Before The Holiday Rush: 7 Payroll Details Worth Checking This Fall

The end of the year can get busy fast.

Employees take time off. Holiday schedules change. Bonuses may be paid. Businesses bring on seasonal help. Then year-end reporting is right around the corner.

Before all of that hits, fall is a good time to check a few payroll details.

But don’t fall into the trap of only looking for obvious errors. Some of the most useful payroll reviews uncover things that look right on the surface but may not be working correctly behind the scenes.

Here are seven places worth a closer look.

1. LOOK BEYOND EMPLOYEE ADDRESSES

It makes sense to ask employees to confirm their name and address before year-end tax forms are prepared but take the review one step further.

Have any employees moved to a different state? Are employees working somewhere different from where they were hired? Did an employee change their name but never update the required records?

An address change can be more than a mailing issue. Depending on the situation, where an employee lives and works can affect payroll taxes and other employer requirements.

Don’t just ask employees, “Is your address correct?” without also asking yourself how this change whatever it is effects the bigger picture.

2. CHECK PTO RULES, NOT JUST PTO BALANCES

A balance can look correct while the rule creating that balance is wrong.

Before holiday PTO requests pick up, check how your system is actually handling PTO.

Are employees earning time at the correct rate? Does PTO stop or change at certain limits? Are different employee groups following different rules? What happens to unused time at year-end?

If your payroll or timekeeping system calculates PTO automatically, compare the system setup to your actual policy.  Automation only helps when the rule behind it is correct.

3. TEST HOLIDAY PAY BEFORE THE HOLIDAY

Do not make the holiday payroll your test run.

Before the first holiday arrives, confirm who receives holiday pay, how many hours they receive, and whether working on the holiday changes their pay.

Then test how those rules will actually be entered or calculated.

This matters even more if hourly, salaried, full-time, part-time, or other employee groups are treated differently.

A policy can be clear on paper and still be set up incorrectly in payroll.

4. WORK BACKWARD FROM PAYROLL DEADLINES

Bank holidays and office closures can shorten the normal payroll window.

Instead of only marking paydays on the calendar, work backward.

When does payroll need to be submitted? When must time cards be approved? When are payroll changes due? Who is responsible if the normal approver is out?

That last question is easy to miss during the holidays.

An earlier deadline does not help much if the one person who approves payroll is already on vacation.

5. DECIDE HOW EXTRA PAY WILL BE HANDLED

Year-end bonuses, commissions, incentives, and other extra pay can create last-minute payroll questions.

Before sending a list of payments to payroll, confirm what is being paid, when it should be paid, who approved it, and how it should be treated.

Do not assume every extra payment works the same way.

Giving your payroll team the information early creates time to identify questions before the payroll is already being processed.

6. REVIEW MANUAL PAYROLL CHANGES

If you only have time to review one group of payroll changes, start with the ones someone entered manually.

Look at manual adjustments, overrides, new deductions, pay-rate changes, PTO corrections, and other items that required someone to change the normal setup.

Manual changes are sometimes necessary. But they are also worth reviewing because they may not follow the same automatic rules as the rest of your payroll.

Be sure to ask at least two questions:

• Was the change entered correctly?
• Was it supposed to be temporary or permanent?

That second question can uncover settings that were meant for one payroll but never got changed back.

7. FIND YOUR REPEAT CORRECTIONS

Finally, look at the payroll problems you’ve already fixed this year.

Do managers repeatedly miss time card approvals? Does the same type of PTO correction keep showing up? Are hours regularly adjusted after they are submitted?

Look at the pattern because a recurring payroll correction is information. It may be telling you that a deadline is unclear, a system setting is wrong, someone needs training, or the process itself needs to change.

USE FALL AS A PAYROLL TEST RUN

You do not need to audit an entire year of payroll records before the holidays.

Instead, use the quieter weeks before the year-end rush to test the parts of payroll that are about to get more complicated.

Check the rules behind PTO and holiday pay. Review manual changes. Work backward from holiday deadlines. Look for repeat corrections.

You aren’t just looking for something that’s wrong today. You’re thinking ahead and looking for something that could become a much bigger problem during the busiest payroll weeks of the year..