What is Payroll Reporting?

What is a payroll report?

Employers use a payroll report to cross-reference financials and substantiate tax requirements. A payroll report lists essential information such as pay rates, hours worked, overtime, vacation time, tax withholdings and employer tax contributions.

Payroll reports offer a business a better understanding of its labor costs, helping it exert control over its budgets. 

Types of payroll reports to run

Depending on the payroll provider, the types of payroll reports may vary in name and what they encompass. However, the below reports are the most common between payroll providers.

Employee summaries

Having your employees’ personal information in one place is critical for payroll accuracy and quick edits. Employee summaries include their name, address, date of hire, an indication of hourly or salary rate, and tax withholding.

Liability reports

An employer should know what money is going out for payroll each pay period. For example, a liability report can show employee wages and company-wide tax liabilities for a specific pay period.

Paid time off (PTO) reports

Running a PTO report on your entire workforce will show how many vacation days each employee has used and how many they have remaining for the year. Keeping track of this data can help an employer schedule employees appropriately and prevent labor shortages that can cause pinch points.

Payroll detail reports

Run payroll detail reports to show a history of each employee’s paycheck. Use payroll detail reports to spot an error in pay or calculate taxes correctly or provide them to the IRS if you’re being audited. 

Payroll preview reports

Like a payroll detail report, a payroll preview report gives a detailed, line-by-line account of an individual employee’s earnings and withholdings.

Payroll service charge reports

When using a payroll service provider, run a payroll service charge report to see the status of relevant invoices.

Payroll summary report

Entering a date range can create a payroll summary report on an individual employee, a department or all workers companywide. A payroll summary report includes deductions, gross and net pay, and tax withholdings.

Payroll tax liability report

Payroll tax liability reports are essential for managing your business’s cash flow. The reports show the following:

1. Employee tax withholdings
2. Employer tax contributions
3. How much the employer still owes in payroll taxes (if any)

Retirement contribution reports

Retirement contribution reports list all 401(k), 403(b) or similar benefit plan payments. In addition, you can split reports into employer contributions and employee contributions. These reports may include additional information, such as vesting, if company rules apply.

Unpaid employees or deductions-not-taken reports

Employers use the unpaid employees report to ensure all their active employees receive a paycheck. If an active employee shows $0, they must check their account further and correct the error. The report will also show if a deduction was not processed correctly. A deductions-not-taken report can catch critical errors like insufficient taxes taken out for the employee. Not running this report could cause serious employee retention issues.

Workers’ compensation report

When using payroll software, employers can integrate payroll with workers’ compensation. When combined, running a report will help the employer’s insurance carrier calculate premiums. These reports can also be helpful during the workers’ compensation claims process.

Workers’ compensation payroll reports are beneficial if the employer has a specific worker compensation budget or would like to compare carrier rates.

The importance of payroll reporting

Payroll reporting can help with the efficiency of your business. From streamlining paperwork to employee retention to eliminating costly errors, it benefits both employer and employee by:

• Providing up-to-date insights: Crucial updates inform your employees’ work habits and overall labor costs.
• Offering Individualized data: Payroll reports offer insight into an employee’s pay record and tax preparation.
• Giving audit support: Use payroll reporting to streamline internal business processes and proactively prepare for IRS audits.
• Building morale: Keeping up with employee payroll changes and updates can help you calculate employee turnover. The insights you glean from payroll reports can help you reduce turnover by setting up reminders to celebrate worker milestones, such as birthdays, bonuses and annual reviews.
• Leveraging artificial intelligence (AI): With payroll software, the calculations are automatic. Payroll software’s AI can also alert you to check your payroll data companywide when it sees an error.

>>Learn More: Payroll Deductions Calculator

Example of a payroll summary report

A payroll summary report states the name of the business and the date requested. It will also include the following payroll activity details.

Gross pay

The total wages the employer pays an employee, either in hours worked or a fixed salary amount. Gross pay can also include bonuses, commissions or tips.

Adjusted gross pay

Pretax payroll deductions subtracted from gross pay include retirement contributions, health insurance, short-term and long-term disability, life insurance and flexible spending accounts.

Net pay

Net pay is the amount an employee receives in their paycheck or via direct deposit. Net pay equals gross pay minus any taxes and deductions. 

Employer taxes and contributions

Employer taxes and contributions include payroll contributions that the employer is responsible for, such as FICA, unemployment and other tax liabilities.

Best payroll software for payroll reports 

At business.com, we researched the best payroll reporting software to find options for small businesses.

We examined several essential factors, such as personalization and automation options. We selected the following payroll software as our best picks:

• ADP: We chose ADP because of its personalized compensation and tax information. As your business grows, you can access more detailed payroll report forms and create your own. Learn more in our review of ADP.
• Rippling: We selected Rippling due to its automatic payroll reporting and human resources tools, including employee surveys. Small businesses can add global payroll services to support an international workforce. Learn more in our review of Rippling.
• OnPay: We picked OnPay, which can handle niche industry-specific credits and taxes. Small businesses can use practical features such as a custom report designer and easy-to-access personnel files. Learn more in our review of OnPay.