Payroll is one of those things that is truly experience-heavy. It’s a different way of looking at the same Excel sheets — and yes, most of payroll lives in Excel, at least before the data gets pushed into your payroll software, whether that’s ADP, Dayforce, Push Operations, or anything else.
You have to be extremely careful when entering data. Imagine setting up a new employee profile and getting just one digit of their direct deposit information wrong. The payment will most likely be returned due to the invalid banking details — but not before your employee spends their Friday wondering where their money went, and your manager spends it wondering where you went. Not a great way to end the week.
This is one of the habits payroll practitioners develop early in their careers: an almost obsessive attention to numbers. Because adding a single zero to a paycheque can be the difference between an employee receiving a $1,000 bonus and a $10,000 bonus — and you receiving a very different kind of parting gift. 🙂
But data entry is just one piece of it.
Know Your Payroll Software
At the heart of almost every payroll platform is the earnings and deductions section. On the earnings side, you’ll typically find codes for things like hourly pay, salary, piecework, overtime, bonuses, and top-ups. On the deductions side, common codes include advances, garnishments, union dues, and benefit premiums.
Advances deserve special attention — and a bit of caution.
The Advance: Pre-Tax or Net?
Here’s where a lot of people get tripped up. Generally speaking, all payments made to employees are taxable. So if an employee requests a $100 advance, you need to record the pre-tax amount as $100, and ensure that the after-tax (net) amount is what actually gets deposited. Your payroll software will typically handle the tax calculation — but you have to be deliberate about entering the gross figure, not the net.
Now flip the scenario. Management decides to award a flat $1,000 bonus — as in, employees are getting exactly $1,000 in hand, no less. In this case, you need to work backwards. You’re not starting with a gross amount; you’re starting with a desired net and calculating the gross that produces it. This is sometimes called “grossing up.”
How this plays out in practice — using Dayforce as an example:
If you’re entering a pre-tax advance, it gets recorded just like any other payroll code. After you process the payroll, Dayforce shows you the after-tax amount that will be deposited to the employee’s bank. Straightforward enough.
It gets a bit trickier when you’re working from the other direction — when you already know the after-tax amount the employee needs to receive, and you have to figure out the pre-tax amount to record. Some payroll providers let you toggle between pre-tax and after-tax directly. In Dayforce, you may need to enter the after-tax figure, process the payroll to see what taxes apply to that amount, and then work backwards to arrive at the correct pre-tax amount to record. It’s an iterative step, but once you’ve done it a few times it becomes second nature.
One more tool worth knowing: the second payrun.
If the advance isn’t part of your regular payroll cycle, most systems allow you to add a second payrun. This is especially useful when, say, your current payroll is for March but you’re making up a shortfall from February. Running them separately isn’t just an organizational choice — it’s a tax treatment choice. Keeping the two payments in separate runs ensures each one is taxed correctly on its own, without the amounts stacking in a way that distorts the withholdings.
Reconcile, Reconcile, Reconcile
Payroll reconciliation is not optional — it’s one of the most important habits you can build. Reconciling your payroll regularly helps you catch errors in a timely manner, before they compound across pay periods or trigger a frustrated call from an employee.
And here’s something worth knowing: if you catch an error early enough, you may not have to live with it. Many payroll systems allow you to apply a stop payment and place a hold on part of the payroll — or even the entire payrun — before the funds are released. That window is short, but it exists. The earlier you’re in the habit of reviewing your numbers, the more likely you are to catch something while you still have options.
And If You Make a Mistake?
It happens. Even to experienced payroll practitioners. The key is to own it quickly, communicate it clearly, and check whether it can be corrected in a future pay run rather than requiring an off-cycle adjustment. Most payroll systems have mechanisms for reversals or catch-up entries — knowing how to use them is part of the job.
What you don’t want to do is let it sit or quietly hope no one notices. Payroll errors have a way of surfacing at the worst possible time.
Payroll is one of those disciplines where the real learning happens on the floor — in the weeds of a pay run, on a deadline, with five unread messages from HR. The software is just the tool. The judgment, the double-checking, the quiet pride in a clean payrun — that comes with time.
And when it all goes smoothly? It’s one of the most satisfying things you can do as an accounting professional. Nobody throws a party when payroll runs on time — but everyone notices when it doesn’t.
