Must-Have Payroll Reports by Pay Cycle Phase
Every organization operates differently. But, when it comes to payroll, some challenges affect everyone: compliance, transparency, and accuracy.
It’s easy to look at these challenges and think “no problem – my payroll system can handle that.” But the secret sauce isn’t necessarily the payroll system, but rather the reports it can produce.
That’s why we took the time to come up with the must-have payroll reports. Regardless of whether you’re a fan of SAP SuccessFactors (like us) or if you’re a fan of your existing payroll solution, these reports are critical to your success as a payroll professional.
Looking for a new payroll solution? Learn more about Synchrony Payroll
In order to maximize the value out of these reports, think about them in terms of the pay cycle phase they fit into and when they’ll provide the most relevant insight.
1. Payroll Summary
This report speaks for itself and should be a no-brainier in your practice. A Payroll Summary Report provides visibility on all the key metrics associated with your payroll processes – wages, employee deductions, employer contributions, liabilities, and more. The objective of the report is to consolidate all of the key information you need to successfully submit mandatory local and federal forms.
In addition to its value for external purposes, a well-structured Payroll Summary report simplifies your day-to-day work by serving as a quick reference for your state of payroll.
If your existing payroll solution cannot produce a Payroll Summary report, you should look into another solution or solution extension that will give you this critical insight.
2. Payroll Differences/Variances
It’s naïve to only think of payroll in terms of the present. Looking back and looking forward is equally, if not more important. That’s why the Payroll Differences Report (sometimes referred to as the Payroll Variances Report) is so important.
The Payroll Differences Report allows you to compare planned versus actual pay each cycle, as well as compare one cycle to another to see any changes from the previous pay date range. By showcasing amounts or percentages by which pay was over or under, this report can come exceptionally handy in identifying payroll errors and balancing unplanned changes in pay.
Managing these errors and changes is critical because of the impact it may have of tax, accruals, pension, and compliance.
3. Payroll Exceptions
As much as we aim to “pay employees the right amount every time,” it’s normal and expected that payroll errors occur. But in order to stay true to that mantra, you have to be able to actually see which mistakes are occurring so that they don’t repeat.
That’s why the Payroll Exceptions Report is so important…it helps highlights payroll-related mistakes made in a specified pay date range.
If these types of errors are dealt with ad-hoc (which most of the time they are), the mistakes are resolved retroactively but are not prevented in the future. Summarizing the mistakes in a report and taking a bit of time to review it, look for patters, and see if there is a root cause for recurring payroll errors can enable your organization to be preventative when it comes to paying employees incorrectly.
Did you know 50% of employees would leave an organization after just 2 payroll errors? Learn more in our e-book Rethink, Reimagine, Redesign Payroll with SAP SuccessFactors
4. Payroll Tax Summary
Similar in structure to the holistic Payroll Summary Report, the Payroll Tax Summary report provides more granular detail on those metrics relating to deductions, reductions and taxes on both the employee and employer level.
The main benefit of this report is it’s bottom line – the total of the gross tax amounts required for governmental reporting on a local and federal level. The Payroll Tax Summary Report is probably not the most exciting at its face-value…but it is one of the most important.
5. Payroll Audit
It’s inevitable that payroll is frequently audited to make sure that employees are not overpaid or underpaid, and that employee pay is compliant with local and federal legislation.
So when audits come around, payroll practitioners need to know when payroll data changes, whether it was an intentional change or a mistake, and who was responsible for determining this change. Therein comes the Payroll Audit Report. This report summarizes each employee’s earnings, contributions, deductions, reductions – and more – for a specified pay date range. A strong Payroll Audit Report will also include additional metrics, such as pay cycles, geographic information, employee types/statuses, and any local or federal exemptions.
This report addresses one of the most pressing payroll challenges: compliance. Referring to this report can ensure that your organization is up to date with its varying payroll compliance controls – and be notified if it isn’t. Additionally, Payroll Audit Reports make archiving payroll data much cleaner.
6. Hires and Departures
Hires and Departures may seem like a recruiting and onboarding responsibility, but payroll practitioners have an equal onus in the matter.
The key objective here is to make sure that employees who are newly hired have a great first impression and get paid correctly and on time, and for individuals who leave your company to not become ghost employees who no longer work for your company but still get paid.
Running a Hires and Departures Report will allow you to keep track of exactly this and ensure that employees are compensated accordingly and that their tax information is accurate. It can also provide insight on which departments or regions gross more wages or hire/lose employees over time.
7. Payroll Deductions
The complexity behind payroll deductions lies in the sheet number of forms these deductions can come in – voluntary deductions, involuntary deductions, 401ks, health insurance, work-related expenses…the list goes on and becomes even more complicated when considering local and federal considerations.
Without a clear lens to visualize all of these elements, your company is more likely to have issues with employee paychecks or risk making tax related errors that break compliance. And a lack of compliance can cause strict governmental penalties and consequences.
Your Payroll Deductions Report will therefore make your life easier and your work cleaner when fulfilling your legal requirements as an employer and making sure you are supporting your employees to your full capacity.
1. Employee Classification
Employee classification seems like an administrative pest but carries significant potential liability. Did you know that your organization can suffer thousands of dollars worth of fines per each employee head that is misclassified?
For this reason, the Employee Classification Report is not to be forgotten.
This report – as exemplified in its name – classifies worker types for your employees. This includes but isn’t limited to full-time, part-time, temporary, seasonal, and contingent workers. Not only can a misclassification have an unpleasant corporate-level impact, but it can also negatively affect an individual employee as well. Employee classification drives benefits and determines how that employee is to be legally treated by local and federal legislation.
2. Pay Gap/Pay Equity
If diversity and inclusion is top of mind at your organization, your payroll solution should generate the Pay Gap Report (also referred to as the Pay Equity Report) on at least a quarterly basis. This report enables you to run a pay equity analysis where you can clearly and objectively identify unfair differences in pay. You should be able to run the report with legitimate factors that cause discrepancy (such as location, role, or experience) against more overlooked factors like gender, race, and many more.
Using this report to identify these types of unexplained discrepancies allow your organization to take action and make tangible change in support of pay equity. Not only is this simply fair to your employees, but it also demonstrates to new talent that you are a equal opportunity employer.
For more insight on how this type of report can help you to mitigate human bias in human resources, check out this research report on Achieving Pay Equity: How Analytics has Evolved to Support True Progress.
1. Earnings History
Like we said in our Payroll Differences Report section, you can’t solely think about payroll in terms of the present – you have to consider the past and the future.
Did you undershoot, meet, or exceed last year’s projections? How much should you account for next year? Summarizing elements like check history, gross earnings, retirement information, withheld tax, and more, an Earnings History Report will enable you to compare your current year to your previous year and help plan for the following year.
In addition to planning, the Earnings History Report gives you a clean chronological archive of the most important metrics for your year.
2. Time off/Leave of Absence
Year in and year out, understanding the time employees take off of work has been important in the payroll world.
In recent years, paid time-off has played an even bigger role. With the stresses of employees working from home all around the world employees have been encouraged to use their days off to take much needed physical and mental breaks.
The payroll impact? Employee time-off accrual, days/hours taken, and available balance data is changing more and more often.
Keeping track of this information is critical because it allows you to better track your employees and make sure you are compliant with both local and federal leave laws. And in a time where leave laws are constantly being adjusted on a local level, having a clear report allows you to act fast when the government does.
So there you have it – your must-have payroll reports sorted by the pay cycle phase where the report is most applicable. Need to run a report on this list, but not sure where to start? Reach out to see how Rizing can help you.