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Payroll Manager Interview Questions

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  1. What are some of the differences between an employee and a contractor when it comes to payroll purposes? See answer
  2. As a manager, have you ever needed to deliver bad news to an employee, and how did you approach the situation? See answer
  3. The deadline for payroll processing is urgent, but there is an IT glitch that prevents you from accessing your cloud-based payroll system. How do you handle it? See answer
  4. What types of payroll systems are you familiar with?
  5. How do you manage your time so you complete all payroll activities by the required deadlines?
  6. How do you stay on top of tax changes related to payroll?
  7. Five employees have complained about errors in the recent payroll. How do you handle it?
  8. There is a gender pay gap in the marketing research department. You can ignore it or raise the issue with HR. What would you do? Explain your answer.
  9. Tell me about your system for organizing employee records.
  10. Efficient payroll managers usually have the right personality for the job. What are your personality traits that make you a competent payroll manager?
  11. A friend of yours asks you about the payroll information of a company employee without permission to do so. What would you do in this situation?
  12. How do you stay informed of the legislation, industry policies and company procedures that relate to your management of the payroll?
  13. You are required to develop a report with a forecast of the payroll expenses for next year. What software would you use to develop your report?
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6 Payroll Manager Interview Questions and Answers

Q:

Which types of payroll systems are you familiar with?

A:

This is a key question to ask because it shows you whether or not the payroll manager is familiar with the software that your organization uses. It also gives you insight into the candidate’s level of experience with different types of payroll systems. The applicant’s answer should also include information about the types of payroll systems, including on-premises and cloud-based solutions. What to look for in an answer:

  • Listing of payroll systems
  • Years of experience
  • Description of features they liked and didn’t like in the systems

Example:

“I used on-premises ADP Workforce for five years and supervised our company’s conversion to the Zenefits solution, which was a cloud-based product.”

Q:

What are some of the differences between an employee and a contractor when it comes to payroll purposes?

A:

The payroll manager’s answer to this question shows their understanding of the requirements for handling the taxes of an employee versus a contractor. It also demonstrates their knowledge about the status of each type and what rights each worker has under the law. This answer is important if your company ever uses contractors or if it may use them in the future. What to look for in an answer:

  • Clear definition of contractor versus employee
  • Understands how payroll taxes work for contractors
  • Familiar with payroll taxes applied to employees

Example:

“Contractors don’t have payroll taxes withheld since they’re 1099 employees. Instead, we would provide them with a W-2 by Jan. 31 of each calendar year.”

Q:

As a manager, have you ever needed to deliver bad news to an employee, and how did you approach the situation?

A:

This is a good question to ask because it shows the applicant’s ability to stay calm in a stressful situation with a lower-level employee. The ideal candidate will be able to deliver bad news in a neutral way to avoid escalating the issue. They’ll also be able to explain how they deal with the other person’s strong emotions when receiving such news. What to look for in an answer:

  • Willingness to deliver bad news
  • Ability to listen calmly and address concerns
  • Clear and concise written and oral communication skills

Example:

“At my previous job, I had to tell employees that there would be no raise for 12 months due to a 4 percent decline in our company revenue. I approached the conversation in a straightforward manner and made myself available to answer any questions they had.”

Q:

How do you manage your time so that you complete all payroll activities by the required deadlines?

A:

You should ask a potential hire this question because it shows you how organized they are in their work. A successful payroll manager should know what needs to be done and when. The ideal candidate will be able to clearly explain their methods or routines for processing workloads and verifying that all of the required activities have been completed on time. What to look for in an answer:

  • Description of their organizational system
  • Examples of tools, applications or systems they use for staying organized
  • Understanding of process for verifying work completion

Example:

“I use an automated reminder system to verify that each payroll action has been completed, and I process the payroll at least eight hours early.”

Q:

How do you stay on top of the tax changes related to payroll?

A:

You should ask this question because it shows that the applicant stays up to date on policies and laws that affect the payroll process. An ideal payroll manager reviews updates to laws at the local, state and national level as they relate to taxes, withholding and other types of payroll deductions. Their answer also demonstrates their ability to engage in professional development. What to look for in an answer:

  • Interest in learning the latest laws and regulations
  • Use of technology for staying updated on policy
  • Ability to implement changes in payroll processes

Example:

“I subscribe to the state’s revised code summaries and routinely read the bulletins for businesses that are issued quarterly by the IRS.”

Q:

The deadline for payroll processing is urgent, but there is an IT glitch that prevents you from accessing your cloud-based payroll system. How do you handle it?

A:

A payroll manager should be able to adapt to changes and meet deadlines. An employer can use this question to evaluate a candidate's flexibility, creativity, management and problem-solving skills. An ideal payroll manager candidate would demonstrate they can work proactively to manage technology issues by having backup systems.

A candidate's answer should emphasize:

  • Ability to handle setbacks and meet payroll targets
  • Creativity, problem-solving, flexibility and management skills
  • Viable preventative strategy to deal with IT issues

An example answer to this question could look like this:

Example:

"When using a cloud-based system, I recommend that my employer has both paper and digital backups of the employee list and due amounts as a preventative measure in the event of any technology malfunctions. In my previous job, I regularly updated both backups with up-to-date information two days before the processing date. In this scenario, I would use one of the backups to process the payroll manually at least nine hours before the deadline."

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