What is payroll and what does a payroll professional do?

Payroll relates to the process of calculating and distributing wages, expenses, bonuses and deductions in an organisation. Processing payroll requires the maintenance of financial records, an understanding of current regulations, detailed tax knowledge, and a highly organised system that can be relied upon to pay each employee the right amount.

Payroll professionals are ultimately responsible for ensuring payroll expenses and taxes are paid correctly and on time. They handle all tasks involved in payroll to compensate employees for hours worked (i.e. tracking, calculating, and distributing payment). A payroll manager will supervise and co-ordinate the payroll department and other payroll workers such as payroll officers, assistants or administrators.

Key responsibilities

Responsibilities will vary, but examples include:

  • Establishing comprehensive processes and procedures for payroll.
  • Identifying areas where systems could be improved or creating solutions to existing problems.
  • Entering payroll data into systems and keeping files up to date.
  • Verifying accurate salary/wage calculations, overtime, holiday and termination pay.
  • Working to strict deadlines to ensure salaries/wages are issued accurately and paid on time.
  • Taking responsible for all wage, tax, and service reports.
  • Developing a formal reporting system to communicate results of audit activities to management and regulatory compliance agencies.
  • Advising and liaising with HR staff and briefing company directors.
  • Keeping abreast of changes in legislation and HMRC rules which affect payroll.
  • Resolving discrepancies and dealing with queries.

Why are they important?

This is a key role in any organisation to ensure employees are paid correctly and on time and that all relevant taxes and national insurance contributions (NI) are calculated and correctly submitted to HMRC.

Skills needed for this role

Strong numeracy and mathematical skills are essential as is an excellent working knowledge of the rules and regulations affecting payroll. Good communication skills are also required in order to effectively liaise with clients, HR staff and company employees but individuals must also be able to exercise discretion and confidentiality. Strong attention to detail, organisation and the ability to work under pressure are also needed in this role.

Strategic Professional Options examinations linked to this role

Advanced Performance Management

Advanced Taxation

Career opportunities presented by this role

Payroll professionals are required in nearly all organisations so opportunites are widely available. With experience gained over several years this can be a very rewarding career path, leading to more senior positions in larger companies and working in global organisations.

Competencies

High level competencies required include:

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

     

  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Management accounting

    A. Applies development and performance management, in the wider business and technological environment, within the context of strategic planning and implementation.

    B. Directs organisational performance through the selection and measurement of financial and non-financial performance indicators.

    C. Collaborates on the key tactical and organisational areas of budgeting and control, capital investments, people and resource management.

    D. Consults on the design and use of current and emerging technology and information systems to improve strategic decision-making and organisational performance.

     

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.