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Updated Apr 02, 2024

What is Payroll Reporting?

The payroll process includes many elements, from onboarding to taxes to benefits. Here is what you need to know.

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Julie Thompson, Senior Writer & Expert on Business Operations
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Payroll is a responsibility employers shouldn’t take lightly. The payroll process has many moving parts, from onboarding employees and recurring paychecks to taxes, deductions and benefits. Payroll reports can help you understand actual labor costs, budget for additional expenses and stay compliant with federal, state and local agencies. 

We’ll guide you through the payroll report process, including the types of reports you should be running and the benefits of utilizing automated payroll report software to keep your business on track.

Editor’s note: Looking for the right online payroll software for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

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.

TipBottom line
A liability report doesn’t show the cost of the payroll provider’s service fees. Employers must factor this into the overall payroll cost each 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.

Did You Know?Did you know
Following PTO best practices, such as setting up a clear policy and offering opportunities for personal time off, can help employees feel valued, boost their company loyalty and increase productivity.

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.

FYIDid you know
Depending on the size of your business, you can qualify for an experience modification factor (e-mod). You can lower your workers’ comp premium when you have good safety practices and minimal claims (usually over the past three years).x

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.
author image
Julie Thompson, Senior Writer & Expert on Business Operations
With nearly two decades of experience under her belt, Julie Thompson is a seasoned B2B professional dedicated to enhancing business performance through strategic sales, marketing and operational initiatives. Her extensive portfolio boasts achievements in crafting brand standards, devising innovative marketing strategies, driving successful email campaigns and orchestrating impactful media outreach. Thompson's proficiency extends to Salesforce administration, database management and lead generation, reflecting her versatile skill set and hands-on approach to business enhancement. Through easily digestible guides, she demystifies complex topics such as SaaS technology, finance trends, HR practices and effective marketing and branding strategies. Moreover, Thompson's commitment to fostering global entrepreneurship is evident through her contributions to Kiva, an organization dedicated to supporting small businesses in underserved communities worldwide.
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