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A payroll accountant ensures that an organization pays employees accurately and on time. They may also maintain payroll records and prepare or file payroll tax returns.
The path to becoming a payroll accountant typically begins with a bachelor's degree in accounting or a related field. Many payroll accountants also pursue certifications through professional organizations, such as the American Payroll Association (APA). Payroll accountants typically have a strong understanding of payroll laws and managing large data sets.
Those seeking employment in the field must be prepared to stand out from other job seekers. Strong analytical and problem-solving skills, along with payroll software experience, may position candidates to land jobs more quickly.
Steps to a Payroll Accountant Career
Steps to become a payroll accountant vary, depending on company size, state mandates, and other requirements. However, there are common steps most professionals take. First, each candidate typically must obtain a high school diploma or its equivalent. The following step-by-step instructions offer a pathway to employment.
Earn a degree: Complete an accredited bachelor's degree in an accounting program, business administration, or another related field. When evaluating accounting programs, confirm the program has institutional and programmatic accreditation. Some students graduate with bachelor's degrees in four years, while part-time students and others with unique circumstances may require more time. Secure an internship: A payroll internship allows learners to gain experience in operations, systems, and organizational culture. Responsibilities may include data entry, preparing reports, and answering questions from employees. Some internships are unpaid, but others include stipends or other benefits. An internship's time commitment may vary, depending on employer requirements. Gain experience: Professional roles typically require about two years of payroll or accounting experience. Payroll duties can include calculating accurate payroll payments, updating systems, preparing internal and external tax reports, conducting internal audits and assessing findings, computing overtime earnings, and updating employee hiring or termination information. Obtain certifications: Certifications provide an objective measure of competence. Some employers may prefer to interview or hire someone with a certification. It could even make them more competitive for promotions. Payroll accountants can pursue certification through professional organizations. Develop professionally: Payroll accountants must keep up with changes in tax laws and regulations. Complete continuing education credits to maintain certifications, remain up to date on the latest developments in the field, and improve existing skills. Professionally network: To recommend relevant fiscal strategies, build and cultivate a network of peers and advanced professionals in the field.
Complete degree: While employers may not require candidates to hold bachelor's degrees in accounting, they may prefer applicants who possess them. Accumulate experience: Employers may require payroll management candidates to have seven years of relevant experience. These professionals keep payroll information organized and up-to-date by developing systems to collect, calculate, and enter payroll data.
Consider an advanced degree: While employers may not require each candidate to hold a master's degree, an advanced degree may afford the opportunity to interview for leadership roles. Gain experience: Accumulate at least eight years of experience in payroll or a related accounting specialty. Initiate certification program: While not always required, seek a certification like the APA's certified payroll professional (CPP) designation to pursue these highly specialized consulting roles. Aspiring payroll consultants can improve their job outlook and earning potential after obtaining certified public accounting (CPA) credentials.
How to Learn Payroll Accounting
Many payroll accountants begin by completing bachelor's degrees in accounting. These programs may require coursework in accounting, auditing, tax law, or even computer science.
However, some employers seek candidates with a master's degree in accounting, business administration, finance, taxation, or a related field. Alternatively, companies may only require an associate degree or certificate in accounting.
Specialists with more advanced education may have better job prospects with higher salaries. Organizations often recruit advanced degree-holders for specialty or leadership roles with direct reports. For instance, a doctoral-level professional specializing in accounting may qualify for niche consulting roles or executive roles.
Payroll accountants spearhead employee payments, oversee tax compliance, and develop new payroll accounting systems. While a payroll accountant with less education may find similar opportunities, these roles may include fewer responsibilities and lower pay.
- Read about associate degree programs in accounting
- Read about bachelor's degree programs in accounting
- Read about master's degree programs in accounting
- Read about Ph.D. degree programs in accounting
How to Become a Certified Payroll Specialist
Although not always required, many employers prefer certified payroll accountants. Most certifications require an exam. With this in mind, research accounting credentials to find certifications that align with your interests and background. Depending on the program, candidates may complete courses virtually or in person.
Optional Certifications and Degrees
Payroll accountants voluntarily complete certifications to advance their careers, improve job security, and increase salary potential. Employers often give preference to candidates who have certain designations.
The CPP credential is widely recognized in the payroll industry. To earn the CPP designation, a candidate must pass a comprehensive exam covering payroll compliance and administration.
Besides the CPP, the APA offers the fundamental payroll certification (FPC). Other options include the certified payroll manager (CPM) and certified payroll administrator designations offered by HRCertification.com.
Finally, the certified payroll specialist (CPS) can be a wise career move for aspiring payroll accountants. The National Association of Certified Public Bookkeepers offers the exam to candidates with at least 12 months of payroll experience.
The FPC covers basic payroll concepts and compliance, while the CPP covers more advanced topics. A CPM credential demonstrates mastery of wage and hour garnishment, fringe benefits, and other payroll-related issues. The CPS exam tests knowledge of payroll and QuickBooks Online.
Each certification involves a comprehensive examination covering many facets of payroll processing. Once awarded, these credentials require continued education and/or reexamination. For instance, individuals must renew CPP credentials every five years, while the FPC requires renewal every three years.
Certified Public Accountant Licensing Requirements
Many payroll accountants may become CPAs. To obtain a CPA license, candidates must pass the Uniform CPA Examination, administered by the state boards of accountancy.
Education and experience requirements vary among states. CPAs must renew their licenses every 1-3 years, with most states requiring them to complete continuing education courses.
Required Experience for a Payroll Accountant
Most payroll accountant positions require at least two years of relevant experience. Professionals who want to become payroll accountants often have on-the-job experience in related fields. Junior roles that may qualify someone for a payroll accountant position include accounting clerk, bookkeeper, and payroll administrator.
A junior-level professional should plan to remain in an entry-level role for at least one year to accumulate more experience. However, education can sometimes substitute for experience, depending on employer requirements.
A person with an accounting degree may have little professional experience. Fortunately, some educational programs allow enrollees to gain education and experience simultaneously through internships.
Should I Become a Payroll Accountant?
A payroll accountant career can be very rewarding. These professionals have a strong outlook for the near future, with the Bureau of Labor Statistics projecting a 6% growth in employment from 2021-2031.
However, candidates should consider several factors when exploring how to become a payroll accountant, including transferable skills required for career advancement.
For instance, individuals must handle complex data entry and manipulation tasks. This occupation also requires excellent organizational skills and the ability to remain calm under pressure.
Payroll accountants' earning potential may be promising. There is potential for growth and career advancement. Payroll accountant job duties are specialized. There are several accounting specialty roles that are payroll accountant-adjacent.
The field is not suitable for everyone as it requires specific hard and soft skills.
The Job Hunt
There are several ways to find employment as a payroll accountant. Candidates commonly start by searching online job boards or job aggregators like Indeed, Monster, and CareerBuilder.
Visit accounting firms' websites or contact a local payroll accounting association. Also, ask your network if they know of any open positions.
Research the market and seek jobs that match your qualifications. Create a resume that showcases marketable skills and highlights any relevant experience held in payroll accounting.
Finally, network with employers and attend career fairs to meet potential employers in person. With the right tools and strategies, you can find the perfect position for your skills and experience.
Experienced payroll accountants can enjoy rewarding and diverse career paths. Thus, new opportunities may surface as the payroll accountant gains more experience and exposure to other specialties.
- Payroll accountants prepare and verify payroll documents, along with calculating and depositing employee wages into designated bank accounts. Financial examiners investigate financial irregularities.
- Financial examiner duties include interviewing witnesses and reviewing financial records. They may provide expert testimony in court and audit financial statements to detect and prevent fraud and white-collar crime.
- Primary industries employing these accounting specialists are banks and other financial institutions, state and local governments, and accounting firms.
Accredited Financial Examiners
- An accredited financial examiner (AFE) is a professional certified by the Society of Financial Examiners. These professionals demonstrate competence in life and health insurance fundamentals, as well as property and liability accounting.
- To obtain the AFE designation, an individual must hold at least a bachelor's degree from an accredited program and pass four AFE exams.
- Similar to credentialed payroll accountants, an AFE holds a degree in accounting or related fields, possesses experience working with financial statements, and must pass a rigorous certification exam.
- The median annual salary for financial examiners was $81,410 as of May 2021.
Questions on How to Become a Payroll Specialist
What do you learn in payroll accounting?
In payroll accounting, students learn to manage and process payroll for companies, organizations, and businesses. These tasks includes calculating employee wages, withholding taxes, and other deductions. Enrollees also learn how to prepare and file payroll reports.
What degree do you need for payroll?
The degree required for payroll accounting may vary depending on the company and position. For instance, some employers may require payroll clerks or payroll managers to have associate's or bachelor's degrees in accounting, business administration, or other related fields.
What certifications do you need to do payroll?
Employers may prefer to hire candidates who have completed payroll or accounting certification programs. These credentials can demonstrate that individuals possess the skills and knowledge necessary to manage payroll processes.
How long does it take to get CPP certification?
There is no set time frame to obtain CPP certification, as the completion time depends on the individual's experience and knowledge in the field. However, successful candidates must meet certain requirements, which include passing an exam with at least three years of experience in payroll administration.
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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