Payroll review

Define every payroll change before the first live cycle.

Payroll review should separate each deduction and reimbursement entry, confirm the participating employee data, and document testing and recurring administration responsibilities.

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Review priorities

Questions and information to examine.

Pre-tax payroll configuration

Program materials describe a fixed qualified pre-tax payroll deduction that reduces the applicable taxable wage base. The exact deduction, coding, and participating employees are established during employer-specific implementation.

Support: PCBP mechanics

Taxable wages and reimbursement

The program pairs the applicable pre-tax benefit structure with a non-taxable medical reimbursement position tied to defined medical benefits. Payroll should review each line rather than treating the program as one generic adjustment.

Support: Program mechanics and IRS Publication 15

Employee data and census

Recent payroll information and an employee census are used to identify potential participants, validate eligibility, and prepare the employer-specific analysis before final configuration.

Support: Client process overview

Testing and first payroll

The implementation process includes payroll setup, a payroll call, and mock or testing steps before go-live. Ongoing processes should address new hires, terminations, invoices, and reconciliation.

Support: Implementation process
Payroll questionExactly what changes in payroll, how will it be tested, and what must happen during each pay period?
Relevant IRS guidance: IRS Publication 15 discusses employment taxes and certain medical-care reimbursements. Payroll and the employer’s advisers should verify the actual plan documents, payroll codes, reimbursement conditions, substantiation, and treatment of each participating employee.