What Should be Included in Your Payroll Manual?

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September 12, 2014

There are many benefits of a payroll manual. First, it’s absolutely essential that your organization has one. It encompasses all payroll policies and procedures in a single, easy to read format. A payroll manual can also assist with training employees. Utilizing a payroll manual guarantees uniform payroll processing by different employees. It won’t matter who processes what departments checks, every check should be processed the same way.  If two different people process the same employee’s payroll, they should come out exactly the same. The manual will be there for guidance and it can answer frequently asked questions. Some manuals may even include accounting codes and/or shortcuts for payroll processors. Finally, the payroll manual should explain the use of standard forms made by the company. Forms can include absence forms, personnel action forms, etc. and the manual can even provide sample forms. This will also make payroll errors less likely.

Common Information Included in a Payroll Manual

Information contained in a payroll manual can include but is not limited to the following:[1]

  • Payroll tax withholding and processing
  • Withholding and garnishments
  • Employee classifications
  • Pay dates
  • Check processing
  • Employee forms
  • Expense reimbursement policies and procedures
  • Record retention requirements
  • Taxation and benefits
  • Administering leave policies and handling absences
  • Time cards and time keeping
  • Minimum wage and overtime
  • Travel time
  • Discrepancies in employee records
  • Responding to employee inquires
  • Correcting employee paychecks
  • Final paycheck upon separation of employment

[1] Pace, Julie A. Creating a Payroll Manual: Putting Your Procedures Into Writing. Eau Claire, WI: Lorman Education Services, 4 June 2014. PDF.

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