Driven by Data

Best Practices for Payroll – Part 3

As we prepare for an unusual start to the school year, we are striving to make staff feel like valued members of our communities. One element towards that is having routine operations running smoothly so that attention can be focused on the students and their learning experience. Payroll is a predictable element of running a school that, if done well, is hardly thought about by staff – except maybe on pay day! Payroll mistakes, however, can be upsetting, stressful, and take up a lot of administrative time and energy to rectify. This is the third in a series with tips on how to process an error-free payroll based on our extensive payroll experiences with schools. We hope these will be helpful in increasing the accuracy of your payroll.   

Benefits and Deduction Checks

An employee benefit program plays an essential role in attracting and retaining talent for any organization; however, it can be one of the more complicated elements of payroll. Benefit premiums are deducted from employees’ paychecks with the amount reflective of the level of coverage an employee has chosen.

For the purpose of running smooth payrolls, we recommend the following practices: 

    • Automate the open enrollment process and make plan information available online.
    • Perform a detailed review / reconciliation of employee benefit deductions after open enrollment to ensure that the payroll system reflects the updated premium deductions.
    • Ask employees to check their pay stubs regularly to make sure the correct premiums are being deducted.
    • Communicate any deduction changes to employees in advance when deduction adjustments are required.
    • Conduct quarterly benefit reconciliations (comparing actual benefit deductions on employees’ paychecks to benefit invoices). This helps to ensure benefit invoices and coverage reflect what the employee has chosen and is paying for.

Previous posts in this series:

Time & Attendance Approval

Payroll Documentation and Communication

[This series contributed by Zoe Chen, Senior Finance Analyst; Sarah Guthrie, Senior Finance Analyst; Jenny Huang, Finance Lead; Vika Jordan, Senior Finance Analyst;  and Brian Wolcott, Senior Finance Analyst .]