Payroll checklist for accounting firm

Introduction:

Payroll may look routine on the surface, but anyone handling it knows how quickly it becomes complex. Deadlines shift, tax rates change, and last-minute employee updates pile on pressure. Even the smallest mistake can cause delays, compliance issues, and put client relationships at risk.

This is where a payroll checklist makes all the difference. It gives your team a consistent process to follow, reduces the risk of errors, and helps keep compliance in order even when workloads are high.

In this blog post, we will walk through 7 key steps of a payroll checklist that will help your firm stay organised, manage pay runs with confidence, and strengthen client trust.

7-step payroll checklist that makes each payday stress-free

Here are 7 steps that every firm should follow to make payroll accurate, compliant and stress-free:

Step 1: Collect and verify employee information

The accuracy of payroll begins with accurate employee data. Outdated records are one of the most common causes of mistakes. Before any pay run, you need to confirm that every employee’s information for your client is complete and correct.

This includes:

• Personal and banking details – name, address, contact information, and bank account for salary deposits.
• Employment details – start date, employment type (full-time, part-time, casual), and position title.
• Tax information – Tax File Number (TFN), tax residency status, and any declarations affecting PAYG withholding.
• Superannuation details – super fund name, member number, and contribution arrangements in line with SuperStream requirements.
• Emergency contact details – current emergency contact information to support workplace safety requirements.
• Allowances and deductions – records of salary sacrifice, car allowances, union fees, or other deductions that need to be processed accurately.

When you store this information directly in payroll software rather than scattered across emails or spreadsheets, you avoid duplication and errors. It also saves time during reconciliations and ensures compliance requirements are always met.

Step 2: Verify time and leave records

Before any pay run, it’s important to confirm that time worked and leave taken are both recorded accurately. Mistakes in this area can lead to disputes, reprocessing, or non-compliance with entitlements. Key actions include:

• Ensuring all timesheets or attendance records have been submitted and approved.
• Reviewing leave requests and checking they align with balances on file.
• Accounting for public holidays, overtime hours, and any relevant allowances.
• Following up quickly on anomalies, such as unusually high hours or missing entries.
• Interpersonal conflicts rise due to unmanaged stress levels.

Step 3: Complete payroll calculations

Once attendance and leave data are confirmed, payroll figures can be finalised. This step involves applying deductions, contributions and tax obligations in line with legislation. Make sure to:

• Calculate wages for standard hours, as well as overtime and loadings
• Apply voluntary deductions such as salary sacrifice or additional super contributions
• Process compulsory deductions like child support or garnishments
• Add superannuation at the correct legislated rate and check employee-nominated fund details
• Apply PAYG withholding and review state obligations such as payroll tax and workers’ compensation premiums

Adopt a consistent format that clearly shows each stage of the calculation. This makes payroll easier to review internally and provides clarity if clients request a breakdown.

Step 4: Review and approve the pay run

The review and approval stage is where quality control takes place. Even when data has been prepared carefully, small errors such as a misapplied deduction, an incorrect superannuation calculation or an extra overtime entry can create significant issues if not addressed. To maintain accuracy and compliance, ensure you:

• Generate a payroll summary showing wages, deductions, superannuation and net pay
• Lock the pay period once all entries are complete to avoid unauthorised changes
• Obtain independent approval from a manager, partner or client representative separate from the preparer
• Record approvals and retain them as part of the audit trail for future reviews

Embedding this approval process into every cycle reduces errors, strengthens compliance and demonstrates professionalism to clients.

Step 5: Process payments and issue payslips

Once payroll is approved, the next step is to complete payments accurately and distribute payslips in line with legal requirements. Errors or delays at this stage can damage employee trust and create extra work for your clients. To keep this process efficient and compliant, make sure you:

• Schedule direct deposits with enough lead time for bank processing
• Confirm payment amounts match the approved payroll register
• Generate payslips that meet Fair Work obligations, showing gross pay, deductions, tax withheld and superannuation contributions
• Retain payment confirmations for reconciliation and recordkeeping
• Provide employees with secure access to payslips, ideally in digital form

Moving towards electronic payments and online payslips improves efficiency, strengthens recordkeeping and ensures employees receive timely access to their information.

Step 6: Meet compliance and reporting obligations

Payroll is more than paying employees on time. Every cycle brings obligations that must be lodged correctly to keep your clients compliant and protected from penalties. To stay on track, make sure you:

• Lodge PAYG withholding through the ATO Business Portal.
• Pay superannuation contributions by the required quarterly deadlines
• File BAS with payroll data where applicable
• Submit Single Touch Payroll (STP) reports every pay run
• Record new hires and terminations promptly through STP

Step 7: Maintain records and complete year-end tasks

After each cycle, payroll information must be organised and reported correctly to meet legal requirements. Key tasks are:

• Archive payroll documents for the required retention period
• Reconcile payroll liability accounts on a regular basis
• Finalise Single Touch Payroll (STP) by 14 July each year
• Provide employees with income statements through myGov
• Resolve any discrepancies between payroll data and submitted reports

Keeping records accurate and up to date ensures compliance, supports audits and makes year-end reporting more efficient.

Payroll mistakes that can disrupt your firm’s workflow

Even if your firm has an experienced team, payroll can still create challenges. Here are some of the most frequent mistakes your team needs to watch for:

• Missing superannuation deadlines – Contributions are currently due quarterly, but from 1 July 2026 they must be paid on payday. Delays create compliance risks and extra reconciliation work.
• Incorrect PAYG withholding – Applying the wrong tax rates or overlooking employee declarations leads to mismatched ATO reporting and more rework.
• Employee misclassification – Confusing contractors with employees affects tax, super, and entitlements, leaving your team to resolve errors.
• Outdated employee records – Failing to update bank details or super fund information results in failed payments and unnecessary delays.
• Incomplete leave tracking – Overlooking holidays, overtime, or leave balances causes payroll discrepancies and employee complaints.

By verifying these areas each cycle, your team can avoid unnecessary errors, reduce extra workload, and deliver payroll more efficiently.

Why do many accounting firms choose to outsource payroll?

There comes a point where internal teams cannot keep up with the growing demands of payroll. Managing lodgements, deadlines, and reporting obligations takes time and focus away from higher-value work, which is why many firms turn to outsourcing.

Firms that outsource payroll gain:

• Reduced compliance risk by relying on specialists who handle reporting obligations daily.
• More internal capacity to focus on advisory and higher-value client work rather than repetitive administration.
• Improved client trust through accurate payslips, on-time lodgements, and consistent reporting.
• Scalable support that adapts as your client base grows, without overburdening your team.

At AccountGlobal, we work alongside accounting firms across Australia to manage payroll with precision and accuracy. From calculations to ATO reporting lodgements, we ensure compliance is never compromised. If deadlines and reporting pressures are weighing down your firm, it’s time to let AccountGlobal take that responsibility off your shoulders.

Final thoughts

Penalties, reruns and dissatisfied employees can quickly erode client trust, making payroll one of the most important responsibilities for an accounting firm. By following the steps in the payroll checklist, your team can create a clear framework that ensures accuracy, compliance and consistency with every pay run.

This approach reduces mistakes, safeguards relationships and gives your firm greater confidence in delivering reliable results. At AccountGlobal, we work closely with firms to improve payroll processes, free up capacity and help create space for sustainable growth. Book a chat with us today and learn how we can support your firm’s success.