SOP: Payroll Step 3

A comprehensive guide to payroll processing, including how to add severance pay, PTO payouts, deduction adjustments, and manage employee terminations. Learn step-by-step payroll worksheet management for accurate and efficient payroll administration.

March 30, 2026 By Jessica Esslinger

In this guide, we'll learn how to manually update payroll records for employees, including adding severance pay, adjusting hours, processing PTO payouts, and handling benefit refunds. We will also review how to ensure all payroll changes are accurate before finalizing each batch.

This process helps maintain correct payroll data and ensures employees receive the right compensation and deductions.

Let's get started

Okay. We were reviewing the Comp 1 tab to check for any additional payroll that needed to be added manually. We left off with Linda Roberts.

Step #3: Click on "Pay separation compensation $ 1,225.70" — Click on "Pay separation compensation $ 1,225.70"

We need to add pay separation compensation for 12/25/70.

Step #4: Double-click on "should have approxmiately 40 hours for first check" — Double-click on "should have approxmiately 40 hours for first check"

Step #5: Drag "should have approxmiately 40 hours for" — Drag "should have approxmiately 40 hours for"

We will go to Add Worksheet.

Type "Ctrl + C"

Step #8: Click on "Add worksheet ①Add time / time off worksheet" — Click on "Add worksheet ①Add time / time off worksheet"

Go to Worksheet Creation Options and click the dropdown.

I already have several templates created. We will go to Severance Pay.

You can enter severance pay here if you wish.

It's your choice; you don't have to.

I will copy and paste it.

Type "Ctrl + C"

Type "Ctrl + V"

Click Next.

Step #17: Click on "Next >" — Click on "Next >"

I am going to search for Linda.

Step #18: Click on "Search by name or posi" — Click on "Search by name or posi"

She did not appear here because the selected list is active.

Type "linda"

Open the dropdown, select All Employees, and you will see that she appears.

Check her, then click Submit.

Step #23: Click on "Submit" — Click on "Submit"

From here, you can see her severance pay amount. You would just...

Type "Ctrl + V"

Oops.

Type "Ctrl + A"

Enter her amount: 1,225.70.

Type "1225.7"

I'll double-check.

Click Save, then Auto Balance. This sets it to balance, so there is no difference.

Step #32: Click on "SAVE" — Click on "SAVE"

Step #33: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #34: Click on "DONE" — Click on "DONE"

Click Done. Okay. You can see that our severance pay is available. We will go back.

New hire Bridget's date of hire is 3/16. She should have about 40 hours for her first paycheck.

Step #36: Click on "Only pay for hours on timecard" — Click on "Only pay for hours on timecard"

Step #37: Click on "Check with EH to see if there is separation pay ." — Click on "Check with EH to see if there is separation pay ."

We're going to begin. My computer screen is going black again. We will go to the batch showing hours.

Her name was Bridget Hopkins.

She has approximately 40 hours.

Step #42: Click on "Search Employee by File # or Name" — Click on "Search Employee by File # or Name"

That looks great.

Type "hopki"

Step #44: Click on "DONE" — Click on "DONE"

I will mark this one as completed because I know it is finished.

Once you mark it complete, it turns green, which is nice.

Type "Complete + Enter"

This is an extra row, so I'll mark it as complete.

Type "com + Enter"

Okay. Everything here looks great. Um... Let's see. Doo, doo, doo, doo.

We will stop here because we need to add commissions, but I am waiting for commissions from Julie.

Commissions are usually paid with the second paycheck of each month at most companies. We will go back to the Payroll Dashboard.

Step #53: Click on "← Back to Payroll Dashboard" — Click on "← Back to Payroll Dashboard"

The next one we will do is Risikon. Go to Manage Payroll.

Step #54: Click on "Manage payroll" — Click on "Manage payroll"

We will go to our worksheet and look at Risikon.

Step #56: Click on "Rizikon" — Click on "Rizikon"

There is one here.

I will highlight it in yellow.

All right.

Step #63: Click on "Dismiss" — Click on "Dismiss"

Last day of work was March 20. Paid for 80 hours, including 40 hours of PTO and refunded benefits. She will work part-time in the future, but she is currently terminated. If we need to reactivate her, we can. We need to ensure she is paid for 80 regular hours and receives a payout of 40 hours PTO.

Step #64: Click on "Misti will be working PT in future but" — Click on "Misti will be working PT in future but"

We'll start with those two.

We will look at the batch first to see if she is included.

I'm going to click it.

Step #68: Click on "DONE" — Click on "DONE"

Go to Add Worksheet and click Additional Hours.

Step #69: Click on "+ Add worksheet" — Click on "+ Add worksheet"

Step #70: Click on "How do you want to start creating the worksheet ? Select the template to use" — Click on "How do you want to start creating the worksheet ? Select the template to use"

I'll copy and paste that.

Step #72: Drag "Additional Hours" — Drag "Additional Hours"

Type "Ctrl + C"

Step #74: Double-click here — Double-click here

Type "Ctrl + V"

We will choose Misty.

Step #76: Click on "Next >" — Click on "Next >"

Step #77: Click on "Next >" — Click on "Next >"

Step #78: Click on "Search by name or positic" — Click on "Search by name or positic"

She isn't here because this is only an active list.

Type "mis"

Step #80: Click on "< status is active >" — Click on "< status is active >"

Step #81: Click on "< all employees >" — Click on "< all employees >"

Go to All Employees, select Misty, review her details, and submit.

Step #83: Click on "Submit" — Click on "Submit"

She should have 40 hours.

Next, insert a column for the rate code.

Type "40"

Step #87: Click on "INSERT▾" — Click on "INSERT▾"

Step #88: Click on "Column" — Click on "Column"

Click Done.

Type "rate"

Step #90: Click on "Rate Code" — Click on "Rate Code"

Step #91: Click on "DONE" — Click on "DONE"

This way, we can select her rate for 40 hours instead of using the salary.

Step #93: Click on "2-48.0770" — Click on "2-48.0770"

It will multiply 40 by her rate code.

Auto-Balance complete.

Step #96: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #97: Click on "DONE" — Click on "DONE"

Next, we need to process her PTO payout.

Step #98: Click on "+ Add worksheet + Add time / time off worksheet" — Click on "+ Add worksheet + Add time / time off worksheet"

Go to Add Worksheet, then select PTO payout.

Step #99: Click on "Select one" — Click on "Select one"

Step #100: Click on "PTO Payout" — Click on "PTO Payout"

Oops.

102

Type "Ctrl + C"

Step #103: Click on "Deduction - Adjust" — Click on "Deduction - Adjust"

104

Type "Ctrl + V"

I will copy and paste the PTO payout here for reference, so I know which worksheet is which.

108

Type "Ctrl + V"

Step #110: Click on "Next >" — Click on "Next >"

Again, we will choose Misty.

Step #112: Click on "Search by name or posi ..." — Click on "Search by name or posi ..."

She is not there. We need to go to All Employees.

113

Type "mis"

Step #114: Double-click here — Double-click here

Step #115: Click on "< all employees >" — Click on "< all employees >"

She is terminated.

Step #117: Click on "Submit" — Click on "Submit"

Submit. The PTO payout amount is 40 hours.

We will do pay-1. That's fine.

Rate code is 2.

Step #122: Double-click here — Double-click here

Step #123: Click on "2-48.0770" — Click on "2-48.0770"

I just realized that on the other worksheet, I put 40 instead of 80.

125

Type "40"

This pays her out for 40 hours of PTO.

Save. Done.

Step #128: Click on "SAVE" — Click on "SAVE"

Step #129: Click on "DONE" — Click on "DONE"

I forgot to auto-balance.

Step #130: Click on "Let me balance now" — Click on "Let me balance now"

Now, I will go back into Additional Hours because I realized I only paid her 40, but she should have been paid 80.

Step #131: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #132: Click on "DONE" — Click on "DONE"

Step #133: Click on "Wrksh001" — Click on "Wrksh001"

Auto-balance complete.

136

Type "80"

Step #138: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

Step #139: Click on "DONE" — Click on "DONE"

Okay, we have those two done.

We need to refund her benefits for three prepaid checks. If you have a screenshot, you can easily add it to a cell. Simply insert the screenshot into the cell, then click the button to place it inside.

Step #141: Double-click here — Double-click here

Step #144: Drag "LTD - LTD Post Tax" — Drag "LTD - LTD Post Tax"

Step #145: Click on "3 check" — Click on "3 check"

This way, when I want to view it, I can restore it to its original size. I need to process three refunds for three prepaid checks.

Step #147: Double-click here — Double-click here

Okay.

So, 303.

I will make quick notes on the side, such as 1618, 2958, and 3074.

154

Type "16.18 + Enter"

155

Type "29.58 + Enter"

156

Type "24.52 + Enter"

157

Type "30.74 + Enter"

I will multiply this by 3. I will drag it down.

159

Type "+*3 + Enter"

Step #160: Click on "48.54" — Click on "48.54"

We will do a quick auto sum to ensure the amount matches what Erica or Alyssa have.

Step #162: Click on "16.18 48.54 29.58 88.74 24.52 73.56 30.74 92.22" — Click on "16.18 48.54 29.58 88.74 24.52 73.56 30.74 92.22"

Step #163: Click on "AutoSum" — Click on "AutoSum"

164

Type "Enter"

Step #165: Click on "303.06" — Click on "303.06"

It is.

166

Type "Ctrl + B"

For quick checks and balances when entering it, I will copy what it says, such as Dennis, Dental Ltd., Medicare, Medical, and STD.

168

Type "DEN + Enter"

169

Type "LTD + Enter"

170

Type "MED + Enter"

171

Type "STD + Enter"

I'm going to put that baby back in the box.

Step #173: Click on "Thi" — Click on "Thi"

Oops. That way, we can save it for future reference.

174

Type "Ctrl + Z"

Step #176: Click on "3 check" — Click on "3 check"

These are the amounts I will pay out.

178

Type "B"

So...

180

Type "Ctrl + B"

I'm going to add a worksheet.

Step #183: Click on "Add worksheet + Add time / time off worksheet" — Click on "Add worksheet + Add time / time off worksheet"

Going to make a deduction adjustment.

Step #184: Click on "..." — Click on "..."

Next.

187

Type "Ctrl + C"

190

Type "Ctrl + V"

Step #191: Click on "Next >" — Click on "Next >"

Next, select Misty. Go to "All Employees" so she appears in the list.

Step #192: Click on "Next >" — Click on "Next >"

Step #193: Click on "< status is active >" — Click on "< status is active >"

Step #194: Click on "< all employees >" — Click on "< all employees >"

Step #195: Click on "Search by name or posi" — Click on "Search by name or posi"

Click Misty, then submit.

196

Type "MIS"

Step #198: Click on "Submit" — Click on "Submit"

Now, the first code here was...

We need to add dental, LTD, medical, and STD.

Step #202: Click on "48.54 DEN" — Click on "48.54 DEN"

Step #203: Click on "73.56 MED" — Click on "73.56 MED"

Step #204: Click on "92.22 STD" — Click on "92.22 STD"

Step #205: Click on "92.22 STD" — Click on "92.22 STD"

The code will include dental, LTD, medical, and STD, each separated by a tab. Since it is a refund, we need to enter these as negative amounts.

207

Type "DEN + Tab + TabLTD + Tab + TabMED + Tab + TabSTD + Tab"

Step #208: Double-click here — Double-click here

Step #211: Click on "88.74 LTD" — Click on "88.74 LTD"

I'm going to split my screen.

Step #212: Double-click here — Double-click here

If I can do it appropriately.

Step #214: Drag "Editing" — Drag "Editing"

Okay, so dental is negative 48.54.

Step #217: Double-click here — Double-click here

LTD is negative 88.74.

219

Type "-48.54"

Step #220: Click on "Amount Code MED - H ..." — Click on "Amount Code MED - H ..."

Medical is negative 73.56.

221

Type "-88.74"

STD is negative 92.22.

223

Type "-73.56"

Now we will auto balance that.

225

Type "-92.22"

Step #228: Click on "AUTO BALANCE" — Click on "AUTO BALANCE"

We will double-check the figures from our work paper.

That looks good. Then click Done.

Step #231: Click on "DONE" — Click on "DONE"

Let's check if there are any additional notes we need to add.

It looks good.

235

Click on "we will need to reactivate her profile and make her hourly so she doesn't automatically get paid"

I will not mark it complete until I run the final payroll reports and review them to ensure everything is correct.

Risicon is good.

238

Click here

Next, we will do Star Tech. Manage payroll. Go to the work paper. Then, go to Star Tech.

Step #239: Click on "Manage payroll" — Click on "Manage payroll"

There are no notes, so Star Tech is good to go.

The next one we can do is...

Step #245: Click on "← Back to Payroll Dashboard" — Click on "← Back to Payroll Dashboard"

Let's do SCA.

Step #246: Click on "Manage payroll" — Click on "Manage payroll"

Are there any SCA notes?

Step #247: Double-click here — Double-click here

Step #249: Click on "SCA" — Click on "SCA"

No SCA notes, which is good.

Next one we can do...

Step #252: Click on "← Back to Payroll Dashboard" — Click on "← Back to Payroll Dashboard"

I may need to make a new video for the next one. Let's check Financial Designs.

Step #253: Click on "Manage payroll" — Click on "Manage payroll"

This one does have one.

Step #255: Click on "FDI" — Click on "FDI"

Jordan Henderson says a loan will be repaid in 12 to 15 installments, deducted from her paycheck, including commissions.

Step #257: Click on "Left" — Click on "Left"

Um, do, do, do.

There are no commissions on this one, and she does not earn enough in her check to start the loan repayment. I will move this to the next paycheck on 4/10, which is already listed here.