Preparing for Mid-Year Payroll Reviews: What to Check & Adjust
The middle of the year is the perfect time for organizations of all sizes to conduct a payroll review. A mid-year payroll check ensures that your payroll processes remain accurate, compliant, and optimized for efficiency. By identifying and correcting any discrepancies now, you can avoid year-end payroll headaches and ensure smooth operations. Here’s what you should check and adjust during your mid-year payroll review.
Verify Employee Information
Start by reviewing employee records to ensure accuracy in payroll processing:
- Confirm correct employee classifications (full-time, part-time, contractor, exempt, non-exempt).
- Update addresses, tax withholding forms (W-4s), and direct deposit details.
- Ensure any promotions, raises, or role changes are reflected correctly.
Review Payroll Tax Withholdings
Mid-year is an ideal time to verify payroll tax withholdings and ensure compliance with federal, state, and local tax laws:
- Confirm that the correct tax rates are applied.
- Ensure Social Security, Medicare, and unemployment taxes are calculated correctly.
- Check if any employees need to update their withholding status due to life changes.
Audit Payroll Deductions
Payroll deductions should be reviewed for accuracy and compliance:
- Verify health insurance, retirement contributions, and other voluntary deductions.
- Ensure compliance with garnishments and child support orders.
- Confirm pre-tax and post-tax deduction accuracy.
Assess Overtime and Wage Compliance
Review employee hours and wages to ensure compliance with labor laws:
- Confirm that overtime pay is calculated correctly for non-exempt employees.
- Ensure that wages meet federal and state minimum wage laws.
- Address any miscalculations or discrepancies that could lead to penalties.
- Reconcile Payroll Reports
Reconciling payroll reports helps ensure accuracy and detect potential errors:
- Compare payroll records with bank statements and general ledger entries.
- Verify tax payments and filings align with payroll reports.
- Identify any discrepancies that need correction before year-end.
- Evaluate Your Processes
Assess whether your current processes are meeting your business needs:
- Look for automation opportunities to reduce errors and improve efficiency.
- Consider integrating payroll with HR and time-tracking systems for better accuracy.
- Review internal controls, data security and who has access to your payroll information.
- Plan for Year-End Payroll Preparation
A proactive mid-year payroll review makes year-end processing easier:
- Identify areas for improvement before the busy fourth quarter.
- Address compliance issues now to avoid penalties later.
- Ensure all payroll records are organized for tax reporting and W-2/1099 distribution.
Conducting a mid-year payroll review is a smart way to keep your organization on track, ensure compliance, and optimize payroll operations. By taking the time to check and adjust key payroll components now, you can prevent costly mistakes and make year-end processing stress-free.
Need help streamlining your payroll review? Our payroll and HR solutions ensure accuracy, compliance, and efficiency. Contact us today to learn how we can support your business.
Payentry personnel management professionals provide expert support in payroll, workforce management, human resources, benefits administration, and retirement planning services.
For the latest updates, to view our webinars, and listen to our podcasts, visit and follow us on LinkedIn, Facebook, X, Instagram, YouTube and Spotify.
Learn more about how we can help you achieve your goals, address challenges, and resolve issues with speed and precision by conveniently scheduling an appointment with our team. And to speak directly with an experienced payroll professional, please contact us at 888.632.2940 or simply Click Here and Let’s Talk.
* MPAY LLC dba Payentry (Company), is not a law firm. This article is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other Company materials does not create an attorney-client relationship. The Company is not responsible for any inadvertent errors that may occur in the publishing process.
