Payroll Systems and Technology Flashcards

An employee self-service (ESS) portal most directly reduces payroll department workload by:

Answer: Allowing employees to update personal data and view pay stubs independently

ESS portals allow employees to update their own contact information, direct deposit details, W-4 elections, and access pay stubs, reducing calls and manual updates handled by payroll staff.

What is 'straight-through processing' (STP) in the context of payroll systems?

Answer: Automated end-to-end payroll processing with no manual intervention

Straight-through processing (STP) refers to fully automated payroll processing from data input to payment disbursement without requiring manual steps or human intervention.

A payroll manager discovers that the system calculated Social Security tax incorrectly for high earners mid-year. What is the FIRST corrective step?

Answer: Identify which employees were affected and by how much

Before any corrective action, the payroll manager must first identify which employees were affected and quantify the error amount to scope the required corrections.

Which payroll system feature ensures that an employee's direct deposit cannot be changed without a secondary approval?

Answer: Dual approval workflow / segregation of duties control

A dual approval workflow enforces segregation of duties by requiring a second authorized user to approve sensitive changes like direct deposit routing number updates, preventing fraud.

In payroll system terminology, what is an 'interface' between payroll and the general ledger (GL)?

Answer: An automated data transfer that posts payroll journal entries to the accounting system

A payroll-to-GL interface is an automated feed that transfers payroll journal entries (wages, taxes, deductions) from the payroll system to the accounting/general ledger system.

What does 'scalability' mean when evaluating a payroll system for a rapidly growing company?

Answer: The system's ability to handle increasing employee counts and transaction volumes without performance degradation

Scalability refers to a payroll system's capacity to accommodate growth in employees, pay groups, and transaction volumes without slowing down or requiring a system replacement.

Which regulation requires payroll systems handling electronic health benefit deductions to maintain specific data privacy safeguards?

Answer: HIPAA

HIPAA (Health Insurance Portability and Accountability Act) requires that payroll and HR systems protecting health-related benefit information maintain specific privacy and security safeguards.