Start with the pay-period facts

Before reviewing tax math, verify the basics: employer, pay-period start and end dates, pay date, employee roster, and work location. A mathematically correct calculation attached to the wrong period is still wrong.

Review earnings before deductions

  • ☐ Hours match approved time records.
  • ☐ Overtime is identified using the applicable workweek rules.
  • ☐ Salary or regular-rate assumptions are correct.
  • ☐ Bonuses, commissions, differentials, and other earnings are included once—not omitted or duplicated.
  • ☐ Reimbursements are distinguished from taxable compensation where appropriate.

If gross pay is wrong, every downstream percentage or withholding calculation can also be wrong. That is why earnings review comes first.

Review taxes and withholding

Check that the employee’s current withholding setup is being used and that the calculation method belongs to the correct tax year. Federal income-tax withholding methods are updated through IRS guidance such as Publication 15-T. State and local withholding may require separate current-year rules.

For Social Security and Medicare, confirm the wages being treated as subject to tax and the applicable employee/employer treatment. If a result looks unusual, trace it back to taxable wages rather than assuming the final tax line is the only place an error can occur.

Review deductions with extra care

Confirm each deduction is authorized and appears in the intended amount and period. Distinguish pre-tax, post-tax, court-ordered, and employer-side items. The FLSA can restrict deductions that cut into required minimum wage or overtime, and state law may add other limits.

Reconcile gross to net

The core arithmetic should be explainable: gross pay, minus employee taxes and deductions, plus any net additions, should reconcile to net pay. If it does not, do not “plug” the difference. Identify the line causing it.

Check year-to-date continuity

Compare the new year-to-date figures with the prior completed period. Earnings, taxes, and deductions should generally move forward by the current-period amounts unless a documented correction explains the difference. A backward or unexpectedly flat YTD value is a useful warning signal.

Review employer-level totals

After the employee-level review, step back. Compare total gross wages, total taxes, deductions, and net wages with the prior period. Ask whether staffing changes, bonuses, overtime, or corrections explain the movement. A large unexplained swing deserves review before finalization.

Use an exception mindset

  • Who was added or removed this period?
  • Who has the largest change in gross pay?
  • Which deduction changed?
  • Which employee has the highest overtime or bonus amount?
  • Do any negative, zero, or unusually large values appear?
  • Does every final statement agree with the employer register?

Quick FAQ

Does reviewing payroll prove it is legally correct?

No. A structured review can catch arithmetic, continuity, and input problems, but legal and tax compliance can depend on facts and jurisdiction-specific rules outside the calculation.

When should payroll be reviewed?

Before the final numbers are used for wage payment, tax deposits, filings, or employee statements. Post-payment review still matters, but corrections are usually easier before those downstream actions occur.

What if I find an error after finalizing?

Document what changed, determine which downstream records or filings were affected, correct the source and the appropriate later records, and use the required correction process for any filed tax or wage reports.

LeoFolio pathway

For small-employer payroll record preparation, LeoFolio U.S. Pay Run supports one employer and up to five employees per completed run, with reviewable calculations and a coordinated record package.

Source notes for editorial verification

Related LeoFolio resources
Payroll Review · U.S. Payroll · Calculation methodology
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