Payroll Checkup: Is your process healthy?

As we cross into the latter half of 2025, payroll professionals experience an ideal opportunity to pause and evaluate their systems. Much like an annual health exam, a mid-year payroll checkup ensures that processes remain compliant, efficient, and aligned with organizational goals. 

Payroll errors or inefficiencies can impact employee morale, organizational reputation, and compliance with federal and state regulations. According to the American Payroll Association (APA), even minor mistakes can result in costly penalties or strained employee trust (APA, 2024). To help keep payroll operations on track, here are five key areas to review: 

1. Compliance and Legislative Changes

Payroll professionals understand that regulations are rarely static. New pay transparency laws continue to expand across the U.S., impacting recruitment, job postings, and compensation strategies (Nguyen, 2025; Ibarra, 2023). At mid-year, it is wise to: 

• Review federal, state, and local compliance updates. 

• Ensure systems are tracking new reporting requirements. 

• Confirm that tax tables, wage limits, and benefit thresholds are up to date. 

By staying proactive, payroll professionals can reduce the risk of penalties while strengthening trust with employees. 

2. Accuracy and Error Reduction

Payroll errors can be costly, both financially and culturally. The IRS estimates that nearly one-third of employers make payroll mistakes annually, often leading to fines (IRS, 2024). Conducting a mid-year audit can help identify discrepancies before they snowball into year-end issues. 

Consider: 

• Reconciling year-to-date totals. 

• Reviewing employee classifications (W-2 vs. 1099). 

• Auditing time and attendance records for accuracy. 

Taking these steps reduces the likelihood of compliance fines and strengthens confidence in payroll’s role as a cornerstone of employee trust. 

3. Technology and System Optimization

The payroll technology landscape is advancing quickly. HR and payroll platforms are increasingly offering automation, AI-driven insights, and self-service portals that streamline processes and reduce manual workloads (SHRM, 2024). 

Mid-year is the perfect time to ask: 

• Is your system meeting organizational needs? 

• Are employees utilizing self-service features? 

• Are manual tasks slowing down payroll delivery? 

Organizations that embrace payroll technology often see significant improvements in efficiency and accuracy. 

4. Employee Experience and Transparency

Pay is personal. Beyond compliance, payroll professionals play a critical role in shaping employee trust. Research from ZipRecruiter indicates that pay transparency not only enhances trust but also attracts top talent, with postings that include pay details receiving 50% more applications (Nguyen, 2025). 

Evaluate whether your payroll team is: 

• Providing clear pay stubs and breakdowns. 

• Educating employees on total rewards, not just base pay. 

• Supporting transparency in recruitment and retention. 

By positioning payroll as part of a transparent and employee-first culture, organizations can better retain and engage their workforce. 

5. Strategic Alignment with Business Goals

Payroll is not just a back-office function. It directly influences cash flow, workforce planning, and talent strategies. Conducting a mid-year review can help: 

• Align payroll with annual budgeting and forecasting. 

• Ensure overtime and scheduling policies support business objectives. 

• Provide leadership with accurate data to guide decisions. 

Payroll professionals who embrace this strategic lens elevate their role as business partners, not just processors. 

A Healthier Payroll for the Rest of the Year 

A mid-year payroll checkup isn’t just about compliance; it’s about building trust, leveraging technology, and ensuring payroll supports your company’s long-term strategy. 

At Willory, we specialize in payroll consulting, optimization, and staffing, helping organizations of all sizes strengthen their processes and elevate payroll as a strategic function 

Reach out to Willory to continue the conversation and explore payroll strategies tailored to your needs. 

References 

Bennett/Porter. (2024, October). 7 tips to ensure accurate payroll. Retrieved from https://benpor.com/7-tips-to-ensure-accurate-payroll/ Bennett/Porter 

Inova Payroll. (2025, March). Mid-year payroll checklist: Spring tasks & compliance tips. Retrieved from https://inovapayroll.com/payroll/mid-year-payroll-checklist-spring-tasks-compliance-tips/ Inova 

Lift HCM. (2025, February 12). Business guide to payroll audits: Compliance, checklists & best practices. Retrieved from https://lifthcm.com/article/payroll-audit-guide Lift HCM 

DianaHR. (2025, March). Payroll audits: What every employer should know. Retrieved from https://www.getdianahr.com/blog/payroll-audits-made-easy-what-even-is-a-payroll-audit getdianahr.com 

Workforce PayHub. (2024, January 15). Guidelines for effective payroll audit preparation. Retrieved from https://www.workforcepayhub.com/blog/effective-payroll-audit-preparation-guide workforcepayhub.com 

RSM US. (2024, April 26). Is your payroll process accurate, secure and compliant? Retrieved from https://rsmus.com/insights/services/business-strategy-operations/is-your-payroll-process-accurate-secure-and-compliant.html