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What Are Payroll Reports?
Payroll reports reveal valuable insights about your business and employees. Here’s what you need to know.
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Employers have a crucial responsibility for payroll, which has numerous moving parts — from onboarding employees and issuing paychecks to withholding taxes, managing deductions and administering benefits. Payroll reports can help you understand what’s really happening with your payroll, track actual labor costs, budget for additional expenses, and stay compliant with federal, state and local regulations.
We’ll guide you through the payroll report process, including the types of reports you should be running and the benefits of using automated payroll reporting software to keep your business on track.
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What is a payroll report?
A payroll report is a document that summarizes, records and organizes payroll data for a specific period. Employers use payroll reports to cross-reference financials and meet tax requirements. They typically list essential information such as pay rates, hours worked, overtime, vacation time, tax withholdings and employer tax contributions.
The best online payroll services and software make running payroll reports easy, helping business owners better understand their labor costs and control their budgets.
“Payroll reports are crucial for ensuring financial accuracy and regulatory compliance, while also providing insights that drive strategic workforce planning,” said Jonathan Orze, CFO of InGenius Prep. “They serve as a vital tool for businesses to track labor costs, manage tax obligations and ensure employees are paid accurately and on time.”
Types of payroll reports to run
Payroll reports will vary by payroll provider and business needs, but some are near universal. “The main types of payroll reports include payroll register reports, tax compliance reports and direct deposit reports, each playing a significant role in maintaining efficient payroll operations,” Orze said.
Here’s a quick overview of some of the most-used payroll reports businesses run.
Employee summaries
An employee summary is a quick snapshot of each worker’s essential details. The summaries help ensure payroll accuracy and make it easier to update information. Employee summaries usually include the employee’s name, address, date of hire, employment type (hourly or salary) and tax-withholding status.
Liability reports
A liability report is a simple way to see what your business owes for payroll in a given pay period, including employee wages and your total tax liabilities. It gives you a clear picture of what’s going out so you can plan for upcoming payments.
Paid time off reports
A paid time off (PTO) report shows how much vacation time each employee has taken and how much they have left for the year. Running the report across your workforce helps you track time off, schedule coverage and avoid labor shortages that can create pinch points.
Payroll detail reports
A payroll detail report shows the history of each employee’s paychecks and breaks down everything that went into them. It’s useful for catching pay errors, double-checking tax calculations or backing yourself up during an IRS payroll audit.
Payroll garnishment report
A garnishment report shows which court-ordered deductions must come out of each paycheck for specific employees. It helps you stay on top of what’s owed and meet deadlines for when payments must be sent to specific agencies.
“Garnishment reports track court-ordered deductions, such as child support or wage garnishments, to ensure that mandated payments are deducted correctly and remitted on time, reducing the risk of legal penalties and ensuring compliance with legal obligations,” said Peter Lai, CFO of Engage Wellness.
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
A payroll service charge report shows the status of invoices from your payroll provider, so you know exactly what you’re being charged for and when you’re being charged.
Payroll summary report
A payroll summary report gives an overview of wages, deductions, taxes and net pay for a specific date range. You can run one for an individual employee, a department or your entire workforce. The reports help you keep an eye on labor costs and spot issues before they turn into bigger problems.
“A payroll summary report provides an overview of employee wages, taxes and deductions for a specific period, helping businesses monitor labor costs and detect discrepancies before they become significant issues,” said Brian Chasin, CFO of SOBA New Jersey.
Payroll tax liability report
A payroll tax liability report helps you stay on top of your business’s tax obligations. It shows employee tax withholdings, employer tax contributions and any remaining payroll taxes your business still owes. The reports are key for managing cash flow and staying compliant with federal, state and local tax laws.
Retirement contribution reports
A retirement contribution report lists all payments made to 401(k), 403(b) or similar retirement plans — including some of the best employee retirement plans available. You can also break down the reports by employer and employee contributions. If your company has vesting rules, those details may be included too.
Unpaid employees or deductions-not-taken reports
These reports help you spot payroll discrepancies and errors that can lead to big problems if left unchecked. An unpaid employees report flags anyone on your active roster who didn’t receive a paycheck. If someone shows $0, you’ll need to dig into their record and fix the issue.
A deductions-not-taken report highlights missed or incorrect deductions, such as taxes not being withheld properly. Skipping the report can lead to compliance headaches or, worse, unhappy employees.
Workers’ compensation report
A workers’ compensation payroll report helps your insurance carrier calculate premiums based on actual payroll data. If you use payroll software, you can often integrate it with your workers’ comp provider to generate the reports automatically. They’re also useful if you’re budgeting for workers’ comp, comparing carrier rates or navigating the workers’ compensation claims process.
The importance of payroll reporting
“Effective payroll reporting supports financial transparency, prevents costly errors and ensures employees receive accurate compensation on time, contributing to overall business stability,” Lai said.
Consistent, accurate payroll reporting can do a variety of things.
- Provide up-to-date insights: Payroll reports provide a clear view of employee work patterns and overall labor costs.
- Offer individualized data: Payroll records help employees understand their earnings and simplify their tax preparations.
- Give audit support: Payroll reports can streamline internal business processes and help you proactively prepare for IRS audits.
- Build morale: Staying on top of payroll changes helps you track employee turnover and recognize important milestones — such as birthdays, bonuses and annual reviews — that boost employee engagement.
- Leverage artificial intelligence (AI): Payroll software automates the math and uses AI to flag potentially problematic issues in your payroll data.
Lai emphasized the importance of running reports on a consistent schedule to get the most value from them.
“Year-end tax reports should be prepared annually to meet tax filing deadlines, garnishment reports must be reviewed every payroll cycle to ensure accurate deductions, and payroll variance reports should be run monthly to detect inconsistencies and prevent financial mismanagement,” he said. “Regularly running these reports not only enhances payroll accuracy, but also allows businesses to proactively address issues before they escalate.”
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Example of a payroll summary report
A payroll summary report includes the name of the business and the date requested. It will also include the following payroll activity details.
Gross pay
Gross pay is the total wages the employer pays an employee, either in hours worked or a fixed salary amount. It can also include employee 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 taxes and deductions.
Employer taxes and contributions
Employer taxes and contributions include payroll contributions the employer is responsible for, such as FICA, unemployment and other tax liabilities.
Jennifer Dublino contributed to this article.
