Payroll Processing Checklist (MLS 2026)

This checklist is designed to help ensure:

•accurate payroll processing

•proper tax handling

•balanced accounting

•correct employee compensation

•successful year-end reporting

Using a consistent payroll procedure greatly reduces:

•payroll errors

•tax problems

•accounting discrepancies

•employee disputes

It is strongly recommended that this checklist be:

•printed

•reviewed during each payroll cycle

•retained with payroll records

Regular Payroll Processing Checklist

Before Payroll Begins

Employee Setup Review

☐ Verify new employees are fully setup

☐ Confirm employee codes are correct

☐ Verify W-4 withholding information

☐ Confirm payroll periods are assigned

☐ Verify pay methods and rates

☐ Review overtime and commission settings

☐ Verify deduction setup

Tax Setup Review

☐ Confirm Federal tax tables are current

☐ Confirm State tax tables are current

☐ Verify FICA/FUTA/SDI/SUTA settings

☐ Review payroll deduction formulas

☐ Verify payroll tax ID numbers

Time Clock & Labor Review

☐ Review employee timecards

☐ Correct missing punches

☐ Verify overtime hours

☐ Review labor entries on workorders

☐ Confirm payroll date ranges

Payroll Processing Checklist

1. Process Gross Pay

☐ Run Gross Pay Calculation

☐ Verify payroll period dates

☐ Review employee earnings

☐ Verify commissions and incentives

☐ Review overtime calculations

☐ Confirm salary and draw amounts

☐ Verify supplements and bonuses

☐ Review vacation and sick pay

2. Review Gross Pay Results

☐ Compare payroll totals to prior periods

☐ Investigate unusual amounts

☐ Verify employee hours

☐ Confirm payroll advances

☐ Review labor unit calculations

☐ Verify flat-rate calculations

3. Calculate Withholding & Deductions

☐ Run deduction calculations

☐ Verify Federal withholding

☐ Verify State withholding

☐ Confirm FICA/Medicare amounts

☐ Review IRA and retirement deductions

☐ Verify insurance and other deductions

☐ Confirm payroll advances deducted properly

4. Review Net Pay

☐ Review Net Pay amounts carefully

☐ Compare totals to prior payrolls

☐ Investigate unusual deductions

☐ Verify employee balances

☐ Review deduction summaries

☐ Confirm payroll liability totals

Payroll Check Processing Checklist

5. Write Payroll Checks

☐ Verify payroll date

☐ Confirm bank account selection

☐ Verify beginning check number

☐ Test print alignment on plain paper

☐ Print payroll checks

☐ Verify printed check amounts

☐ Verify employee names and dates

6. Payroll Accounting

☐ Run Payroll Accounting

☐ Verify accounting completed successfully

☐ Confirm General Ledger postings

☐ Verify payroll liability balances

☐ Review payroll accounting reports

⚠️ Do NOT begin another payroll until Payroll Accounting is complete.

Payroll Reporting Checklist

7. Print Payroll Reports

☐ Payroll Period Summary

☐ Payroll Tax Report

☐ Employee Deduction Summary

☐ Time Clock Report

☐ Labor Times Report

☐ Payroll Quarterly Summary (if applicable)

☐ Year-To-Date Report (periodically)

Payroll Tax Payment Checklist

8. Process Tax Payments

☐ Review tax liabilities

☐ Verify Federal tax deposits

☐ Verify State tax deposits

☐ Process FUTA/SUTA payments if due

☐ Process SDI payments if required

☐ Record electronic payment confirmations

☐ Verify payroll liability balances updated

Other Deduction Payment Checklist

9. Pay Other Payroll Obligations

☐ Review vendor deduction balances

☐ Verify insurance obligations

☐ Verify retirement contributions

☐ Process garnishment payments

☐ Print vendor payment checks

☐ Confirm accounting updates

Payroll Backup Checklist

10. Backup Payroll Data

☐ Backup payroll database

☐ Backup accounting records

☐ Backup payroll reports

☐ Store backups securely

☐ Retain printed payroll summaries

⚠️ Always backup BEFORE and AFTER major payroll processing.

Monthly Payroll Checklist

At least once per month:

☐ Reconcile payroll bank account

☐ Verify payroll liabilities

☐ Review tax balances due

☐ Review deduction balances

☐ Compare payroll totals to General Ledger

☐ Review employee accrual balances

☐ Archive payroll reports

Quarterly Payroll Checklist

At the end of each quarter:

☐ Run Payroll Quarterly Summary

☐ Run Federal Form 941

☐ Verify quarterly tax deposits

☐ Reconcile payroll liabilities

☐ Review payroll deduction totals

☐ Archive quarterly reports

Annual Payroll Closing Checklist

⚠️ Year-End Payroll Closing should ONLY be performed after ALL payroll processing for the year is complete.

Before Year-End Closing

☐ Complete ALL payroll processing

☐ Verify final payroll checks processed

☐ Run final Payroll Accounting

☐ Process all payroll tax payments

☐ Verify General Ledger balances

☐ Review employee year-to-date totals

☐ Verify payroll liabilities are correct

☐ Confirm all payroll reports are complete

Year-End Reporting

☐ Print Year-To-Date Reports

☐ Print Payroll Tax Reports

☐ Print Employee Deduction Summaries

☐ Print Quarterly Summaries

☐ Print W-2 Forms

☐ Print W-2 Transmittals

☐ Verify W-2 alignment before printing live forms

☐ Reconcile payroll totals with accounting

Backup Before Closing

⚠️ VERY IMPORTANT

☐ Create FULL payroll backup

☐ Create accounting backup

☐ Archive payroll reports securely

☐ Retain historical payroll data

Perform Payroll Year-End Closing

☐ Run Payroll Year-End Closing

☐ Verify history files created

☐ Verify employee totals reset correctly

☐ Run post-closing payroll reports

☐ Confirm new-year payroll setup

After Year-End Closing

☐ Update Federal tax tables

☐ Update State tax tables

☐ Update deduction formulas

☐ Verify payroll ID numbers

☐ Review payroll defaults

☐ Test payroll calculations for new year

Recommended Payroll Best Practices

Always:

☐ Review payroll carefully before printing checks

☐ Reconcile liabilities regularly

☐ Keep tax tables current

☐ Backup data frequently

☐ Retain printed reports

☐ Investigate unusual payroll totals

☐ Correct setup issues at the source

Final Payroll Reminder

Payroll accuracy depends on:

•careful setup

•consistent processing

•regular review

•proper reconciliation

MLS 2026 automates payroll extensively, but:

👉 management review remains essential.

Following this checklist consistently will help ensure:

•accurate payroll

•balanced accounting

•correct tax reporting

•smooth year-end processing

within MLS 2026.