Audit Payroll Processes Services

The Vendor is required to provide to conduct an independent, comprehensive Payroll Audit to evaluate the accuracy, completeness, and compliance of the organization’s payroll processes.
- The audit must include a detailed verification of all payroll tax and benefits calculations, withholdings, filings, and remittances.
- Objectives:
o Payroll accuracy assessment — Validate that employee compensation, hours, rates, and adjustments are calculated correctly.
o Tax verification — Confirm accuracy of all payroll tax withholdings, employer tax liabilities, and tax remittances.
o Benefits and deduction verification – Confirm accuracy of all payroll withholdings related to benefits including, but not limited to, pension funds and insurance.
o Compliance evaluation — Assess adherence to federal, state, and local payroll regulations.
o Process and control review — Evaluate the effectiveness of payroll controls, segregation of duties, and system safeguards.
o Risk identification — Identify errors, inefficiencies, or compliance risks within payroll operations.
o Recommendations — Provide actionable improvements for accuracy, compliance, and efficiency.
- Payroll Data Review
o Employee master data (hire dates, pay rates, classifications, tax elections)
o Timekeeping records and approvals
o Overtime calculations and premium pay
o Deductions (benefits, garnishments, retirement contributions)
o Payroll registers for selected periods
- Tax Amount Verification
o Federal income tax withholding (FIT)
o Social Security and Medicare taxes (employee and employer portions)
o Unemployment taxes (FUTA/SUTA)
o Taxable wage base calculations
o Quarterly and annual tax filings (Forms 941, 940, W-2, W-3, state equivalents)
o Bi-weekly tax remittance timing and accuracy
o Payroll registers
o Tax liability reports
o Tax payment confirmations
o Government filing records
- Benefits & Deductions Verification
o Employee pension withholding
o Employer pension contribution
o Employee insurance (health, dental, life, etc.) withholding
o Employer insurance contribution (health, dental, life, etc.)
o Other employee benefits
o Garnishment calculations
- Compliance Review
o Fair Labor Standards Act (FLSA)
o State wage and hour laws
o IRS regulations
o Record retention requirements
o Garnishment and child support rules.