What is a parallel run?

A parallel run is used when implementing a new payroll system or migrating to a new payroll provider. It involves running the old (legacy) payroll system and the new system during the same time for the same pay period to ensure that both produce the same results.

The goal of a parallel run is to validate that the new system functions correctly by comparing its output with that of the existing system. It ensures that employees receive the correct pay and that all calculations, including taxes and deductions, are accurate. It also helps users get comfortable with the new processes before completely switching over.

Parallel runs are typically used during the testing phase before fully transitioning to a new payroll system, ensuring that the new system is reliable and accurate. When completing a parallel run for payroll, the previous cycle is usually used. Conduct the parallel payroll run across different types of payroll scenarios, including regular, overtime, and special payments, to ensure the new system handles all cases correctly. If the payroll involves complex situations such as multiple tax jurisdictions, unique employee benefits, or custom deductions, ensure that these are accurately reflected in both systems.

How do you perform payroll parallel run testing?

Parallel run testing is fairly simple. To run a parallel test, companies should carry out the following steps:

1. Export all relevant information for the specific payroll cycle from the old provider, including taxes and benefits.
2. Input the exported information into the new payroll system.
3. Run payroll using the new system.
4. Compare the results from the new system to those of the old system to identify and correct any inconsistencies.

Who should carry out parallel run testing?

Payroll administrators usually perform parallel runs. If a company’s payroll is run by an accountant or bookkeeper, they should conduct the parallel runs. However, carrying out parallel runs adds to the workload of the payroll administrator. Payroll runs may require support from other teams within the company or from the new provider’s team. Asking the provider any questions that arise will be especially important for a smooth transition.

What are some common discrepancies to look for?

After running a parallel test for one payroll cycle, businesses can compare the results from the new and old systems entry by entry. Note any discrepancies and organize them by category. A few discrepancies to look for include:

· Data errors

· Errors from the old system

· Explainable differences (ex. rounding errors)

· Errors from rule creations (retro calculations, proration, custom deductions)

· Unexplainable errors

Address any discrepancies as fast as possible. Once addressed, rerun the parallel test. If further errors arise, rerun parallel test until all issues are solved.