Pros and Cons of a Career in Payroll Administration
Payroll administrators collect and maintain confidential employee data, such as work hours, leave time, salaries and benefits accrued. However, handling payroll issues can be stressful. Read more below about the pros and cons of working as a payroll administrator.
| Pros of Being a Payroll Administrator |
|---|
| Can work in a variety of industries (banks, medical offices, government agencies, etc.)* |
| Strong job prospects (an effect of a large number of workers leaving the occupation)* |
| Postsecondary degree not usually required to enter the field* |
| Certification can increase opportunities in the field* |
| Position allows for a certain amount of independence in work** |
| Cons of Being a Payroll Administrator |
|---|
| Stress related to handling payments and financial information** |
| Some employers require 3-5 years of experience in addition to an associate's degree*** |
| Need to be able to anticipate and prevent problems before they arise** |
| Requires expertise in industry-specific software** |
Sources: *U.S. Bureau of Labor Statistics, **O*NET Online, ***American Payroll Association
Essential Career Info
Job Description
As a payroll administrator, you'll collect and maintain confidential employee data, such as work hours, leave time, salaries and benefits accrued. Duties include processing timesheets and paychecks on time and fixing any errors or discrepancies in these documents. While it was once common for payroll employees to distribute and collect timecards manually, it's increasingly more common to keep track of hours and pay using computer programs. Most payroll administrators use accounting and time-distribution software as well as spreadsheet and word processing software. Depending on the size of the company, you might process payroll for multiple company branches or for an exceptionally large number of employees.
Salary Info and Career Outlook
Payroll and timekeeping clerks earned a median annual wage of $39,700 as of May 2014, according to the U.S. Bureau of Labor Statistics (BLS). Among the top-paying industries for the profession were agents and managers for public figures, with a mean annual wage of about $69,300, and the postal service, which paid a mean salary of almost $56,760. Other high-paying industries included water transportation and specialized design services.
The BLS also reports that employment for all types of financial clerks was projected to increase at an average rate of 11% from 2012-2022. While many companies continue to need payroll services, increased automation of payroll records will restrict growth. Job prospects are strong due to the large number of payroll workers anticipated to leave the field.
What Are the Requirements?
You can generally obtain a payroll administration job with only a high school diploma. You might benefit from taking electives in high school that apply to the career, like math, business, computer science, finance or economics. After obtaining employment, you'll likely be trained on the job for up to a month, learning about company policies and payroll procedures; however, some employers might require you to have years of payroll experience and postsecondary education. Other qualifications to be a payroll administrator include:
- Strong computer skills
- Keen attention to detail
- A concern for others and willingness to work on a team
- Ability to prioritize problems and address them independently
- Strong mathematical abilities
What Employers Are Looking for
Employers need payroll administrators who can maintain confidentiality regarding employee records and who are computer-literate. Candidates who are knowledgeable in computer processing programs used by the company's human resources department will be highly valued, and previous experience is often given more weight than any particular educational background. Continue reading for a sampling of what employers on CareerBuilder.com were looking for in March 2012:
- A financial services company in New York advertised for a full-time payroll administrator to process employee information and payroll in multiple states. The posting doesn't specify required education or previous work experience, but applicants should be familiar with ADP software and have good interpersonal skills.
- A bank in Tennessee sought a payroll administrator with a high school diploma and at least five years of payroll and benefits experience. Candidates should be proficient in Paychex software.
- A security system company in North Carolina looked for a payroll and benefits administrator for their human resources department. Applicants must have 1-3 years of experience and an associate's degree, though a bachelor's degree is highly preferred.
- A real estate company in California advertised for a part-time payroll administrator to process payroll across multiple states and conduct orientation for new employees. Five years of relevant experience is necessary, and candidates who are bilingual in English and Spanish are encouraged to apply.
- An accounting firm located in Houston looked for a payroll clerk with at least two years of experience working with high-volume payroll and using ADP and Microsoft Excel. The advertisement did not specify a required education.
How Can I Stand Out?
Get Certified
One way to set yourself apart from the competition is to earn certification. The American Payroll Association (APA) even reports that its Certified Payroll Professional designation is preferred in this field. You'll need to have 3-5 years of payroll experience or an equivalent combination of training and experience to be eligible to sit for the certification exam. Alternatively, the APA offers the Fundamental Payroll Certification program to entry-level payroll professionals, which involves passage of a certification exam and the option to prepare through study or APA-administered courses.
Earn a Degree
While you can enter the career with a high school diploma, you might get an edge over the competition and open yourself up to a greater number of job opportunities with an associate's degree. In fact, the APA reports that some employers require a 2-year degree. Majors that apply to payroll administration include finance, accounting, business and economics, among others.
Alternative Fields
If working as a payroll administrator doesn't sound like the right career choice for you, maybe a related job might fit the bill. If you're interested in finance but want to work with more than just payroll, consider a career as an accountant. In this career, you'll examine financial records for accuracy and analyze fiscal information to determine ways to help your employer or client increase profits. You might specialize in a certain type of accounting, such as corporate accounting, government accounting or internal auditing. You'll likely need at least a bachelor's degree to enter this career, and you might need to become a Certified Public Accountant. According to the BLS, jobs were expected to grow 16% from 2010-2020, which is about the same as for payroll administrators; however, accountants earn considerably higher wages (a mean salary of about $70,000 as of 2011).
Another job that involves record-keeping and usually only requires a high school diploma is bill collecting. A background in customer service or with a call center could help you, since you'll be tracking down individuals or companies who owe money and requesting that they pay. According to the BLS, bill collectors earned a mean salary of about $34,000 as of 2011, but keep in mind that salaries often include commissions earned from debts collected, and your ability to persuade debtors might affect your salary. The BLS also notes that jobs were projected to grow by 14% from 2010-2020.
