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Terms and Definitions

What is a payroll clerk?

Updated: May 20, 2024

Payroll clerk definition and meaning

A payroll clerk is an accounting professional who manages a company’s employee paychecks. This generally involves reviewing employee time sheets, and entering and updating voluntary or involuntary deductions, as well as calculating and withholding any applicable federal, state, and local taxes.

 

More about payroll clerks and their responsibilities

Also known as a wage manager or compensation clerk, a payroll clerk typically works within a company’s payroll and accounting division. While some small business owners might choose to calculate company payroll tax withholdings on their own, there’s a lot of laws and regulations that employers will need to know in order to do this well. This often means taking time away from running the business, so it’s wise to keep at least one payroll clerk on staff who’s time is dedicated to calculating tax withholdings and deductions, not to mention ensuring the accuracy of employee bonuses, commissions, and any other wages that are owed to a worker by the business.

 

Many companies even allow employees to communicate directly with their payroll clerk, so that employee concerns or questions about their paychecks can be directly addressed. This makes the payroll clerk the first to know when a payroll discrepancy arises. It’s their task to exercise legal compliance when investigating and resolving these discrepancies.

 

The person with the position of payroll clerk is typically expected to stay informed of changes in payroll tax laws throughout the year, including state and jurisdictional tax rates and minimum wages, as well as wage bases and reimbursement guidelines. In addition to tax withholdings, it’s important for payroll clerks to be an expert on anything that may have a direct impact on payroll, like how the varying benefit plans offered by the company affect an employee’s pay.

 

Finally, these payroll experts are responsible for maintaining accurate accounting records of all employee paycheck withholdings and deductions for each pay period. These include things such as federal and state taxes, Medicare, FICA, health insurance, retirement accounts, or garnishments.

 

Using payroll clerk in a sentence

“I’m so glad I hired a payroll clerk to keep track of everyone’s wages because I had no idea I was reimbursing employee mileage wrong, but she caught it right away, and fixed it before it affected anyone’s paycheck.”

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