Payroll is something that every business needs to worry about. Whether you have 5 or 500 employees, your business must have some sort of payroll department (even when it’s just you) in place.
For most microbusinesses, the owner/manager is the one to handle the tasks that are usually assigned to the payroll administrator. However, as the company grows, the situation will change and payroll will become a true department. If the business becomes a corporation (with 500+ employees), then the position of payroll coordinator may be necessary.
Therefore, the main difference between these two positions is in the size of the business. The payroll coordinator is not needed until the company has to keep track of lots of people working together in different departments and divided into various teams.
Still, there are nuances to each position, so if you are interested in knowing more, here are the main differences between payroll administrators and payroll coordinators:
What does a payroll administrator do?
As it’s quite easy to assume from the title, the payroll administrator oversees and manages payroll and related activities. This includes the following:
- Processing payroll with any additions for each employee (such as bonuses, commissions, holiday pay, overtime, and so on).
- Recordkeeping of documents, payroll history, transactions, and others.
- Collecting and entering timesheets (if the process is not automated)
- Processing accounting transactions that have to do with payroll
- Keeping in contact with HR or the person representing the department
- Retaining and filing each employees’ income tax and other fees that may apply
- Other activities that have to do with payroll
As you can see, there are plenty of tasks that fall under the care of the payroll administrator. However, the department cannot function inside a company without support from other departments such as HR and accounting. Moreover, the person hired in this position needs to have an associate’s degree and at least three years of payroll experience and payroll certification.
This means that you can’t simply hire a payroll administrator and be done with it. This position needs proper support from colleagues and other departments in order to function as intended. Small and medium-sized businesses are better off outsourcing the entire payroll process because this gives them access to experts in payroll, accounting, and bookkeeping they wouldn’t have otherwise.
What does a payroll coordinator do?
The job of a payroll coordinator is to help the payroll department communicate with all the other departments in a large organization (with lots of employees). The payroll coordinator is the one to collect paperwork for vacation requests, leave-of-absence, timesheet cards or sheets, and any other payroll-adjacent data.
They then process this data and introduce everything into the system, double-checking everything is correct and well-formatted. They also help with any corrections or problems the employees may have (related to this department).
The person(s) occupying this position needs strong communication and writing skills in order to do a great job. They should also have on-the-job experience with automated payroll systems and attention to detail.
There are a series of fundamental differences between these two positions. The most visible one is their relationship with the company. The administrator is responsible for the payroll process within the company, while the coordinator only activates in relation to other departments. If the company is really big, there usually is a payroll coordinator per department.
Another difference is in the way these two positions work. The payroll administrator usually works alone or with one or two assistants, using the system to create reports and process data. The payroll coordinator is always in contact with employees, making sure their demands and requests are heard. They are also the ones in charge of feeding accurate data to the payroll system and the ones to check the records and identify problems.
The payroll administrator is a role that needs to exist in any company, regardless of size. That’s why payroll outsourcing is so common among small and medium-sized businesses. On the other hand, the payroll coordinator is only needed in large companies, where the increasing number of employees makes it difficult to keep track of everyone’s payroll-related needs and requests.