Payroll Audit

What Does Payroll Audit Mean?

A payroll audit is conducted by an insurance company representative to review a company’s payroll. The primary goal of these audits is to ensure that employee benefit plans are accurately funded and compliant with relevant regulations.

Insuranceopedia Explains Payroll Audit

Life and health insurance are common types of coverage provided to employees through benefit plans. A key purpose of a payroll audit is to determine the premium owed for the previous year’s coverage. Since payroll data significantly impacts premium calculations, insurance companies conduct audits to ensure accuracy. This connection between payroll and premiums is most direct for workers compensation, where the policy is rated on the company’s total payroll broken out by job classification. General liability insurance often works the same way at audit time, with premiums adjusted up or down once the actual payroll figures for the policy period are confirmed.