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Key Responsibilities and Required Skills for a Payroll Analyst

💰 $65,000 - $90,000

FinanceHuman ResourcesAccounting

🎯 Role Definition

The Payroll Analyst is a pivotal role within the Finance and Human Resources departments, acting as the guardian of one of the company's most critical and sensitive functions: employee compensation. This position is responsible for the meticulous end-to-end processing of payroll, ensuring every employee is paid accurately and on time. Beyond mere processing, the Payroll Analyst serves as a subject matter expert on payroll laws, tax regulations, and company policies. They are analytical problem-solvers who audit complex data, reconcile accounts, generate insightful reports, and drive process improvements to enhance efficiency and compliance. This role requires a unique blend of technical proficiency, unwavering attention to detail, and strong interpersonal skills to support employees and collaborate across departments.

📈 Career Progression

Typical Career Path

Entry Point From:

  • Payroll Coordinator / Specialist
  • HR Assistant with payroll duties
  • Junior Accountant / Staff Accountant

Advancement To:

  • Senior Payroll Analyst
  • Payroll Manager / Supervisor
  • Compensation & Benefits Manager

Lateral Moves:

  • HR Generalist
  • Financial Analyst
  • HRIS Analyst

Core Responsibilities

Primary Functions

  • Execute the complete, end-to-end payroll processing cycle for a diverse employee population (e.g., salaried, hourly, contract) across multiple states or jurisdictions, ensuring timeliness and accuracy.
  • Meticulously review and audit all payroll-related data before transmission, including timesheets, new hire information, terminations, and pay rate changes, to verify accuracy and adherence to company policy.
  • Manage and process complex payroll transactions, such as bonuses, commissions, stock-based compensation, retroactive pay adjustments, and severance packages.
  • Administer and ensure the accurate calculation and processing of employee wage garnishments, child support orders, and tax levies in compliance with federal and state regulations.
  • Serve as the primary point of contact for employee inquiries regarding pay, deductions, and tax withholdings, providing clear, professional, and timely resolutions.
  • Conduct regular and ad-hoc audits of payroll records and processes to ensure data integrity and identify discrepancies for immediate correction.
  • Reconcile payroll-related general ledger accounts in collaboration with the Accounting department, resolving any variances and preparing necessary journal entries.
  • Ensure strict compliance with all federal, state, and local payroll, wage, and hour laws (including FLSA), and stay current on changing legislation.
  • Prepare and file all quarterly and annual payroll tax reports, including Forms 941 and 940, and manage year-end processes such as W-2 and 1099 generation and distribution.
  • Maintain and configure the payroll system (e.g., ADP, Workday, UKG), including setting up new earning/deduction codes, updating tax jurisdictions, and troubleshooting system issues.
  • Process and validate data for off-cycle or manual checks as required for terminations, corrections, or other special circumstances.
  • Collaborate closely with the Human Resources department to ensure seamless data flow and accuracy for new hires, status changes, benefits deductions, and terminations.
  • Generate and analyze a variety of standard and custom payroll reports for management, finance, and external auditors to support business decisions and compliance requirements.
  • Manage the registration and maintenance of state and local tax accounts for new business locations to ensure proper tax withholding and reporting.
  • Participate in the implementation and testing of new payroll system modules, upgrades, or integrations with other HR/Finance systems.

Secondary Functions

  • Assist the Senior Payroll Analyst or Manager with special projects, such as mergers and acquisitions, system conversions, or process improvement initiatives.
  • Develop and maintain comprehensive documentation for all payroll processes, procedures, and internal controls to ensure business continuity.
  • Support internal and external audit requests by providing required documentation, explanations, and reconciliations for payroll, tax, and benefits data.
  • Contribute to the development and delivery of training materials for managers and employees on payroll-related topics, such as timecard approval and understanding payslips.
  • Research and resolve notices and inquiries from various tax agencies, providing detailed responses and ensuring all issues are fully resolved.
  • Analyze payroll data to identify trends, forecast payroll costs, and provide insights to leadership regarding labor expenses and overtime.

Required Skills & Competencies

Hard Skills (Technical)

  • Advanced Payroll Systems Proficiency: Hands-on expertise with major payroll platforms like ADP Workforce Now, Workday Payroll, UKG Pro, or Paycom.
  • Multi-State Payroll Expertise: In-depth knowledge of payroll regulations, tax laws, and reporting requirements across multiple U.S. states.
  • Microsoft Excel Mastery: Advanced ability to use pivot tables, VLOOKUP, complex formulas, and data analysis functions for reporting and reconciliation.
  • Payroll Tax Compliance: Strong understanding of federal, state, and local payroll tax laws, including filing requirements and year-end procedures (W-2s).
  • Garnishment Administration: Proficient in interpreting and processing various types of wage garnishments in compliance with legal limitations.
  • General Ledger (GL) Reconciliation: Experience in reconciling payroll accounts to the general ledger and preparing correcting journal entries.
  • HRIS/ERP Integration Knowledge: Understanding of how payroll systems integrate with HRIS and ERP systems (e.g., SAP, Oracle).

Soft Skills

  • Extreme Attention to Detail: A meticulous and precise approach to data entry, auditing, and review to ensure 100% accuracy in all outputs.
  • Analytical & Problem-Solving Skills: The ability to dissect complex payroll issues, identify root causes, and implement effective solutions.
  • Discretion and Confidentiality: Unquestionable integrity and the ability to handle highly sensitive and confidential employee information with the utmost professionalism.
  • Effective Communication: Clear and concise written and verbal communication skills to explain complex payroll information to employees and stakeholders.
  • Time Management & Organization: Exceptional ability to manage multiple deadlines, prioritize tasks, and maintain composure in a fast-paced environment.
  • Customer Service Orientation: A dedicated and empathetic approach to resolving employee inquiries and concerns.

Education & Experience

Educational Background

Minimum Education:

  • Bachelor’s degree in a relevant field or an Associate's degree combined with significant, directly-related experience.

Preferred Education:

  • Bachelor’s degree.
  • Certified Payroll Professional (CPP) or Fundamental Payroll Certification (FPC) is highly regarded.

Relevant Fields of Study:

  • Accounting
  • Finance
  • Business Administration
  • Human Resources

Experience Requirements

Typical Experience Range: 2-5 years of direct, hands-on experience in processing payroll.

Preferred: Experience processing payroll for an organization with 500+ employees across multiple states. Experience in a publicly-traded company or a fast-growth environment is a plus.

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