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Payroll Procedure

The payroll procedure needs to be highly detailed, since it involves a series of steps that must be completed every time without error in order to issue accurate payments to employees. Consequently, the following procedure shows the complete payroll process flow, from entering time card information, through calculating gross and net pay, to the creation and issuance of payments.

Enter Time Card Data into Computer (Payroll Clerk)

1. Access the time card entry screen in the payroll software.
2. For each time card, enter the employee name and number, as well as total regular and overtime hours worked and other types of time as noted on the time card.
3. Match the total time on the screen to the total on the time card.  Then stamp the time card to indicate that it has been entered in the payroll system.
4. Once all time cards are entered, run the missing time cards report and notify supervisors regarding the missing cards.
5. Check off missing cards against the missing time cards report until all have been accounted for.

Enter Other Payroll Changes into Computer (Payroll Clerk)

1. Assemble all employee change forms and deduction authorization forms received since the last payroll was processed.
2. Verify that all change requests have been correctly authorized.
3. Access the payroll software and go to the employee main menu.
4. Select the wage option, and enter the new hourly rate or annual salary amount for any employees for whom there is an authorized wage rate change document.
5. Select the deduction option, and enter the deduction code and dollar amount for each documented deduction.  Be sure to enter a deduction termination code for those that are of limited duration.  Verify that deductions are allocated correctly to each payroll period, so that the total amount of each deduction is accurate on a montly or annual basis.
6. Enter all manual check payments in the manual payment screen for the current period.
7. Compare the garnishments file to the detailed payroll records for the past payroll period to see if any changes are needed to current employee deductions.  If so, make those changes on the garnishments screen.
8. Print the transaction updates report and use it to verify that the correct entries were made.

Process and Review Payroll Calculations (Payroll Clerk and Supervisor)

1. Access the payroll processing screen and run the payroll calculations for the current payroll cycle.
2. Print a preliminary payroll register and compare it to source documents for accuracy.  Run the payroll as many times as necessary until all errors have been eliminated from the payroll.
3. Print a final payroll register and take it to the payroll supervisor for review.  If the supervisor finds no errors, the supervisor initials and dates the first page of the payroll register and files it in a locked storage cabinet.
4. Mark the date and initial each authorization document once it has been entered in the computer system and verified in the payroll register.  File all entered authorization documents in the employee folders.

Create Paychecks (Payroll Clerk and Check Signer)

1. Go to the payroll software and access the check printing option.
2. Insert check stock into the printer.
3. Use the test option to print a sample check and verify that the line spacing is correct.  Repeat as necessary.
4. Print the entire batch of checks.
5. Peset the printer and print all deposit advices for those employees using direct deposit.
6. Print the check register.
7. Have all checks signed by an authorized check signer.
8. Stuff all paychecks in envelopes.

Deposit Withheld Taxes (Payroll Clerk #2)

1. Remove a blank Form 8109 from the IRS-supplied booklet.
2. On the form, enter the month in which the corporate tax year ends, the dollar amount being remitted (source is the tax total on the payroll register), and contact information, and darken the square next to the type of tax being paid.
3. Create a check for the amount of the remittance.
4. Take the completed Form 8109 and check payment to the local bank and obtain a receipt for the payment.
5. File the tax payment receipt by date.
6. Notify the general ledger accountant of the amount of the tax payment.

System Backup and Roll-forward (Payroll Clerk)

1. Back up the payroll database twice.  Leave one copy on-site and send the other copy to the off-site storage location.
2. Reset the software to begin processing the payroll for the next pay period.

Issue Checks (Paymaster)

1. Divide the paychecks into groups by department.
2. Go to each department and hand out paychecks to all employees showing a proper form of picture identification.
3. Upon receipt of a paycheck, each employee signs for it next to his or her name on the employee register.
4. If employees are not available, highlight their names on the employee register and store both the register and unissued checks in the company safe.

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