Internal Payroll Audit Checklist

ItemAction to be takenSelect
Set-up prior to first payroll of the yearReview payroll calendar for payroll processing / pay day conflicts (statutory holidays etc.)
Weekly or bi-weekly pay frequency watch for 53/27 pay year
  • how will C/QPP exemption be handled
  • are any taxable benefits or deductions affected
Distribute new payroll cut-off schedule to HR, timekeepers, managers & supervisors and union if necessary
Carry forward balances
  • vacation accruals
  • banked overtime
  • unused sick days (if carry forward allowed)
  • outstanding loans payable
  • garnishment balances
Update TD1 basic annual exemption
Test first pay programming changes prior to live input
Remind employees to file new TD1 for additional tax credits
Remind commission employees to file new TD1X/TP-1015.R.13.1-V
Communicate new year C/QPP, EI and QPIP statutory deductions rates and maximums
Pre-Audit of PayrollCreate changes folder / files
Review changes and ensure changes have been authorized
Obtain authorized changes
Check previous audit reports i.e. total hours, earnings to compare
Establish cut-off times with Managers/Supervisors
Have payroll meeting with team (if needed)

Payroll Auditing/Processing

Processing the payrollUpload payroll changes/hours/pay file or manually key entries
Balance and Audit changes
Note: this process should be completed by another team member/Manager for segregation of duties
Update any manual or cancelled cheques to payroll (ensure taxes are updated correctly)
Run payroll test run or payroll preview reports to validate entries
Balance/audit new hire entries, employee changes report, earnings, hours, changes & benefit changes report
Ensure accurate social insurance numbers are entered
Review test reports or deductions not taken report to validate entries and check terminations report (specifically if terminated employees have hours)
Review deductions not taken report
Taxable BenefitsTaxable benefits reported each pay when received or as enjoyed
Process taxable benefit adjustments e.g. company car benefits
Jurisdictional ReportingEmployer health tax returns
Workers compensation annual reconciliation / return
Northwest Territories / Nunavut Payroll Tax return
RQ annual summary
  • Commission des normes du travail (CNT)
  • Workforce Skills Development and Recognition Fund (WSDRF)
  • Complete Formulaire Declaration des activites de formation (Quebec employers who pay WSDRF are required to complete)