Working as a Payroll Accountant – Accounting with a Human Twist

The role a payroll accountant is an interesting combination of sometimes complex financial transactions and human interaction. The role doesn't end with accounting, however. In many organizations you'll be a critical member of the human resources team, interacting with employees at all levels on issues ranging from compensation to tax withholding to garnishment administration. 

Duties vary with the size and complexity of the organization.  At its most basic, payroll accounting involves collecting hours worked for a certain period and then calculating compensation based on those hours and generating payment.  Sounds rather simple and straightforward, doesn’t it?  In practice, payroll accountants have a large range of responsibilities.

  • Data Management - Compensation is unique for each employee.  Personal data and hours worked are unique as well.  Payroll is only as accurate as the data used to generate it.  The payroll accountant is first a data manager, maintaining required information and historical data and making sure that data is accurate and up to date prior to processing payroll.

  • Maintain Payroll Account(s) – Most companies have one or more bank accounts set aside for payroll.  These accounts are used for all payroll related expenses including tax disbursements.  The payroll accountant is often tasked with maintaining these accounts.

  • Timely Payments – Not only do payroll accountants ensure that employees are paid efficiently and on time, they are also responsible for the timely payment of payroll related payments such as wage garnishment payments and benefit related payments.

  • Payroll Tax Reporting – Payroll accountants prepare and file tax related reporting including federal, state and local withholding, and unemployment insurance. 

  • Bonus Calculation and Tracking – Employees at some companies are entitled to periodic bonus payment based on a set of performance metrics.  Payroll accountants are often involved in calculating these bonuses and tracking them over time. 

  • Audit Preparation and Assistance – Depending on the size and structure of an organization, the payroll accountant can be included in preparation for a payroll audit.  During the audit itself, the payroll accountant works to provide auditors with needed records and supporting documentation.

Human Resources or Accounting?

As a payroll accountant you are part of your organization’s accounting team.  The tasks you perform are definitely accounting tasks, yet often you may feel more a part of the Human Resources team.  Though you will typically be supervised by the Accounting Manager or Controller of your organization, you will also take direction from the Human Resources Manager on a daily basis.

Payroll is an inherently human task.  Employee confidential information is maintained by human resources.  Compensation decisions and analysis are the responsibility of human resources.  As a payroll accountant, you must understand the human aspect of your work.

You will find yourself explaining payroll calculations to employees.  They may not understand why their taxes are higher than normal or how their bonus was calculated.  They may question the commissions they earned or their accrued vacation time.  You are the first person they will go to for an explanation.

Compensation is an emotional issue.  You must be prepared for difficult conversations with anxious employees.  Add to that the needs of employees who are experiencing a life changing event such as divorce or death, and you get an understanding of the compassion and empathy you need for this role.

Professionalism is an important attribute in a payroll accountant.  You must be able to maintain your composure during difficult conversations and yet not compromise accounting principles or company policy.  

Payroll Accountant Jobs – Plentiful and Profitable

If you master the required human resources skills you can expect a comfortable reward.  The average salary for a payroll accountant at a midsize company is between $40,000 and $50,000 per year according to the Bureau of Labor and Statistics. 

Like other accounting jobs, the demand is expected to grow by about 16% in the next few years.  Every organization that has employees needs some method of calculating payroll.  While some companies outsource the actual generation of payroll checks themselves, there is no substitute for the attention to detail and interpersonal skills.