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Occupational Outlook: Payroll and Timekeeping Clerks

Significant Points

  • Payroll and timekeeping clerks are found in every industry.
  • Most employers prefer applicants with a high school diploma; computer skills are very desirable.
  • Those who have completed a certification program, indicating that they can handle more complex payroll issues, will have an advantage in the job market.

Nature of the Work
Payroll and timekeeping clerks perform a vital function: ensuring that employees are paid on time and that their paychecks are accurate. If inaccuracies occur, such as monetary errors or incorrect amounts of vacation time, these workers research and correct the records. In addition, they may perform various other clerical tasks. Automated timekeeping systems that allow employees to enter the number of hours they have worked directly into a computer have eliminated much of the data entry and review by timekeepers and have elevated the job of payroll clerk. In offices that have not automated this function, however, payroll and timekeeping clerks still perform many of the traditional job functions.

The fundamental task of timekeeping clerks is distributing and collecting timecards each pay period. These workers review employee work charts, timesheets, and timecards to ensure that information is properly recorded and that records have the signatures of authorizing officials. In companies that bill for the time spent by staff, such as law or accounting firms, timekeeping clerks make sure that the hours recorded are charged to the correct job so that clients can be properly billed. These clerks also review computer reports listing timecards that cannot be processed because of errors, and they contact the employee or the employee’s supervisor to resolve the problem. In addition, timekeeping clerks are responsible for informing managers and other employees about procedural changes in payroll policies.

Payroll clerks, also called payroll technicians, screen timecards for calculating, coding, or other errors. They compute pay by subtracting allotments, including Federal and State taxes and contributions to retirement, insurance, and savings plans, from gross earnings. Increasingly, computers are performing these calculations and alerting payroll clerks to problems or errors in the data. In small organizations or for new employees whose records are not yet entered into a computer system, clerks may perform the necessary calculations manually. In some small offices, clerks or other employees in the accounting department process payroll.

Payroll clerks record changes in employees’ addresses; close out files when workers retire, resign, or transfer; and advise employees on income tax withholding and other mandatory deductions. They also issue and record adjustments to workers’ pay because of previous errors or retroactive increases. Payroll clerks need to follow changes in tax and deduction laws, so they are aware of the most recent revisions. Finally, they prepare and mail earnings and tax-withholding statements for employees’ use in preparing income tax returns.

In small offices, payroll and timekeeping duties are likely to be included in the duties of a general office clerk, a secretary, or an accounting clerk. However, large organizations employ specialized payroll and timekeeping clerks to perform these functions. In offices that have automated timekeeping systems, payroll clerks perform more analysis of the data, examine trends, and work with computer systems. They also spend more time answering employees’ questions and processing unique data.

Working Conditions
Payroll and timekeeping clerks usually work in clean, pleasant, and comfortable office settings. Clerks usually work a standard 35- to 40-hour week; however, longer hours might be necessary during busy periods. Payroll and timekeeping clerks also may face stress at times, particularly from the pressure to meet deadlines.

Training, Other Qualifications, and Advancement
Most employers prefer applicants with a high school diploma or GED. Computer skills are very desirable. Payroll and timekeeping clerks learn their skills through a combination of on-the-job experience and informal training. Training also can be attained through programs in high schools, business schools, and community colleges. New workers receive training in payroll, timekeeping, personnel issues, workplace practices, and company policies.

Payroll and timekeeping clerks must be able to interact and communicate with individuals at all levels of the organization. In addition, clerks should demonstrate poise, tactfulness, and diplomacy, and have a high level of interpersonal skills in order to handle sensitive and confidential situations.

Most organizations specializing in payroll and timekeeping offer classes intended to enhance the marketable skills of their members. Some organizations offer certification programs; completion of a certification program indicates competence and can enhance one’s advancement opportunities. For example, the American Payroll Association offers two levels of certification, the Fundamental Payroll Certification (FPC) and the Certified Payroll Professional (CPP). The FPC is open to all individuals who wish to demonstrate basic payroll competency. The more advanced CPP is available those who have been employed in the practice of payroll for at least 3 years and who have obtained the FPC within the last 18 months. Both require experience and a passing score on a comprehensive exam.

Employment
Payroll and timekeeping clerks held about 214,000 jobs in 2004. They can be found in every industry, but a growing number work for employment services companies as temporary employees, or for accounting, tax preparation, bookkeeping, and payroll services firms, which increasingly are taking on the payroll function as a service to other companies. Approximately 18 percent of all payroll and timekeeping clerks worked part time in 2004.

Job Outlook
Employment of payroll and timekeeping clerks is expected to grow about as fast as average for all occupations through 2014. In addition to job growth, numerous job openings will arise each year as payroll and timekeeping clerks leave the labor force or transfer to other occupations. Those who have completed a certification program, indicating that they can handle more complex payroll issues, will have an advantage in the job market.

As entering and recording payroll and timekeeping information becomes more simplified, the job itself is becoming more complex, with companies now offering a greater variety of pension, 401(k), and other investment plans to their employees. Also, the growing use of garnishment of wages for child support is adding to the complexity. These developments will fuel the demand for payroll and timekeeping clerks, who will be needed to record and monitor such information.

Firms increasingly are outsourcing the payroll function. As a result, the best employment opportunities are expected to be in companies that specialize in payroll, including companies in the employment services industry and the accounting, tax preparation, bookkeeping, and payroll services industry. Many of these companies are data processing facilities, but accounting firms also are taking on the payroll function to supplement their accounting work.

The increasing use of computers will limit employment growth of payroll and timekeeping clerks. For example, automated time clocks, which calculate employee hours, allow large organizations to centralize their timekeeping duties in one location. At individual sites, employee hours increasingly are tracked by computer and verified by managers. This information is compiled and sent to a central office to be processed by payroll clerks. In addition, the growing use of direct deposit will reduce the need to draft paychecks, because these funds are transferred automatically each pay period. Also, more organizations are allowing employees to update their payroll records electronically. In smaller organizations, payroll and timekeeping duties are being assigned to secretaries, general office clerks, or accounting clerks. Furthermore, the greater complexity of the job, coupled with the automation of records that is simplifying data entry, is resulting in payroll professionals, not payroll and timekeeping clerks, doing more of the work.

Earnings
Salaries of payroll and timekeeping clerks may vary considerably. The region of the country, size of city, and type and size of establishment all influence salary levels. Also, the level of expertise required and the complexity and uniqueness of a clerk’s responsibilities may affect earnings.

Median annual earnings of payroll and timekeeping clerks in May 2004 were $30,350. The middle 50 percent earned between $24,430 and $36,930. The lowest 10 percent earned less than $19,680, and the highest 10 percent earned more than $44,270. Median annual earnings in the industries employing the largest numbers of payroll and timekeeping clerks in May 2004 were:

Management of companies and enterprises

$32,600

Elementary and secondary schools

32,390

Local government

31,620

Accounting, tax preparation, bookkeeping, and payroll services

29,040

Employment services

28,010

Some employers offer educational assistance to payroll and timekeeping clerks.

Related Occupations
Payroll and timekeeping clerks perform a vital financial function—ensuring that employees are paid on time and that their paychecks are accurate. In addition, they may perform various other office and administrative support duties. Other financial clerks include bill and account collectors; billing and posting clerks and machine operators; bookkeeping, accounting, and auditing clerks; gaming cage workers; procurement clerks; and tellers.

Source: U.S. Department of Labor, Bureau of Labor Statistics
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