Eddy’s HR Mavericks Encyclopedia
The world's largest free encyclopedia of HR, with 700+ HR articles and podcasts.
Created by Eddy and our HR Mavericks community.
Payroll Reporting
Your organization's payroll reports provide a wealth of information that can help you understand and control labor costs, provide accurate reporting, and mitigate financial risks. Read on to learn more about payroll reports and their impact.
What Is Payroll Reporting?
Payroll reporting is the process of generating reports that present and analyze information such as compensation, taxes, benefits, and other deductions. These reports help you monitor the health of your organization, provide data for federal, state, and local municipalities, and provide worker’s compensation data.
Why Accurate Payroll Reporting Is Essential
Accurate payroll reporting is essential for several reasons, including managing taxes more efficiently and decreasing employee turnover.
- Taxes. Most US organizations are required to pay certain taxes (e.g. federal unemployment taxes) and other payments to the government for the benefit of their employees. If you are unable to substantiate required tax and other statutory payments, inaccurate payroll records may incur government penalties that impact your budget for wages.
- Deficiencies. Maintaining accurate payroll records helps to identify deficiencies that may impact your organization’s profits. One example of this is identifying areas in which you are spending excessively, such as overtime pay.
- Employee satisfaction. A 2018 survey found that 96% of employees surveyed state that compensation is important or very important to their overall happiness. Reviewing/running payroll reports identifies errors such as incorrect hours reported or hours not paid prior to your employees receiving payment. Accurate payroll increases employee satisfaction, decreasing your overall turnover.
- Audits. Accurate payroll reports are essential for internal and/or external audits. For example, for worker’s compensation, your internal payroll should match your audited payroll. When you review those items in your human capital management (HCM) system, your payroll estimates as seen on your audits should be as accurate as possible to avoid fees.
Types of Payroll Reports
Quite a variety of payroll reports are created and used for many reasons. Below are a few of the most common.
Tax Reports
Most organizations within the U.S. must collect and report payroll data on a monthly, quarterly, and yearly basis to the Internal Revenue Service (IRS). Any wages, tips, and other compensation paid to an employee by your organization must be reported to the IRS via required form(s). For example, taxes your organization deposits should be reported by filing Forms 940, 941, 943, 944, and 945 on paper or through e-file.
Payroll Register Reports
The payroll register report provides payroll expense data for your organization. The report normally consists of your employees’ compensation, deductions, and taxes. In addition, it is a great way to obtain data on the hours worked.
Cash Reports
Need to know just how much cash is needed to process your payroll? Consult the cash requirements report. It also reports how funds are split among direct deposits, taxes, and other deductions.
Deduction Reports
This report illustrates payroll deductions within a specific date range.
Earnings Report
This report covers compensation earned within a certain period. It can include commissions, overtime, and other miscellaneous earnings.
How the Payroll Reporting Process Works
The basic steps to prepare any kind of payroll report include determining the time period and what data is required and then generating and analyzing your report.
Step 1: Determine the Time Period
First, you'll need to decide on the time period your report will reflect. For example, if the report will be used for quarterly tax filings, the time period is from the first to the last day of that quarter.
Step 2: Determine the Required Data
Next, determine the data required for your report. For example, if you're using the report to reconcile medical benefits invoices, you'll want it to list deductions withheld for the period in question.
Step 3: Generate and Analyze Your Report
How you generate your reports depends on whether your organization utilizes a payroll vendor or not. If your organization utilizes payroll software through a vendor, your payroll provider will provide your reports. Many have standard reports that are commonly used and can create custom reports specifically for your organization. If your organization does not use a payroll vendor, you'll input the data into a database such as Excel. Now that you have generated your report, you'll want to analyze it. Analyzing the report allows you to interpret the data in order to assess the health or your organization, answer questions, and make effective decisions.
Tips for Effective Payroll Reporting
Here's a list of actions to consider for effective payroll reporting.
- Classify employees properly (e.g., exempt, non-exempt)
- Prepare for audits (e.g., IRS, worker’s compensation)
- Review tax and payroll deductions for accuracy
- Put workflows in place that streamline management approval of employee time
- Automate processes
- Monitor your organization’s cash flow
- Set reminders for payroll deadlines
- Consider third-party professional assistance such as Eddy or UKG.
Topics
Wendy N. Kelly, MSHRM, PHR, SHRM-CP
Wendy is an HR professional with over 10 years of HR experience in education and health care, both in the private and non-profit sector. She is the owner of KHRServices, a full service HR management agency. She is also SHRM and HRCI certified, serves as a HRCI Ambassador, and voted 2021 Most Inclusive HR Influencer.
Frequently asked questions
Other Related Terms
Eddy’s HR Mavericks Encyclopedia
Payroll Reporting
Your organization's payroll reports provide a wealth of information that can help you understand and control labor costs, provide accurate reporting, and mitigate financial risks. Read on to learn more about payroll reports and their impact.
What Is Payroll Reporting?
Payroll reporting is the process of generating reports that present and analyze information such as compensation, taxes, benefits, and other deductions. These reports help you monitor the health of your organization, provide data for federal, state, and local municipalities, and provide worker’s compensation data.
Why Accurate Payroll Reporting Is Essential
Accurate payroll reporting is essential for several reasons, including managing taxes more efficiently and decreasing employee turnover.
- Taxes. Most US organizations are required to pay certain taxes (e.g. federal unemployment taxes) and other payments to the government for the benefit of their employees. If you are unable to substantiate required tax and other statutory payments, inaccurate payroll records may incur government penalties that impact your budget for wages.
- Deficiencies. Maintaining accurate payroll records helps to identify deficiencies that may impact your organization’s profits. One example of this is identifying areas in which you are spending excessively, such as overtime pay.
- Employee satisfaction. A 2018 survey found that 96% of employees surveyed state that compensation is important or very important to their overall happiness. Reviewing/running payroll reports identifies errors such as incorrect hours reported or hours not paid prior to your employees receiving payment. Accurate payroll increases employee satisfaction, decreasing your overall turnover.
- Audits. Accurate payroll reports are essential for internal and/or external audits. For example, for worker’s compensation, your internal payroll should match your audited payroll. When you review those items in your human capital management (HCM) system, your payroll estimates as seen on your audits should be as accurate as possible to avoid fees.
Types of Payroll Reports
Quite a variety of payroll reports are created and used for many reasons. Below are a few of the most common.
Tax Reports
Most organizations within the U.S. must collect and report payroll data on a monthly, quarterly, and yearly basis to the Internal Revenue Service (IRS). Any wages, tips, and other compensation paid to an employee by your organization must be reported to the IRS via required form(s). For example, taxes your organization deposits should be reported by filing Forms 940, 941, 943, 944, and 945 on paper or through e-file.
Payroll Register Reports
The payroll register report provides payroll expense data for your organization. The report normally consists of your employees’ compensation, deductions, and taxes. In addition, it is a great way to obtain data on the hours worked.
Cash Reports
Need to know just how much cash is needed to process your payroll? Consult the cash requirements report. It also reports how funds are split among direct deposits, taxes, and other deductions.
Deduction Reports
This report illustrates payroll deductions within a specific date range.
Earnings Report
This report covers compensation earned within a certain period. It can include commissions, overtime, and other miscellaneous earnings.
How the Payroll Reporting Process Works
The basic steps to prepare any kind of payroll report include determining the time period and what data is required and then generating and analyzing your report.
Step 1: Determine the Time Period
First, you'll need to decide on the time period your report will reflect. For example, if the report will be used for quarterly tax filings, the time period is from the first to the last day of that quarter.
Step 2: Determine the Required Data
Next, determine the data required for your report. For example, if you're using the report to reconcile medical benefits invoices, you'll want it to list deductions withheld for the period in question.
Step 3: Generate and Analyze Your Report
How you generate your reports depends on whether your organization utilizes a payroll vendor or not. If your organization utilizes payroll software through a vendor, your payroll provider will provide your reports. Many have standard reports that are commonly used and can create custom reports specifically for your organization. If your organization does not use a payroll vendor, you'll input the data into a database such as Excel. Now that you have generated your report, you'll want to analyze it. Analyzing the report allows you to interpret the data in order to assess the health or your organization, answer questions, and make effective decisions.
Tips for Effective Payroll Reporting
Here's a list of actions to consider for effective payroll reporting.
- Classify employees properly (e.g., exempt, non-exempt)
- Prepare for audits (e.g., IRS, worker’s compensation)
- Review tax and payroll deductions for accuracy
- Put workflows in place that streamline management approval of employee time
- Automate processes
- Monitor your organization’s cash flow
- Set reminders for payroll deadlines
- Consider third-party professional assistance such as Eddy or UKG.
Topics
Wendy N. Kelly, MSHRM, PHR, SHRM-CP
Wendy is an HR professional with over 10 years of HR experience in education and health care, both in the private and non-profit sector. She is the owner of KHRServices, a full service HR management agency. She is also SHRM and HRCI certified, serves as a HRCI Ambassador, and voted 2021 Most Inclusive HR Influencer.
Frequently asked questions
Other Related Terms
Eddy's HR Newsletter
Sign up for our email newsletter for helpful HR advice and ideas.
