A large part of the interview consists of the questions that your future employer has for you. Although very few HR managers try to unsettle you, you should prepare yourself well for possible questions to be able to give confident answers. In our article, you will find potential questions and exemplary answers on how to deal with them correctly. So you are well prepared for a successful job interview. There are the top 30 payroll management questions with answers.
1. What Is Payroll?
Payroll is the documentation of the salary that is delivered to the worker through an individual receipt and proof of payment. The salary receipt conforms to the model approved by the Ministry of Employment and Social Security. By agreement between the company and the workers’ representatives, another model can be established that clearly and separately contains the different perceptions of the worker, as well as the deductions.
The payroll, therefore, is based on an official or agreed model (as long as it contains a few mandatory minimum concepts) and reflects the remuneration, that is, the salary that the worker receives monthly in exchange for the services they are providing for the company. It includes salary, bonuses and deductions. With the delivery of the payroll, the company justifies having paid the remuneration to its employees, and the workers can know all the information about their salary and the withholdings that both they and the company must contribute.
2. What Is Payroll Management?
Payroll management g is a sub-area of operational accounting and is responsible for recording, billing, and posting wages and salaries. So it is about the processing of wages and salaries in a company. This also includes statutory and voluntary deductions from wages and salaries. Payroll management is mandatory for most companies because the obligation to pay wage tax is automatically linked to the obligation to keep payroll.
3. What Is The Purpose Of Payroll Management?
The purpose of payroll management is to calculate the wage or salary entitlement of every employee for a certain period, in gross and net terms. Payroll managers prepare the wage or salary costs and the associated social security expenses for further processing in the company accounting.
4. How Do The Company Deliver Employees’ Payroll?
The payroll must be delivered to the worker, signed by them and by the employer, and the amounts must be paid, as a general rule, by bank transfer. With this procedure, the company can justify that it has paid the salary, and has proof of payment from the bank. Workers can also download the payroll from the intranet or via email, in this case, without having to sign it. In addition, the employer must keep the supporting receipts for the payment of wages and the contribution documents.
5. What Kind Of Data Does Payroll Management Need?
For payroll management to carry out its work without problems, the payroll managers need documents for the accounting of wages and salaries, including bonus wages. These include timesheets, time cards, payroll lists, and, above all, employment contracts. Only on this basis can the wage times recorded be evaluated and calculated using the applicable wage rates (also called wage types). The gross wage for a specific performance and accounting period is then calculated for each employee from the evaluated wage times and the services rendered. In digitized payroll accounting, employees each have their digital payroll account – a personalized data record.
6. List The Most Important Tasks Of Payroll Management
These are the tasks of payroll management:
- Preparation, implementation, and follow-up of payroll accounting
- Preparation and supervision of wage tax and social security audits
- Management of reporting and certification
- Creation of standard reports, personnel statistics, and their evaluations
- Contact person for social security and wage tax issues
- Master data maintenance
- Contact person for employees, health insurance companies, and authorities
- If necessary, preparation of employment contracts, references, notices of termination, etc.
- Creation and posting of job advertisements
- Supervision and processing of the company pension scheme
- Clarification of salary accounts with accounting
7. What Are Payroll Accounts And Payroll Lists?
Payroll management must keep a payroll account for each employee. The details of the individual wage accounts are in turn collected in wage lists for a wage period. Wages and salaries are compiled based on the wage lists. In addition to the master data of the employee, the individual wage accounts also contain their tax characteristics such as the wage tax class and any allowances. Besides that, the lists can have information on the day of payment of wages, the period of wage payment, and the individual components of wages.
8. How Do You Maintain Personnel Master Data?
The personnel master data of each employee is created as a wage account data record and maintained by payroll management. This includes, for example, surname and first name, date of birth, and address data. You can obtain the social security number directly from the employee concerned.
A new salary account must be opened for every newcomer to the company and the data reported to the social security agencies. You can obtain all mandatory data from the central database of the Federal Central Tax Office.
9. What Are The Legal Reporting Obligations For Payroll Management?
Payroll management must register new employees when they join and deregister those who leave. These registrations and deregistrations, like other reports during the period of employment, are required by law. These include, among other things, the reports for statutory unemployment insurance, health insurance, care insurance, accident insurance, and pension insurance. In addition, payroll management also takes care of the wage tax registration. This ensures that employees automatically receive the net value of their remuneration.
The reporting of the calculated contributions of the employee for the social insurance carrier as well as any continued payment of wages that have become due in the event of illness are also among the tasks of payroll management.
10. Explain The Difference Between Wages And Salaries
Even if wages and salaries represent the money that ends up in the employee’s account, there is a crucial difference between wages and salaries. Although wages and salaries are often used interchangeably, they are different forms of remuneration that the employer pays for the work performed by the employee. Salary refers to fixed remuneration, a kind of basic salary that is the same every month. Regardless of whether the employee was on vacation for ten days in a month or not. Regardless of whether the month has 28 or 31 days. Regardless of whether the employee has done something in every hour of their working time. The wages, on the other hand, are calculated from the work actually performed – and can therefore vary from month to month. Wages can be calculated by the hour, piecework, or a number of pieces, and supplements for night or weekend work can be added. The result: fluctuating earnings. Anyone who works on an hourly rate basis does not receive any wages during their vacation.
11. What Deductions Apply To Payroll?
Once the gross salary has been calculated (sum of salary and non-salary payments), deductions must be subtracted, which are the worker’s contributions to Social Security contributions and Personal Income Tax withholdings. Among the deductions that apply are Social Security contributions, personal income tax, advance, the value of products received in kind and other deductions, for example, union dues or loan repayments.
12. List And Explain The Main Social Security Contributions
The main social security contributions are:
- Contribution for common contingencies: These are the contributions that are intended to cover situations of temporary or permanent disability derived from common illness, maternity, paternity, retirement, and non-occupational accident.
- Unemployment: It is the collection that is destined for unemployment coverage, that is, the benefits and subsidies of unemployed workers.
- Vocational Training: Intended for the training and recycling of workers.
- Salary Guarantee Fund: It is a collection intended to guarantee part of the salaries and compensation in case of insolvency or bankruptcy of the company. It is the exclusive responsibility of the company.
- Contribution to accidents at work and professional illnesses. The percentage depends on the contribution tables for each activity, the effective occupation of the worker, or the business activity.
13. What Is A Situation Of Temporary Disability?
The employee is in a situation of temporary disability if:
- An illness or accident prevents them from going to work.
- They receive health care from Social Security, through the Public Health Service.
- They receive an economic benefit or daily subsidy that covers the loss of income.
- Temporary disability can be due to common contingencies; that is, to a common illness or non-occupational accident, and health care is carried out by the National Health Service. It can also be due to professional contingencies, due as an accident at work or professional illness.
14. What Are The Different Types Of Permanent Disability Pensions?
Permanent disability pensions can be of different types, depending on the severity of the case:
- Partial: It is the lowest grade. It gives the right to a benefit, but the worker can continue in their job.
- Total: Entitlement to the benefit is generated, but the person cannot continue carrying out their usual work.
- Absolute: It is a benefit that protects, from not being able to exercise, with a minimum of efficiency, any type of profession or trade.
- Major disability: It is linked to absolute disability, but with a supplement so that the holder can hire help for basic tasks such as cleaning, dressing, eating, etc.
- Death pension: These contributory pensions include benefits for widows, orphans, and family members. Those in the family of the deceased person who has lived with them and who have also depended economically on their income will have access to the latter.
15. What Is Collective Agreement And What Does It Regulate?
The collective agreement has the rank of the norm and is one of the sources of the employment relationship. All this means that the collective agreement regulates the rights and obligations of the employment relationship between the worker and the employer, and what is established by the parties is mandatory for both. Through collective agreements, workers and employers can regulate:
- Working conditions and productivity
- Labour peace through the obligations that are agreed upon,
- Matters of an economic nature (salary, indirect remuneration, etc.), labor (working hours, breaks, professional classification, duration of contracts), union (works committees, staff delegates) and employment conditions,
- The relations of workers and their representative organizations with the employer and business associations, including procedures to resolve discrepancies in consultation periods,
- The constitution of joint prevention services and determination of the means, personal and material of the own prevention services,
- Rights to the promotion and professional training at work; professional promotion measures and sanctions for workers for non-compliance in the exercise of their work activity.
- In the negotiation of agreements, there is a duty to negotiate measures for promoting equal treatment and opportunities between women and men in the workplace and equality plans.
16. What Is Necessary For The Payroll Management Process To Work?
Like most HR departments, payroll management communicates all payroll-related information to the stakeholders in the correct form on key date x. What sounds trivial is quite complex. Before each monthly payroll round, you collect a lot of different data. Quite often this happens in Excel or in different places, which a) can lead to errors and b) depends on the single person familiar with the information. If it is not there or fails, no one knows what the status is.
17. What Is The Secret Behind Successful Payroll Management?
Two quality criteria are crucial: completeness and correctness of the information. In addition: A lot of different information flows in – from personnel and salary data to periods of absence. Along the process many problems can occur: too much information, changes are lost, and documentation is missing… All of this data must be up-to-date.
18. What Kind Of Payroll Management Tool Would You Recommend?
If you already are using HR solutions, for example for applicant management or absences, I would integrate payroll management into the same tool. When all employee information is in one place, you can save money by paying for one tool instead of multiple tools. The company also saves money because it does not have to constantly switch between multiple systems. Information flows once into the platform and is used there in different applications, such as in payroll accounting. This is easier to handle, which again reduces costs. Employees have to be trained once and not constantly learn to understand new technologies. The switching costs should also be manageable. Because the information is available digitally from other tools, so you can easily transfer it.
19. What Are Some Company Audits In The Payroll Management Area?
Payroll management is not immune to tax audits. In terms of payroll management and the payment of contributions, four different types of tax audits can come up to founders:
- Social security check: Have social security contributions been properly paid? Have all reporting requirements been taken into account?
- Wage tax and wage audit: this checks whether employers have correctly withheld the wage tax of their employees and paid it to the tax office.
- Accident insurance company audit: The pension insurance company checks whether the accident insurance registration for all employees has been carried out correctly and the contributions have been paid.
- Special sales tax audit: If employees receive monetary benefits or benefits in kind, certain special features apply to sales tax due to allowances and exemption limits. This test checks whether this is done properly.
20. What Are The Consequences Of Incorrect Payroll Management?
If errors occur in the payroll management, this leads to various consequences: For example, incorrect payments to the employee can occur as a result of calculation errors. Errors of this type have to be corrected within three months, which involves a certain amount of effort. If the payments do not make it to the tax office on time, in the worst case there is a risk of fines or imprisonment if this happens three times in a row. If errors are discovered during tax audits, this means that amounts have to be estimated, which in turn leads to significantly increased taxes and fines.
21. What Are The Great Challenges That You Consider The Payroll Management Profession Is Facing Today?
The recent changes in the new tax code are a great challenge for our profession since we must constantly adjust the presentation of the information that we provide to our authorities and in all business-related aspects. Tax regulations are closely related to our profession, and in a technological age, the challenge is twofold since we must be up-to-date with computer systems that speed up our operations and that the changes due to the new tax provisions are reflected quickly. In addition, technology offers a whole range of computerized payroll accounting systems that seem to make the work of payroll management less essential, but quite the contrary.
22. How Do You Make Sure You Do Not Forget Any Details So That Your Payroll Records Are Accurate When You Present Your Statements?
Next to my computer monitor, I have post-it notes on which I write down every last detail to ensure the accuracy of my work, which I discard as I complete what I write down on each one of them. I also use the calendar of my email to write down the task in the form of an appointment. This way, I can predetermine which date and time I must carry out the task, even to the point of leaving an email that I must send with some important matter, so I do not have detail left without having to evacuate it in one way or another.
23. What Are Your Strengths?
First of all, I have excellent personal skills – I am adaptive to changes and innovation, I have strong analytical thinking, take initiative and have a high-stress tolerance. Next, I possess task skills, like organization and planning, attention to detail, standards, and quality, and orientation on results. Then, there are my social competencies: teamwork, effective communication, social skills, customer orientation, and negotiation. Lastly, there are my management skills, like decision making, people, and time management.
24. Why Do You Want To Change Jobs?
I am comfortable in my current position. However, I would like to evolve and face new challenges to grow professionally, and in my company, due to the type of organization, it is not possible. That is why I am interested in being part of your team.
25. In Your Previous Jobs, Have You Supervised Other People?
Yes, my professional experience and academic training have allowed me to be in charge of important projects in which I have supervised the work of other people. I ensured their integration in each task, and extracted the maximum benefit from the team, creating a balance for the team. I involved each one so that they feel motivated and want to improve themselves.
26. What Did You Like Best About Your Last Boss?
My previous boss worked well and knew how to manage his collaborators. His policy was always to have the door open for us, to encourage two-way communication: downwards but also upwards. He created a work environment congenial to improving performance and constantly strived to lend a hand to his collaborators. He cared about our professional growth and always tried to put us in a position to do our best. He knew our strengths and tried to use them in the best of ways, making us group with people who can bring out our qualities. All his collaborators, without exception, admired him. One day I would like to become a manager like him.
27. How Do You Perform If Your Work Is Subject To Deadlines?
I have no difficulty managing tight deadlines because I work well under stress. My way of working, however, is to weigh the workload to improve the organization of my activities and peacefully manage them. I do not do things only in the deadline phase. My goal is to do things well and, possibly, finish ahead of the deadline to have time to make sure that I have worked well.
28. What Is Your Biggest Weakness?
I tend to have high expectations regarding processes and when they do not happen as expected, I get frustrated. However, I am working on improving. It has helped me a lot to work on flexibility, imagine different possible scenarios and incorporate creative activities into my daily routine.
29. Do You Like To Work Alone Or In A Team?
I feel comfortable working in a team, as it can be very beneficial. But I also like to have concentration spaces in which I can advance tasks more individually. I think it is healthy to know how to balance both situations.
30. Why Do You Think You Are The Right Person For The Position?
I believe that in addition to meeting the knowledge and skills needed for this job, I have developed a series of soft skills that allow me to be flexible, communicate assertively and work as a team. I also have the technical experience needed for taking the position of payroll management. Moreover, I am highly motivated to contribute to your company.
Properly preparing for the most common questions in a job interview will increase your chances of landing the position you aspire to. It is not about learning the answers by heart, but about doing a prior exercise of self-analysis and having the resources that will allow you to prove yourself. Experience will help you, and you will soon discover which formulas work best for you to reflect your most professional facet. Either way, practicing these payroll management questions and answers will bring you a step closer to your dream job!