the necessary calculations. They ensure the accuracy of all recorded information and prepare paychecks for the staff. In large organizations, payroll clerks may report to accounting or financial managers.
Depending on their position, they may focus entirely on reporting and calculations, or they may produce reports and analysis for management.
In small organizations, clerks may handle additional accounting responsibilities, such as overseeing all financial statements and tax requirements. With experience and continuing education, payroll clerks can take on more responsibility and leadership positions.
Common Job Titles
Accounting Clerk Timekeeping Clerk Payroll Coordinator Payroll Assistant
Operational accountants help organizations refine their operations and reduce costs. They may oversee all budgets and costs, or specialize in areas like supply chain or payroll. These specialists analyze spending, financial reports, budget efficiency, and performances to determine if and how the organization can improve its financial health.
These accountants then submit reports of their analysis to help management make more informed decisions. They also conduct audits and reviews to find inconsistencies and areas for improvement.
Experienced operational accountants can add areas of expertise and move into management accounting or financial management roles.
Common Job Titles
Financial managers oversee most, if not all, of an organization's financial activities. They manage spending and budgets or specialize in specific areas, such as payroll management. They conduct analysis and create reports regarding financial decisions, risks, and opportunities.
Depending on their position, financial managers may need data analysis skills, planning and preparation abilities, and knowledge of certain laws and regulations. For example, payroll managers need to understand labor and worker compensation laws and IRS requirements.
Experienced financial managers may advance into financial executive or top management positions.
Common Job Titles
Budget analysts develop and look over budgets for organizations. This helps those organizations control their spending and financial health.
These professionals conduct market research to identify industry trends and opportunities. Internal research may include cost-benefit analysis to find optimal efficiency and improve future decisions.
Budget analysts may work on consulting contracts or specialize in reviewing budget proposals and checking them for compliance. They may also specialize in budget policy and effectiveness for the government.
Experienced budget analysts may advance into financial management and management analyst roles.
Common Job Titles
Budget Coordinator Financial Analyst Policy Analyst
How to Become an Accountant for Payroll
The educational requirements for payroll accountants vary by organization and role, but most professionals need a bachelor's in accounting at minimum.
These four-year degrees provide the foundational knowledge and skills for entry-level roles. Organizations with more demanding payroll requirements may prefer candidates with a master's in accounting.
Candidates with an associate in accounting and payroll clerk experience may also qualify for advancement into a payroll accounting position.
Payroll Accountant Salary and Career Outlook
The outlook for accounting careers often reacts to the health of the economy. New businesses and growth within existing organizations creates a greater demand for payroll accountants. The Bureau of Labor Statistics (BLS) projects 6% growth for accountant and auditor occupations between 2021 and 2031, plus over 136,000 annual openings.
According to Payscale, the average salary for payroll accountants is $57,109 as of September 2022. Professionals can increase their salaries through relevant experience and additional education or credentials.
Salaries and opportunities may vary by employer, location, and industry.
Questions About the Payroll Accountant Job Description
Is payroll the same as accounting?
While related, payroll and accounting differ in various ways. The accounting process often includes payroll, along with the preparation and analysis of other financial accounts. Payroll focuses on tracking and issuing employee wages and taxes.
What is a payroll accountant's responsibility?
Payroll accountants track and process employee wages based on their compensation agreements, hours worked, and deductions and taxes. These accountants may also produce reports and analyze payroll data.
What specializations can payroll accountants have?
Payroll accountants can specialize in many ways, including by industry or organization size and type. These professionals can also specialize in different types and levels of payroll accounting, such as payroll clerks, accountants, and managers.
Where does a payroll accountant work?
Payroll accountants often work in their organization's offices. They may also work with various clients, requiring them to travel to different offices.
Lizzette Matos is a certified public accountant in New York state. She earned a bachelor of science in finance and accounting from New York University. Matos began her career at Ernst & Young, where she audited a diverse set of companies, primarily in consumer products and media and entertainment.
She has worked in the private industry as an accountant for law firms and ITOCHU Corporation, an international conglomerate that manages over 20 subsidiaries and affiliates. Matos stays up to date on changes in the accounting industry through educational courses.
Lizzette Matos is a paid member of the Red Ventures Education Integrity Network.
Page last reviewed Oct. 3, 2022
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