A payroll audit verifies your people are paid correctly and the taxes around them are right.
Get an independent read on whether your payroll matches what tax law, employment agreements, and your own policies require. We find the discrepancies before they become penalties or disputes.
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1,331+
Verified client reviews
16+
Years auditing experience
AICPA
Peer-reviewed firm
50
States served nationwide
Why Payroll Audits Matter
Payroll is not just an operational function. It is a high-risk financial system that sits at the intersection of accounting, tax compliance, labor law, and human resources, governed by federal, state, and sometimes local rules on top of employment contracts, bonus and commission plans, and benefits policies.
Who a payroll audit is for
A good fit if you:
Run payroll across multiple states or for remote employees.
Use contractors alongside employees.
Have complex bonus, commission, or benefit structures.
Suspect overtime, classification, or tax-withholding errors.
Want assurance before an agency or auditor asks.
- Request a payroll review
Whether you run one payroll or many across jurisdictions, the engagement is scoped to where the financial and compliance risk sits. Insurance agencies paying producers on commission can fold this into the work of their accountant for insurance agency owners.
Where errors hide
Where payroll errors hide
Worker Misclassification
Contractors who should be employees, creating tax exposure and penalties.Overtime Miscalculations
Outdated pay rules or state-specific labor law applied incorrectly.Bonus and Commission Errors
Unclear plans, inconsistent formulas, or manual overrides.Payroll Tax Filing Issues
Incorrect withholding, late filings, or records that do not match the returns.Benefit Deduction Errors
Especially with complex healthcare, retirement, or multi-plan structures.
Talk to a CPA about your payroll
If payroll represents real money and you are not certain it is right, reach out.
We will tell you where the exposure sits and what it takes to fix it. No obligation, and you are handled directly by a professional.
What we review
What a payroll audit reviews
Classification and Onboarding
Employee versus contractor status and onboarding records.Gross-to-Net Calculations
Pay computed correctly across the full lifecycle.Wage and Overtime Compliance
Tested against federal and state wage and hour law.Payroll Tax Accuracy
Withholding, remittance, and employment tax filings reconciled.Benefits and Deductions
Deductions and employer contributions against plan documents.System Controls and Access
Protections against unauthorized changes and manual overrides.
How it works
How our payroll audit process works
- Step 1
Initial Consultation
We review payroll structure, workforce composition, and known risk areas.
- Step 2
System and Policy Review
We evaluate payroll systems, HR policies, and compensation frameworks.
- Step 3
Data Collection
We gather payroll registers, tax filings, employee records, and benefit documentation.
- Step 4
Testing and Analysis
We test calculations, classifications, and compliance with tax and labor regulations.
- Step 5
Findings and Impact Assessment
We identify errors, quantify financial impact, and highlight compliance risks.
- Step 6
Final Report
A clear, structured report for management review, remediation, or regulatory support.
Why a CPA firm
Why a payroll audit needs a CPA firm
Three disciplines at once
Payroll compliance sits across tax law, labor law, and system controls. Reading one without the others misses the exposure.Independent and defensible
Documentation suitable for internal and external stakeholders, not just an internal note.Peer-reviewed work
We are an AICPA peer-reviewed firm, so the review you receive has itself been reviewed.Recovery, not just findings
Audits often recover overpayments, missed credits, or incorrect deductions.
Why choose Dimov Audit
Why organizations choose Dimov Audit
Three disciplines — tax, labor law, system controls — applied to the same payroll, with documentation built for both internal use and external scrutiny.
500+
audit and attestation engagements
50
states served, nationwide coverage
CPA
independent and defensible documentation
disciplines: tax, labor law, system controls
Scoping
What drives the cost of a payroll audit
Payroll audit work is priced by the engagement, not a flat rate.
We size the work against your situation and give you a clear quote before you commit.
Connect with Dimov Audit
Our dedicated team is ready to assist you on your path to financial success.
24 Mercer St, 2nd Floor, Suite 214
New York, NY 10013
United States
Payroll audit FAQs
What does a payroll audit verify?
That employees are paid correctly, payroll taxes are calculated and remitted properly, and the controls around the payroll system are working. The work tests classification, gross-to-net calculations, wage and overtime compliance, payroll tax accuracy, benefit deductions, and system access controls — against tax law, labor law, employment agreements, and your own policies.What does worker misclassification cost?
Contractors who should be employees create back-tax exposure, unpaid employment taxes, missed benefits, and accuracy-related penalties. The IRS, state agencies, and the Department of Labor each have separate enforcement authority — and reclassification often triggers all three. Catching it before any of them does is the cheaper option.Why does a payroll audit need a CPA firm?
Payroll compliance sits across tax law, labor law, and system controls — reading one without the others misses the exposure. A CPA firm's documentation is independent and defensible (suitable for internal and external stakeholders, not just an internal note), and the same review that surfaces problems often recovers overpayments and missed credits.When should we run a payroll audit?
When payroll runs across multiple states or for remote employees, when contractors work alongside employees, when bonus or commission structures are complex, when overtime / classification / withholding errors are suspected, or when leadership wants assurance before an agency or auditor asks. Many organizations run periodic audits as a compliance health-check.What drives the cost of a payroll audit?
The number of employees and pay groups, the number of states and jurisdictions involved, the complexity of compensation and benefits, and whether you are reviewing proactively or responding to an issue. We give you a clear quote against your situation before you commit.
Reviewed byGeorge Dimov, CPA.Founder of Dimov Audit, the firm behind 500+ audit and attestation engagements across all 50 states.
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