What does a Head of Payroll do?

Author Thomas Cloppenburg
March 24, 2025

A Head of Payroll plays a crucial role in managing and overseeing payroll operations. As businesses expand and labour laws become increasingly complex, the demand for experienced payroll professionals continues to grow.

The Head of Payroll is responsible for ensuring payroll accuracy, managing payroll systems and staying compliant with labour laws. They work closely with HR, finance and external service providers to handle salary payments, deductions and reporting. Their expertise spans areas such as payroll tax compliance, social security contributions and benefits administration, making them a key figure in the financial and HR departments of a company.

Depending on the company’s structure, the Head of Payroll may report to a Chief Financial Officer (CFO), HR Director or another senior executive, with responsibilities varying based on company size and industry.

What does a Head of Payroll do day to day?

The role of a Head of Payroll varies depending on the company and industry, but a typical job description includes:

Payroll processing and management

  • Overseeing end-to-end payroll processing, ensuring salaries are paid correctly and on time
  • Managing payroll software and tools to optimise payroll operations
  • Handling payroll accounting and ensuring proper documentation

Compliance and tax regulations

  • Ensuring compliance with tax laws, payroll tax requirements, social security contributions and labour regulations
  • Staying updated with changes in tax and employment laws to mitigate risks
  • Liaising with tax authorities and auditors for payroll-related matters

Payroll strategy and optimisation

  • Developing payroll policies and procedures to enhance efficiency and accuracy
  • Identifying opportunities for payroll automation and process improvement
  • Managing payroll budgets and cost analysis to ensure financial efficiency

Employee benefits and deductions

  • Administering statutory and voluntary benefits such as health insurance and pensions
  • Ensuring correct deductions for taxes, social security and other obligations
  • Managing payroll-related employee queries and resolving discrepancies

Team leadership and collaboration

  • Leading and training payroll teams to ensure best practices are followed
  • Collaborating with HR and finance departments to align payroll with company policies
  • Communicating with external payroll service providers and consultants
  • Encouraging team members to take ownership of payroll-related initiatives

What does a Head of Payroll earn in Germany?

The average salary of a Head of Payroll in Germany depends on factors such as company size, industry and location. Cities like Frankfurt, Berlin and Munich typically offer higher salaries due to the demand for payroll expertise.

Salary ranges for a Head of Payroll:

  • Large businesses or multinationals: EUR 120,000 to EUR 180,000 annually
  • Mid-sized companies: EUR 90,000 to EUR 120,000 annually
  • Start-ups and small companies: EUR 75,000 to EUR 90,000 annually

What skills and experience should a Head of Payroll have?

To succeed as a Head of Payroll, professionals must possess a diverse skill set, including:

Payroll expertise:

  • Strong knowledge of payroll laws, tax regulations and social security contributions
  • Experience with software such as SAP, DATEV and external providers such as ADP, Cloudpay, Zalaris and SDWorx
  • Understanding of payroll accounting and financial reporting
  • Familiarity with labour laws, collective agreements and employment contracts
  • Experience with audits, compliance checks and liaising with tax authorities
  • Knowledge of GDPR and data protection laws related to payroll processing
  • Understanding of legal requirements for payroll tax and deductions

Leadership and strategic thinking:

  • Ability to manage and mentor payroll teams
  • Experience in process optimisation and payroll strategy development
  • Strong problem-solving skills to address payroll discrepancies and challenges
  • Effective project management skills to oversee payroll-related initiatives

Technical and analytical skills:

  • Proficiency in Excel and payroll reporting tools
  • Ability to analyse payroll data and optimise cost efficiency
  • Experience with automation and digital payroll transformation

Communication and collaboration:

  • Strong interpersonal and communication skills to work with HR, finance and external providers
  • Ability to explain complex payroll topics to employees and management

Many professionals in this role hold degrees in finance, accounting, business administration or a related field. Certifications such as Certified Payroll Professional (CPP) or HR-related qualifications can enhance career prospects.

Can a Head of Payroll specialise?

A Head of Payroll can specialise in various areas, including:

  • Global payroll management: Handling payroll across multiple countries and international compliance
  • Payroll technology and automation: Implementing and optimising payroll systems and software
  • Tax and compliance: Focusing on tax regulations, audits and legal compliance
  • Compensation and benefits: Managing employee compensation packages and benefits administration

What is the career path for a Head of Payroll?

The typical career progression for a Head of Payroll includes:

  • Payroll Specialist/Payroll Administrator: Gaining experience in payroll processing and compliance
  • Payroll Manager: Overseeing payroll teams and managing payroll operations
  • Head of Payroll: Leading payroll strategy and ensuring compliance at a company-wide level
  • Director of Payroll/Chief Financial Officer (CFO): Overseeing payroll and financial strategy on a larger scale

What opportunities does a Head of Payroll have in Germany?

Germany’s demand for payroll professionals remains high, especially in industries such as finance, manufacturing, healthcare and technology. As payroll regulations continue to evolve, companies seek skilled Heads of Payroll to ensure compliance and operational efficiency. This is a critical role that requires specific qualifications, such as a degree in finance, accounting or a related field, along with extensive experience in payroll management. Therefore, finding qualified candidates for this role can be challenging due to the specialised skills and experience required. 

Get in touch if you are interested in a Head of Payroll job. We can support you throughout your job search, application process and beyond.

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