Payroll Audit 2022 – Important Things to Know

Payroll audit often takes place annually and it’s recommended to do audit at least once a year. But what exactly is a payroll audit and why there’s a need to do it? Here are some important things you should know!

What is a payroll audit?

Payroll audit is usually described as a process where organizations review and revise the salaries of their employees. This is a job that usually takes place annually and April is often the month when the new salaries take effect. The payroll audit goes hand in hand with the evaluation of performance. The employee is evaluated on their overall result and receives increase in salary, benefits, or a combination of both, when they have done a good job.

Before the payroll audit, it is common for the employee to be offered a salary meeting with their immediate supervisor.

What does the manager do in the payroll audit?

For many managers, payroll audits can put leadership to the test. The manager must assess the results and performance of the employees and communicate this in a good way. It is important that employees feel that they have been treated fairly. If employees do not understand how they have been paid or if their own salary has been set randomly, the employees’ future performances may have negative effects.

Regardless of whether payroll audit takes place through negotiation or through salary-setting conversations, it is important that the manager have had a good dialogue with the employees. The salary setting in the payroll audit is based on the performance and results of an individual employee during the financial year. Good and excellent performance should reflect the employee behaviors that lead the organization to success. Therefore, it is important that the employee knows from the beginning what is expected to perform and achieve, and what they can do to influence their salary.

As a manager, you need to review the salary structure in the group. You need to find out what your desired salary structure is, and you need to identify the best salary for well-performer employees. Know what salary structure look like in the rest of the company and acquire help from HR or other salary settings to see what the desired salary structure looks like in relation to the rest of the organization.

Make your payroll audit more effective with our service for salary setting

Sysarb has been working on these issues for a long time. Since 2005, we have supported organizations in all sectors in developing good salary setting processes. We have partly helped build up processes and deliver market salary data and made assignments to develop good salary criteria.

Sysarb is a HR tech company, and we have a close collaboration with managers from different kinds of organizations. Our developed platform Enterprise supports the manager in payroll auditing. The tool gives you as a manager a good overview of the relationship between desired salary structure and performance. As a manager, you can assess the performance of your employees. All conversations between you and the employees are documented through the platform - thus you get control and systematics of your payroll audit.