Comprehensive guide to payroll reports: types, how-to & best practices

80% of payroll leaders and businesses are unable to use reporting for informed decision-making.* Let’s talk about why that’s a problem.

Payroll can feel like a necessary evil — one of those tasks that always comes around too quickly, further complicated by ever-changing labor laws and workforce dynamics. But efficient payroll management isn’t just an operational checkbox; it can reduce administrative costs, foster employee satisfaction, and drive better decision-making.

Yet, without incorporating robust reporting into your payroll strategy, you’ll have no way of knowing where you stand. You can’t manage what you don’t measure, and as retention and cost management remain top priorities for HR leaders, payroll reporting has become a boardroom-level concern.

Whether you’re new to payroll reports or looking to optimize your approach, this guide will help. Read on to learn about the most common types of payroll reports, how to create them, and best practices for efficient reporting.

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*Everest Group, 2024
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What is a payroll report?

A payroll report is a document that summarizes payroll data from a specific period. HR and accounting professionals use these reports to track salary payments, tax contributions and withholdings, and other payroll-related details.

Payroll reports serve both internal and external purposes:

• Internal uses — Helping People and finance teams identify internal payroll trends, forecast budgets, track labor costs, and ensure timely, accurate payments. 

• External uses — Providing documentation to prove compliance with tax and employment laws. 

There are multiple types of payroll reports; generally speaking, these documents provide valuable insights into key payroll metrics, such as:

• Employee gross pay — Total earnings before deductions, including base pay, overtime, and bonuses.
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• Employee net pay — Take-home pay after all deductions, such as taxes, benefits, and other withholdings.
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• Tax withholdings and employer contributions — Federal, state, and local tax withholdings, as well as employer contributions to social security, healthcare, or retirement plans.
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• Paid time off (PTO) balances — Accrued and used PTO for each employee.
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• Timesheets, including overtime — Recorded work hours, overtime, and any adjustments like unpaid leave or late arrivals.
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• Payroll processing time — The total time required to calculate, process, and distribute payroll.

Most countries require employers to generate payroll reports to meet different tax, labor, and compliance regulations. However, these requirements vary internationally, so be sure to check with the relevant authorities to understand your reporting responsibilities. 

💭 We recommend consulting a tax professional in your area to ensure you’re ticking all the boxes when it comes to payroll reporting.

5 common types of payroll reports

There’s more than one type of payroll report. Here are five of the most common that businesses may need to produce to stay on top of their payroll management obligations.
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1. Company payroll reports

Generated at the end of each payroll cycle, these reports provide an overview of payroll expenses, including salaries, taxes, and other deductions. They’re vital for tracking labor costs, forecasting budgets, and maintaining accurate records.
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2. Employee payroll reports 

Often called payslips or earnings reports, these documents provide employees with detailed breakdowns of their wages, taxes, and other deductions for the relevant pay period. These reports are distributed as either physical copies, emails, or through self-service portals.

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3. Tax liability reports

Tax liability reports summarize the taxes your organization owes and must pay to federal, state, or local authorities. Examples include:

• United States — Form W-2, Form 941 (quarterly federal tax returns)
• Canada — T-4 slips for employee earnings and deductions
• United Kingdom — Full Payment Submission (FPS) reports for employee pay and National Insurance contributions
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4. Time-tracking reports

If your employees fill out timesheets, you should be producing time-tracking reports. Depending on whether your organization operates with salaried or hourly workers, time tracking may mean:

• Team members track how much time they spend on different work-related tasks and activities 
• Team members track the exact hours they work

Many HR leaders use software with time-tracking features (like Leapsome’s HRIS!) to make it easier for people to log their hours and ensure payroll accuracy. 

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5. Certified payroll reports

This type of report applies to government contractors and subcontractors, particularly in the construction industry, and is enforced in several countries, including the United States.

In the US, certified payroll reports are required for federally funded projects under the Davis-Bacon and Related Acts (DBRA). Employers must submit Form WH-347s to government agencies weekly to confirm compliance with prevailing wage laws and other labor regulations.

Other countries, such as Canada and Australia, have similar requirements for government-funded projects, although the term “certified payroll reports” may not be explicitly used. For instance, Canadian provinces have specific reporting standards for public works, and Australia enforces payroll documentation for state-level projects.

*While the UK doesn’t mandate certified payroll reports, the Construction Industry Scheme (CIS) requires contractors to report subcontractor payments and tax deductions — a comparable compliance mechanism.
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How to create a payroll report

Most businesses outsource some aspect of payroll, but understanding how payroll reports work is invaluable for HR professionals. It enables you to manage in-house tasks effectively, collaborate seamlessly with external partners, and ensure compliance with labor and tax regulations. 

Whether you handle payroll in-house or rely on service providers, having a clear grasp of payroll reporting gives you greater control, clarity, and confidence in your organization’s payroll strategy.

Guidance for creating payroll reports varies across locations and industries, so check the reporting requirements that apply to your business. The good news? Generating payroll reports isn’t as complicated as it seems — provided you can access the right data and tools.

Payroll professionals typically choose between manual spreadsheet reporting or payroll software automation. Let’s explore both options.
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Manual reporting with spreadsheets and templates

For years, payroll professionals have relied on spreadsheets and templates to generate payroll reports. This traditional method allows HR and finance teams to calculate, track, and record payroll data manually or with basic accounting software.

Manual payroll checklists tend to include the following steps:

• Collecting/Validating data (such as employee information, tax codes, and contract details)
• Calculating gross pay for hourly and salaried employees
• Determining employee and employer payroll taxes, benefits contributions, and other deductions
• Calculating net pay after deductions
• Recording tax contributions and other employer costs
• Entering payroll data into spreadsheet fields
• Keeping reports for the required length of time
• Submitting summaries to the relevant authorities

While some businesses prefer this method due to straightforward payroll needs, limited budgets, or a lack of software expertise, manual data entry is prone to human error. Mistakes can lead to legal issues, compliance fines, and wasted time — underscoring the need for a more efficient alternative.
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Managing payroll with HR software

Modern HR software can help streamline various aspects of payroll management. Here’s how Leapsome can support your payroll processes:

• Maintaining accurate employee data that’s relevant for payroll
• Organizing and storing payroll-related documentation securely
• Tracking time and attendance
• Providing a centralized system for HR data management
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Key payroll reporting best practices

Ready to level up your payroll reporting? Follow these best practices to ensure a seamless and effective process:

• Consider payroll reporting frequency — Research local and national laws to determine your minimum reporting obligations. Then, make a reporting schedule that ensures you produce enough payroll reports to gain an up-to-date view of your expenses without creating unnecessary work. Typically, businesses run different payroll reports at various intervals (e.g., weekly, biweekly, semi-monthly, monthly, quarterly, and annually). 

💡 Top tip: Don’t forget to account for anomalies like off-cycle payroll in your reports. These irregular payments can skew your payroll insights if you don’t keep track of them, so ensure you have a process to ensure your payroll data is representative.

• Measure the right payroll metrics — Identify your current payroll system’s strengths and weaknesses, then prioritize metrics that align with your goals. For example, track payroll error rates to evaluate new software or monitor payroll processing times to improve efficiency.

• Focus on data accuracy — Maintain up-to-date employee records, including timesheets, tax information, leave balances, and payroll data. Inaccurate records can lead to compliance violations, payment errors, and dissatisfied employees. 

• Leverage payroll software — Introduce technology to help streamline your HR processes and data management. Leapsome helps you maintain organized employee records and centralize HR documentation in one secure location. This makes it easier to access the information you need when working with your payroll system.
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Cut the stress out of creating payroll reports

Don’t let payroll get you down. With the right software and approach, you can generate payroll reports that help you fulfill your legal requirements and enhance your People operations. 

Businesses using payroll software often experience significant improvements in accuracy and forecasting. However, integration challenges can hinder adoption. That’s why it’s crucial to choose software that syncs seamlessly with your current HR tools and workflows.

That’s where we come in. Leapsome helps you organize and streamline the data management aspects of your payroll processes. Our platform enables you to maintain accurate employee records and time tracking data that support your payroll operations. When you combine these features with our other tools like Reviews, Goals, Surveys, Learning, and Compensation, you’ll have a comprehensive system that helps you manage your core HR processes and build a more engaging workplace.

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Disclaimer: This article is for informational purposes only and doesn’t offer legal, tax, or financial advice. While we’ve done our best to ensure accuracy and completeness, we can’t guarantee everything is up-to-date or error-free. For tailored advice, we recommend consulting a qualified lawyer or tax advisor.