Payroll has completely transformed in the past few years.
What used to be simple and straightforward has become much more complicated, involving multi-state taxes, payroll compliance, wage garnishments, and whatnot. And let’s not forget the complex environment of company guidelines, IT systems, and privacy regulations in which the employee pay systems are managed.
Naturally, expertise is essential here. Just as you wouldn’t want an inexperienced cardiac surgeon or defense attorney, you should have a professional with payroll certification for your company’s payroll—someone who has the skills and knowledge of the latest payroll systems and payroll legislation.
Considering a payroll certification is only awarded to payroll specialists after passing a certification exam, it proves that the individual has advanced skill sets and understanding in all things payroll. You can use their competence to ensure the smoother handling of day-to-day duties and challenges of payroll, along with efficient payroll operation management.
Why Does Payroll Certification Matter?
Payroll concepts can be challenging to grasp, especially for ones lacking accountancy experience. Additionally, modern payroll isn’t for the faint-hearted, which is why there is a lot that a payroll coordinator or specialist needs to know.
Getting a payroll certification makes workers more proficient in processing payroll efficiently and accurately. In turn, this can work wonders for your organization’s long-term survival.
What Does Success Look Like?
Payroll matters, and considering payroll certifications give individuals the capability to handle payroll better, they matter too. For more context, here are four ways payroll certifications can contribute to your business’s wellbeing:
Standardized Operation
Payroll teams often comprise people from diverse backgrounds coming from different states. They may include junior clerks and senior administrators, as well as individuals who have worked in different industries and company sizes.
Each individual will have their own ideology and best practices—some outdated, some just wrong. However, if your payroll team consists of members who have gone through the same payroll certification program, all of them will be on the same page about payroll operations. This will create a standardized approach that will not only save time but also prevent misunderstandings and resentment.
Improved Work Quality
Another challenge about payroll is its fast-paced nature. This, in combination with an extremely low tolerance of error, means everyone has to do their very best always.
Workers with payroll certification knowledge pertaining to payroll processes, causing fewer errors and a tremendous boost in productivity. They are more focused on what they do, which raises their performance levels. In fact, even when in training, members gain a better understanding of the nuances of the field.
Improved Staff Retention and Loyalty
According to a survey from The Workforce Institute at Kronos Inc, 49% of American workers would start a new job search after experiencing only two problems with their paychecks. Luckily, trained professionals can handle payroll better, making it likely for your employees to experience little to no errors concerning their pay.
Moreover, supporting employees during the quarter furcation process will instill in them a sense of loyalty towards your company, which, in turn, will improve employee retention. What’s more, allowing them to study on company time and paying for coursework and exam fees shows them how you’re invested in their professional development and value their contributions and professionalism.
The end result? Highly trained employees that’ll work loyally for you.
Greater Employee Commitment
Due to their compliance knowledge and attention to detail, it’s common for professionals to be surrounded by offers from your business rivals. But if your team members continue improving your payroll systems and attain their payroll certifications, they are essentially declaring their intention to make payroll a lifelong career while working for your company. If you help them gain this kind of certification while they’re working for you, they may well repay that investment with greater loyalty in the long term.
The Two Types of Payroll Compliance
The American Payroll Association (APA) is the de facto issuer of payroll certification. Currently, the authority offers two certificates to cater to the varying levels of payroll knowledge and professional experience, namely:
Fundamental Payroll Certification (FPC)
This payroll certification credential is meant for beginners, which is why payroll experience isn’t necessary to take this exam.
FPC is designed to service and support professionals in positions that require payroll knowledge and those who want to demonstrate a baseline of payroll competency. It covers basic fundamentals related to the field, such as Professional Payroll Skills and Responsibilities, Paycheck Concepts, Tax Reporting, and Accounting.
It’s best for the following individuals:
- Entry-level payroll professionals
- Sales professionals/consultants serving the payroll industry
- Systems analysts/engineers supporting payroll systems
- Payroll service provider client representatives
This 3-hour exam is administered electronically online at Pearson VUE testing centers and includes 150 multiple-choice questions. As for the exam fees, APA members and non-APA members have to pay $320 and $395, respectively.
Certified Payroll Professional (CPP)
This payroll certification credential is designed for individuals with extensive payroll experience and expertise. Naturally, individuals have to fulfill one of the several eligibility criteria before taking the CPP exam.
- Criteria 1 — Must have practiced payroll for at least three of the past five years before the exam date.
- Criteria 2 — Must have been employed as a payroll worker for at least two full years before the exam date, as well as having completed specific APA coursework within the same time period.
- Criteria 3 — Must have been employed as a payroll worker for at least 18 months before the exam date, have previously obtained their FPC, and have completed specific APA coursework within the same time period.
CPP has 190 multiple-choice questions, with candidates having four hours to complete them. The course covers topics like Core Payroll Concepts, Audit, Accounting, Payroll Administration and Management, Compliance/Research and Resources, and Paycheck Calculation.
The exam costs $380 for APA members and $550 for non-members.
Note: You can only use one title at a time. So if you pass the CPP exam after passing the FPC exam, you can only use the CPP designation after your name.
One Secret Weapon For Becoming a Better Payroll Professional
Irrespective of whether you get the FPC or CPP certification, you have to be well-versed with the latest payroll services.
A payroll service is designed to streamline and automate payroll processing and approval—all the while saving you tons of time and improving accuracy. While there are several solutions on the market, we highly recommend Gusto for payroll beginners and experts.
Gusto is a full-service platform that comes packed with several amazing features. With its clean, user-friendly interface, you can customize it to suit your business requirements. From employee onboarding to employee benefits to time tracking, this payroll solution offers everything to make your life incredibly easy.
What’s more, Gusto supports several third-party integrations with top accounting and HR applications, including QuickBooks, Bamboo HR, Freshbooks, and Nimble Schedule.
5 Essential Strategies to Pass a Payroll Certification Exam
In this section, we’ll discuss five strategies to improve your chances of passing your chosen payroll certification exam. Let’s take a look.
Download the Candidate Handbook
The APA has created the FPC Candidate Handbook and the CPP Candidate Handbook that will tell you everything you’ll want to know about eligibility, the application process, fees, the exam, and recertification.
The handbooks even give you a breakdown of every exam. For instance, in the CPP certification exam, Core Payroll Concepts cover 27% of the exam, Payroll Administration and Management account for only 10%. This will help you focus your time on the more important topics, improving your chances of passing the exam.
Take Tons of Mock Tests
Mock tests, as the name suggests, are exams designed to give you an idea about what you’re up against. We highly recommend taking full-length practice tests going up to 4 hours throughout your studying to gauge your overall knowledge and mentally prepare for the exam.
In fact, most FPC and CPP courses already come with plenty of practice tests to help you identify knowledge gaps and improvement areas. Alternatively, you can use platforms like Mometric that offer full-length exams as well.
Create a Realistic Study Schedule
You have to study. A lot. And the best way to do it right is by creating a structured sketch study schedule and following it diligently.
Generally, people require 6 to 8 weeks of study to prepare adequately for certification. But considering you know your capabilities best, you can create a schedule however you see fit. Plus, since you already know the topic breakdown, be sure to schedule your study time appropriately.
It’s also best to avoid cramming and instead, space out your study sessions. Studying for 30 minutes to an hour every day is way better than studying for 4 to 5 hours over the weekend. This will help your memory and problem-solving and boost your learning capacity.
Become an APA Member
No, this isn’t us promoting APA, and yes, you can still sit for the exams even if you’re not a member. It’s just that you get some fantastic benefits, such as
- Access to the APA’s monthly podcast, PayTalk
- Discounts on certification exams, online training, conferences, webinars, and publications
- Free entry in events and webinars and free eBooks
- Getting three Recertification Credit Hours (RCHs) every year
- Receiving the latest payroll compliance news and updates
- Professionals answering all your payroll questions
- Networking opportunities with other payroll professionals
Not bad, right? An APA membership costs $262 every month. There’s also a $35 enrollment fee that all new members are required to pay.
Consider Hiring an Experienced Instructor
You’ll find several free training courses available on the internet, but they don’t come close to instructor-led training.
Subject matter experts are experts for a reason. They bring real-life experience to the classroom, complete with deep knowledge and helpful insights. Moreover, you get a clearer understanding of topics when a living person explains them to you rather than reading straight out of a book.
Opting for the training program offered by APA is the safest bet. However, if you decide on another training program, make sure it’s APA-approved.
Most Common Mistakes of Payroll Certification
Here are some of the most common mistakes candidates planning to take payroll certification exams make. Be sure to avoid them at all costs!
- Not making your exam reservation. Most people assume that just because they received application approval from the APA, the job is done. Well, it isn’t. You still have to make your exam reservation at a Pearson VUE test center. You’ll have to log in to your APA certification dashboard and fill in the necessary data to reserve your seat.
- Not studying multiple resources. The payroll field is highly dynamic and constantly evolving. causing information to become outdated—fast. Precisely you shouldn’t rely on just one resource if you want to pass your certification exam. Do a quick internet search and try to find as many resources as you can—free study guides, textbooks, paid courses, podcasts, online lectures, and so on. This will keep you well-rounded and adequately prepared for the exam.
- Letting your certification expire. Unfortunately, payroll certification doesn’t last forever. Recertification is required after three years of you passing the FPC and five years for the CPP. You can either take a retest or accumulate recertification credit hours (RCHs) to maintain your certification. For FPC, you will need 60 RCHs, while the CPP requires 120 RCHs.
That’s it! That was everything you needed to know about payroll certification. These credentials will not only benefit you and your company but also equip your workers with advanced capabilities and knowledge to make them better at their job. It’s really a win-win for everyone!