How to Become a Payroll Accountant

Payroll accountants typically need a bachelor’s degree in accounting. They manage employee compensation and ensure that employees receive accurate, timely pay. They also distribute benefits, such as health insurance and retirement contributions, and supervise the collection and remittance of all applicable taxes.

Advanced software platforms have automated routine computational tasks in the payroll accounting profession. In response, payroll accountants have evolved, becoming more focused on analytics and compliance.

This career guide explains how to become a payroll accountant and whether this professional path matches your interests.

Steps to a Payroll Accountant Career

To become a payroll accountant, you generally need to follow these steps:

Required Education for a Payroll Accountant

Entry-level jobs that can lead to payroll accountant positions typically require an undergraduate degree. Some businesses may hire applicants with an associate degree in accounting, but a bachelor's program offers more rigorous academic preparation and opportunities for future advancement.

Some schools — typically community colleges but also some four-year institutions — offer certificate and associate degree programs specifically in payroll accounting. You can build payroll expertise by completing one of these programs before transferring to a bachelor's program with advanced standing.

Post-baccalaureate education can also enhance your payroll skills and boost your appeal to employers. Many schools offer graduate certificate programs in accounting. A master's degree may also support your educational growth, especially if you plan to sit for the Uniform CPA Examination. Examinees with master's degrees consistently post higher CPA exam pass rates.

Required Credentials for Payroll Accountants

Typically, payroll accountants do not need additional credentials beyond the required education and experience. However, employers may prefer to hire professionals with licenses or certifications — especially if they have complex payroll needs.

The following section covers the optional credentials that may help you advance into a payroll accountant position.

Optional Certifications and Degrees

The APA's FPC and CPP certification programs are designed for payroll professionals looking to advance their careers. Fundamental payroll certification is suitable for entry-level workers who want to validate their skills to employers. The certified payroll professional credential is for experienced professionals seeking to advance in the field.

You do not need any experience to qualify for FPC certification. However, the CPP exam is available to candidates with payroll experience in one of the following scenarios:

• For at least three of the past five years
• For at least the last 24 months, and have completed one of the APA's three CPP preparation programs
• For at least the past 18 months, you hold FPC certification, and you have completed one of the APA's three CPP preparation programs

You can also work in payroll accounting and many other advanced specializations by becoming a CPA. Specific licensing requirements vary by state, but they usually include:

• A bachelor's degree and 150 semester credits or the equivalent
• An accounting major, minor, or strong concentration of relevant coursework
• At least one year (usually 2,000 hours) of related professional experience
• Passing scores on all four sections of the Uniform CPA Examination

For further information, check with your state's accounting board or follow the CPA link below.

Required Experience for a Payroll Accountant

Payroll accountants typically advance into their roles by accruing years of experience in supporting positions.

You can start building experience as a student by pursuing a payroll-oriented internship or practicum. This will help prepare you for paid roles after you graduate.

Many payroll accountants start out as accounting clerks before becoming budget analysts or operational accounting specialists. Because payroll accountants often supervise the work of junior employees, it can help to gain experience in:

• Benefits administration
• Employee compensation compliance standards
• Payroll taxation for both businesses and individuals

Should I Become a Payroll Accountant?

The payroll accountant career path offers advantages, but it also poses drawbacks. On the plus side, businesses in virtually every industry have ongoing needs for accounting professionals with payroll expertise. Payroll is critical for organizations, and Business Research Insights estimated its global value at $5.44 billion in September 2024.

On the downside, payroll processing is one of the areas increasingly affected by advanced accounting software. Junior-level accounting clerks have been particularly impacted by modern accounting technologies. As a result, these roles are in decline — which can make it more challenging to build the entry-level experience you need to advance.

To compensate, sharpen your analytical accounting skills and compliance knowledge and pursue a bachelor’s degree in the field. Expertise in these topics may help insulate you from the technological impacts to the accounting profession and help you advance in the profession.

Payroll Accountant Job Outlook

The U.S. Bureau of Labor Statistics (BLS) projects 6% job growth for accountants and auditors from 2023-33. This outpaces the BLS's projected growth rate for the overall U.S. labor market.

Yet, the BLS expects a 5% contraction from 2023-33 in the accounting clerk positions payroll accountants may use as a stepping stone. Landing these important entry-level jobs could become more challenging and competitive.

These four resources can help you connect with available opportunities:

• Accounting Jobs Today: You can use this accounting-specific resource to search for accounting jobs at all levels throughout the United States.
• American Accounting Association Career Center: This professional association lists specialized job opportunities. You can apply precision filters to find location-based, remote, part-time, full-time, and role-specific openings.
• American Payroll Association Job Board: The APA operates a payroll-focused job board through a partnership with Jobing.com. Job-seekers enjoy registration-free access at no cost.
• Government Finance Officers Association Job Board: This specialized job board exclusively lists public-sector accounting and finance vacancies in the United States and Canada. Its job search categories focus on senior positions.

Upward Mobility of a Payroll Accountant

Payroll accountants can pursue many avenues for career development. The role provides training for certified public accounting, helping you meet the experience requirements to pursue CPA licensure. You could also leverage your payroll accounting experience to earn a certified management accountant (CMA) credential from the Institute of Management Accountants.

CPAs are advanced-practice accounting professionals who offer both technical and analytical expertise. Their duties typically focus on preparing financial documents and statements, managing tax obligations, and providing accounting expertise to an organization.

CMAs operate at the intersection of accounting and business management. They specialize in analyzing accounting data to find ways to boost organizational efficiency, growth, and profitability.

CPAs and CMAs often hold management positions because of their knowledge and experience in the field. According to BLS data from May 2023, financial managers earned a median salary of $156,100 per year.

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