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Payroll Clerk Interview Questions

Edited by Indeed Employer Content Team
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Indeed’s Employer Resource Library helps businesses grow and manage their workforce. With over 15,000 articles in 6 languages, we offer tactical advice, how-tos and best practices to help businesses hire and retain great employees.

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Whether you are preparing to interview a candidate or applying for a job, review our list of top Payroll Clerk interview questions and answers.

  1. What experience do you have with computerised payroll systems? See answer
  2. What are the main responsibilities of a payroll clerk? See answer
  3. How do you manage your time to ensure you meet deadlines for all of your payroll duties? See answer
  4. How do you keep up with changes in the Government of Canada and provincial tax laws? See answer
  5. Technology is changing the future of payroll administration. What are some of those changes and how will you use them? See answer
  6. How would you handle an employee upset because of a withholding error? See answer
  7. List some of the payroll record retention requirements of the Canada Revenue Agency. See answer
  8. What do you think is the best payroll schedule for part-time employees as compared to full-time employees? See answer
  9. Do you know how to set up a company payroll? See answer
  10. What deductions do you make from a gross payment before sending final wages to the employee?
  11. What’s your experience with card payments?
  12. What’s the most valuable skill for a payroll clerk?
  13. How would you handle a mistake on a co-worker’s year-end report?
  14. What’s the best way to avoid payroll errors?
  15. If you’re selected, what would be your priorities the first week, and how would you manage your time?
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Indeed’s Employer Resource Library helps businesses grow and manage their workforce. With over 15,000 articles in 6 languages, we offer tactical advice, how-tos and best practices to help businesses hire and retain great employees.

Read our editorial guidelines

15 Payroll Clerk Interview Questions and Answers

What experience do you have with computerised payroll systems?

Candidates require experience with computerised payroll systems or relevant software. This question evaluates the candidate's technological experience, qualifications, and skills. What to look for in an answer:

  • Experience with computerised payroll systems
  • Confidence with using technology
  • Names of payroll systems used

Example:

"I have eight years of payroll administration experience, including the use of several computerised payroll systems. I use OnPay in my current position, and I have experience with QuickBooks, Bamboo, and Deluxe Payroll. I also have experience implementing payroll services manually, which is helpful in the event of a tech failure."

What are the main responsibilities of a payroll clerk?

This question assesses a candidate's understanding of the role and their responsibilities. The answer should give you insight into their experience as a payroll clerk and familiarity with the position's duties. What to look for in an answer:

  • Experience with relevant payroll clerk duties
  • Research about the position and preparation for the interview
  • Understanding of duties and responsibilities of the role

Example:

"In my current position as a payroll clerk, I'm responsible for calculating financial processes according to government regulations, disbursing payroll, accurate input of data, and preparing monthly statements.Other responsibilities I expect to take on in this role includeT4 statements, preparation and balancing of period-end reports. Currently, I also reconcile, review, process, and validate employee records."

How do you manage your time to ensure you meet deadlines for all of your payroll duties?

Being organised, priority-driven, and practised in time management are essential qualities for payroll administrators. Asking this question allows you to assess those skills and their use of extra applications or tools they use. What to look for in an answer:

  • Strategy for verifying tasks are on schedule
  • Time management and organisational skills
  • Ability to prioritise tasks effectively

Example:

"To make sure I meet deadlines, I fill out a daily, weekly, and monthly task list in our payroll software app. It enables me to prioritise and organise my responsibilities, so I'm always on track for meeting deadlines. A part of this process includes corresponding reminders to check my progress."

How do you keep up with changes in the Government of Canada and provincial tax laws?

Payroll clerks must be aware of current and upcoming changes to federal and provincial tax codes. This question provides insight into the candidate's knowledge of resources and dedication to the job. What to look for in an answer:

  • Knowledge of resources to stay current with tax code changes
  • Collabouration with other stakeholders
  • Dedication to accuracy

Example:

"Payroll deduction tables are available online at Canada Payroll and I have electronic alerts sent to my computer to advise me of changes. I subscribe to news from Revenue Quebec, the Canadian HR Newswire, and the CPA organisation of Canada. I also collabourate with our software provider, HR department, and our finance department to share any news we receive."

What deductions do you make from gross payment before sending final wages to the employee?

Taxes and deductions vary based on several factors, including unique structures in every province and territory. Candidates need to know the standard set of deductions and how the local system works. What to look for in an answer:

  • Knowledge of Canada Revenue Agency income tax regulations
  • Standard deductions taken from employee's wages
  • Knowledge of relevant provincial or territorial income tax laws

Example:

"Payroll deducts CRA federal and provincial personal income taxes which are a percentage of a person's earned income. Other deductions include employment insurance, CPP, and income tax. Optional deductions are union dues and their individual employee pension plan if they're enroled in one."

Technology is changing the future of payroll administration. What are some of those changes and how will you use them?

Rapid advances in payroll technology present opportunities for your company to reduce cost, improve efficiency, and use data from payroll records. The candidate should display their technical and research abilities to stay up-to-date with useful technology and software. What to look for in an answer:

  • Experience with relevant software and technology
  • Knowledge of new technology
  • Ability to adapt to and embrace change

Example:

"New uses of technology include infrastructure-free cloud-based ERP (enterprise resource planning) making it easier to share data, work remotely, and stay current on tax codes. Cloud is the most significant change, but mobile payroll technology is also valuable for remote workers. Since the need for remote working options has increased so significantly, I can use this technology to make payroll more streamlined for those employees."

What's your experience with card payments?

Card payments are a method where an employee's wages are loaded onto a debit card. Since this option is growing in popularity, the candidate must be familiar with this method. What to look for in an answer:

  • Knowledge of the benefits and disadvantages of card payments
  • Experience with issuing card payments
  • Interest in learning more about the method to accommodate employees

Example:

"I've read some recent articles about the rise in popularity of card payments. I know they're typically used for employees who don't have bank accounts and can actually reduce the risk of fraud. I also know they have some cost-effective and time-saving benefits. From what I know, pay cards seem like a great option for seasonal and overseas workers. I haven't had experience issuing them myself, but I'd be happy to learn the process."

How would you handle an employee upset because of a withholding error?

The answer to this question should give you insight into a candidate's problem-solving capabilities, commitment to accuracy, and ability to prevent and correct mistakes. What to look for in an answer:

  • Interpersonal skills and empathy for employee concerns
  • Problem-solving skills and initiative
  • Ability to acknowledge and take responsibility for errors

Example:

"I'd actively listen to the employee's complaint, apologise, and reassure them I would resolve the issue immediately. First, I'd review our documents to verify the mistake. If there was indeed a mistake, I would immediately fix it and submit back payment for the extra withholding amount. I would then tell the employee that I resolved the error, and the amount would be visible in their account as soon as possible."

What are the most valuable skills for a payroll clerk?

A payroll clerk must possess many skills such as time management, attention to detail, and problem-solving abilities. This question assesses what the candidate values as important skills in their profession. What to look for in an answer:

  • Detail-oriented and meticulous
  • Analytical and numeracy skills
  • Confidence that they possess the relevant skills

Example:

"I think attention to detail and the ability to maintain accurate data are the most important skills. A minor mistake can cause significant problems that are time-consuming and costly to fix. I also think trustworthiness is a vital quality for a payroll clerk to possess, and I'm confident I can bring those attributes to your company."

List some of the payroll record retention requirements of the Canada Revenue Agency.

The Canada Revenue Agency requires every company to retain certain payroll records and a payroll clerk should be aware of such regulations. Asking this question gives you insight into the candidate's knowledge of the revenue agency. What to look for in an answer:

  • Knowledge of relevant compliance requirements
  • Understanding of various payroll documents
  • Knowledge of Canada Revenue Agency requirements

Example:

“The revenue agency's retention regulations require that we keep records of taxes withheld, hours worked, EI premiums, and Canada Pension Plan contributions for every employee. Other forms we need to retain include Form TD1, TP1015.3, Letters of Authority, and other registered pension data. In all previous positions I've had, we always used document management software to maintain compliance.”

How would you handle a mistake on a co-worker's year-end report?

Payroll clerks help verify each other's work. Finding an error in someone else's work requires attention to detail and communication skills. The answer to this question should exhibit the candidate's interpersonal skills and professionalism. What to look for in an answer:

  • Attention to detail
  • Excellent communication and interpersonal skills
  • Ability to work as a team player

Example:

"In this situation, I'd politely tell my co-worker of the mistake and offer any help or explanation needed to point out how to fix it. There'd be no need to go to the supervisor unless it was a repetitive mistake. The job requires teamwork and helping each other recognise details so we can achieve a common goal."

What's the best way to avoid payroll errors?

Part of a payroll clerk's ability to prevent mistakes involves following a process. The answer to this question should point out the candidate's knowledge of avoiding payroll errors and the strategies they use. What to look for in an answer:

  • Proven strategies to avoid mistakes
  • Detail-oriented and meticulous
  • Understanding of the importance of accuracy

Example:

"Payroll mistakes have the potential to become costly to fix, but I avoid them with a step-by-step process. I ensure all employees' details are correct and double-check my data entry. I always cross-reference leave dates and confirm my calculations for holidays accrued. Implementing a review of the reporting process helps me avoid mistakes."

What do you think is the best payroll schedule for part-time employees as compared to full-time employees?

Payroll clerks process payroll for all company employees regardless of status and should be knowledgeable of the difference between salaried and hourly pay structures. This question should help you learn more about the candidate's experience in payroll calculations. What to look for in an answer:

  • Understanding of benefits and disadvantages to various pay structures
  • Ability to manage payroll schedules for employees on different employment terms
  • Previous experience with various payroll schedules

Example:

"At my current position, we have both full-time and part-time employees. We pay full-time employees on a bi-monthly basis, which divides their earnings into two separate payments. One benefit is that it gives payroll more time and the opportunity to check for accurate calculations. We pay part-time employees weekly, which is the best option because they often work inconsistent schedules."

Do you know how to set up a company payroll?

Certain steps must be followed to set up a payroll account with the Canada Revenue agency. This question tests the candidate's knowledge of the various elements of a payroll account. What to look for in an answer:

  • Knowledge of payroll processing
  • Experience creating a payroll account
  • Mention of specific required information to open a payroll account

Example:

“Yes. The company must first register with various government agencies to get started with payroll. First, the company needs t a business number. In some provinces, they must register for employer health tax remittance and various workplace safety and insurance boards. After they complete all provincial administrative requirements, they determine the payroll frequency and set up payroll processing. Employee information, required deductions, and taxable benefits are all entered into the payroll system.

If you're selected, what would be your priorities the first week, and how would you manage your time?

The candidate's answer should give you insight into their work ethic, procedures, and how they transition to a new job. This question also offers another chance to discuss job-related responsibilities and tasks. What to look for in an answer:

  • Enthusiasm for the role and a strong work ethic
  • Initiative to learn company-specific processes
  • organisation and time management skills

Example:

"During my first week, I would focus on learning your procedures and software apps. I'd also familiarise myself with payment schedules and the process or guidelines for reviewing payroll accuracy."

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