15 Skills and Traits a Payroll Administrator Needs

businessman doing payroll and using calculator in smartphone

Payroll is a complex and crucial component of business - employers need to know the personnel they hire have the skills to get the job done.

It is not just about paying employees on time. Creating a strong, high-performance payroll system is vital to a range of additional business needs - not least fulfilling tax obligations and avoiding costly compliance penalties. It’s the base on which businesses consolidate their reputations, attract new talent, and facilitate growth month-by-month, year-by-year. Weak systems result in pay errors - errors lead to unhappy employees, and, ultimately, unhappy customers and clients.

The abilities and skills of payroll administrators can make a huge difference to overall performance - capable, skilled staff inspire confidence, eliminate mistakes, and help boost productivity. Conversely, weaker links in the chain have complex effects on the wider infrastructure.

With that in mind, anyone considering a career in payroll should ask themselves the question: What skills and traits should I develop to handle the demands of the modern payroll environment...?

1. Knowledge of compliance

One of the paramount duties of payroll administrators is to ensure the service they deliver abides by a network of compliance requirements. Since it’s intricately connected to tax and legal regulation, understanding how to achieve and observe on-going compliance is an important skill. Requirements are different all over the world – you should be able to demonstrate a deep level of compliance knowledge for their locality.

2. Strong maths and numeracy skills

The role requires you to deal with numerical data and complex calculations frequently. So, a high level of numeracy and an aptitude for maths and accountancy are important traits for all payroll staff, who will need to deliver accurate net-pay to employees, make statutory deductions, and submit accurate tax reports to government revenue authorities like HMRC.

3. Possessing professional experience

Having the appropriate professional experience is extremely important. Previous professional roles will inform recruitment decisions - is a candidate who worked for a small or medium-sized business ready to transition to a larger organisation? Does the candidate appreciate the unique needs and challenges the employer organisation faces?

4. Problem-solving skills

The role frequently creates problems, such as miscalculations, tax irregularities and compliance issues. You should be prepared to deal with these problems quickly and efficiently - and anticipate potential challenges in the future. When dealing with the unique problems an organisation may face, creative thinking may be just as important as the ability to crunch numbers.

5. Communication skills and confidence

The complexities of payroll process can make it quite confusing to employees in other departments. You will have to interact with individuals at every level of organisations and explain what you are doing with clarity and confidence. When changes affect your system, administrators must be able to communicate how the rest of the company will be impacted.

6. Customer service and etiquette skills

You will face inquiries from clients seeking information about a range of pay-related topics - not least tax, social security and a range of peripheral deductions from their salaries. When dealing with those kinds of questions, administrators must be able to observe proper etiquette at all times and deliver an excellent standard of customer service.

7. Flexibility

The payroll process involves a lot of moving parts and, by necessity, an element of human unpredictability. You must be flexible enough to maintain a high standard of compliance, while also managing the changing professional and personal needs of clients. With deadlines looming, a payroll system may need to adapt quickly to deliver on time.

8. The ability to plan and prioritise

Each pay cycle will involve an extensive list of tasks, with a hierarchy of importance. Planning an approach to an array of pay and tax deadlines will be a significant part of your job. On a week-by-week, or month-by-month basis, administrators should be able to identify and address those tasks which need their immediate attention, without compromising the system they have developed.

9. Decision-making skills

You may be called upon to make decisions which affect a large number of people, or which have implications for the wider business infrastructure. In these situations, you must be able to apply a careful thought process to what may be a difficult situation, and act decisively in going through with their chosen course of action.

10. Responsibility and dependability

Payroll administrators take on significant responsibility as part of their role, not just to individual clients, but to their organisation as a whole. Whether serving a handful of close-knit small business employees, or thousands of personnel in an enterprise, you must be dependable enough to deliver accurately, on time, and within the parameters of a spectrum of legal compliance requirements.

11. Discretion

You will need to handle sensitive personal data. A data leak can be extremely damaging to a business - along with both its employees and clients. To ensure sensitive data is protected, you must understand the security and privacy protocols of an organisation - and the critical need for discretion.

12. Administrative skills and attention to detail

Prospective new members of a payroll team will need a range of administrative skills. Knowledge of general office duties, organisational ability and a high level of computer literacy are all extremely useful. Getting ‘small details’ - like record-keeping and data-handling - correct is an essential step towards reaching the high standard of payroll performance and compliance employers are looking for.

13. Proficiency with industry software

You should be familiar with a variety of software platforms. Beyond standard office software such as Microsoft Office and Excel, experience with dedicated payroll platforms, including Sage, Quickbooks and Xero is also useful. Software platforms are frequently updated by developers - administrators should be aware of the capabilities of the platform they are using and be able to identify weaknesses and areas for improvement.

14. Leadership skills

You may be required to take control of a team, work closely with another department or brief other members of the organisation, including board members and HR staff, on a variety of payroll matters. An ability to coordinate colleagues, clients and different departments is a vital part of a payroll administrator’s role.

15. Teamwork skills

While an essential trait in any modern business environment, the importance of payroll to the rest of an organisation makes your ability to work in a team especially important. You need to develop strong interpersonal skills, maintaining a professional demeanour, and understanding the pressures and priorities which may be affecting other team members.

No two systems are exactly the same and, while the skills above are certainly desirable in a payroll administrator, they do not represent a complete list.

As a prospective payroll professional seeking a career in the field, you should aim to cultivate a mixture of skills which distinguish you as an asset to individual organisations. Developing a thorough understanding of the situation an employer or client faces is as much a part of the process as the experience and expertise you, as an administrator, possess.

Have you ever thought of pursuing a career in this field? Has this article changed your mind for better or worse? Let us know in the comments section below…