Validation Payroll

What is Validation Payroll?

Validation payroll, also called parallel payroll testing, is the process of running payroll calculations through new systems alongside existing systems to verify accuracy before going live. This validation compares outputs including gross pay, tax calculations, deductions, net pay, and employer contributions between systems to identify discrepancies.

Organizations typically conduct validation across multiple pay periods, testing various scenarios including bonuses, overtime, new hires, and terminations. Discrepancies trigger investigation and correction before transitioning fully to new systems. Validation payroll is critical quality assurance protecting against calculation errors that could cause regulatory non-compliance, financial loss, and employee dissatisfaction. Thorough validation ensures payroll accuracy and builds confidence before decommissioning legacy systems.