How to Fix Payroll with AI: 20 Prompts You Can Use Today

Curious about using AI in your day-to-day payroll operations? You’re not alone. Interest is rising, with 47% of payroll professionals currently using AI in their payroll functions, and another 40% considering it.

At Deel, we believe AI can be a transformative tool for improving the efficiency and accuracy of almost any back office. While AI will always need human oversight and expertise to be truly effective, when you know how to use correctly, you can unlock untapped insights, guidance, and data.

Common use cases for AI in payroll

AI tools and chatbots can help you calculate payroll faster, dig into data for actionable insights, help you draft documentation, and more. Here’s a closer look at the use cases for AI in payroll:

• Automated payroll calculations: Quickly manage routine calculations such as gross-to-net pay, overtime premiums, tax withholdings, and benefit accruals, eliminating manual errors
• Report generation and analytics: Create detailed, structured payroll reports such as summaries of total wages, deductions by department, or comprehensive year-end analyses of taxes, overtime, and benefits trends
• Continuous compliance management: Get overviews of specific regulatory deadlines or changes without time-consuming manual research
• Data validation and error detection: Identify errors and inconsistencies in payroll data by checking payroll entries against expected patterns such as standard tax rates or minimum wage requirements
• Employee self-service and communication: Use AI-powered chatbots to handle common employee payroll inquiries, freeing up payroll and HR teams to focus on more complex issues and operational efficiency
• Automated document and policy drafting: Draft clear, consistent, and professional payroll-related communications, including salary adjustment letters, policy updates, or FAQs
• Strategic payroll planning and forecasting: Perform strategic analyses and "what-if" scenario planning, using historical payroll and workforce data by generating projected payroll costs from hiring initiatives, salary increases, or regulatory changes

Learn more: How Automation and AI in Payroll Can Elevate Your Productivity and Compliance

20 AI prompts you can use for payroll today

One of the best ways to harness AI is to ask the right questions or give it the right tasks. In other words, to craft effective prompts.

Below is a list of useful prompts that payroll managers, finance managers, and HR managers working in payroll can use in their daily work. You can use these prompts as written or adapt them (swap in your specific details, region, numbers, etc.) to fit your scenario.

Category: Core calculations and data analysis

1. Prorating pay for a new hire

Scenario: An employee is starting in the middle of a pay period, and you need to calculate their first paycheck correctly.

Potential follow-up prompts:

• "Compare the 'calendar day' proration method with the 'working day' method, listing the pros and cons of each."
• "How would I adapt this formula for an hourly employee instead of a salaried one?"
• "Draft a simple, clear explanation for a new employee on how their first paycheck was prorated."
• "What are the typical downstream impacts of a prorated first pay on things like benefit deductions or accruals?"

2. Calculating overtime with a bonus

Scenario: A non-exempt employee worked overtime and also earned a performance bonus in the same workweek. You need to understand how this affects their overtime rate.

Potential follow-up prompts:

• "Provide a step-by-step example of a blended rate calculation using a weekly salary of $1,000 and a $200 bonus over 45 hours."
• "What types of payments are generally excluded from this type of blended rate calculation?"
• "How does the principle change if the bonus was earned over several weeks but paid in a single week?"
• "Draft a brief, easy-to-understand explanation of this concept for a department manager."

3. Gross-to-net pay estimation

Scenario: HR wants to offer a candidate a specific "take-home" bonus amount, and you need to calculate the gross amount required to cover all deductions.

Potential follow-up prompts:

• "What key variables do I need to confirm to make my marginal deduction rate estimate more accurate?"
• "Explain the limitations or potential inaccuracies of using an estimated rate versus a full system calculation."
• "How would this calculation differ for a regular salary payment versus a one-time supplemental payment?"
• "Create a simple calculator in an Excel formula format for this."

Note: With Deel’s real-time payroll feature, you get instant G2N calculations for immediate data and faster decision-making.

4. Identifying payroll anomalies

Scenario: Before finalizing a pay run, you want to perform a quick check for major errors or outliers.

Potential follow-up prompts:

• "Suggest three data validation rules I can apply before every pay run to proactively catch these issues."
• "Create a template for an 'Anomaly Report' that I can send to department managers for verification."
• "Beyond net pay, what other data points (e.g., hours, deductions, bank details) are critical to include in a pre-payroll audit?"
• "Outline a standard procedure for investigating and resolving a flagged anomaly before the payroll is finalized."

5. Year-over-year cost analysis

Scenario: You are preparing a report for leadership on how payroll costs have evolved over the last year.

Potential follow-up prompts:

• "Turn this analysis into three concise bullet points for a presentation to a non-financial audience."
• "What are some common factors that could explain why the 'average cost-per-employee' has increased?"
• "Suggest three different charts or graphs to visually represent this data effectively."
• "Based on these trends, create a simple projection for the total labor cost for Year 3, assuming a 5% increase in headcount."

Category: Compliance and policy frameworks

6. Mandatory annual bonus / 13th month salary

Scenario: Your company operates in a location that mandates an annual bonus, and you need to ensure you're compliant.

Potential follow-up prompts:

• "What are the typical tax and social security implications of these types of payments?"
• "Draft a policy statement for our employee handbook explaining how this bonus is calculated and paid."
• "Outline the most common disputes or points of confusion employees have about this type of bonus."
• "Create a checklist for processing this annual payment run."

7. Final paycheck on termination

Scenario: An employee is leaving the company, and you need to ensure their final pay is handled correctly according to local laws.

Potential follow-up prompts:

• "What are the five most common errors or omissions made when processing a final paycheck in [Country]?"
• "Outline a generic off-boarding process that payroll should coordinate with HR and IT."
• "Draft a neutral, informative exit communication for the departing employee explaining when and how they will receive their final pay and tax documents."
• "What are the typical post-termination reporting requirements for a company?"

8. Data retention policy

Scenario: You are establishing a policy for how long your department must keep payroll records.

Potential follow-up prompts:

• "What are the primary categories of payroll data that may have different legal retention period requirements?"
• "Outline a process for securely destroying payroll data once it has passed its retention period."
• "Create a simple Data Retention Schedule in a table format for different document types (e.g., pay stubs, tax forms, timesheets)."
• "Draft a communication to the broader company about the importance of adhering to this data retention policy."

9. New hire without standard tax documents

Scenario: A new employee has started but has not provided the standard tax withholding forms from a previous employer or the government.

Potential follow-up prompts:

• "Draft a neutral, informative email to a new employee explaining this situation and guiding them on how to resolve it."
• "Create a timeline showing the escalation process if the employee fails to provide the documents after 7, 14, and 30 days."
• "What are the potential financial penalties for the company if it fails to apply the correct default tax treatment?"
• "Outline a process for making a retroactive adjustment once the correct documents are finally received."

10. Leave payout rules

Scenario: You need to understand which types of leave balances are typically paid out when an employee leaves.

Potential follow-up prompts:

• "Are company policies on this topic usually allowed to be more generous than the statutory minimum?"
• "Draft a clear and concise policy statement for an employee handbook regarding the payout of leave upon termination."
• "What are the common methods for calculating the rate of pay for unused leave (e.g., final salary rate vs. an average over time)?"
• "How are leave payouts typically taxed compared to regular salary?"

Category: Employee communication

11. Explaining a pay stub

Scenario: A new hire is confused by the layout and deductions on their first pay stub.

Potential follow-up prompts:

• "Create a generic FAQ to attach to this email, covering questions like 'How is my tax calculated?' and 'Why did my leave balance change?'"
• "Generate a script for a five-minute video that visually walks through a sample pay stub."
• "Turn the key points of the email into a visual one-page PDF guide with placeholders for graphics."
• "How would you explain the difference between 'voluntary' and 'statutory' deductions to someone with no financial background?"

12. Announcing a payroll system change

Scenario: Your company is migrating to a new payroll software, and you need to inform all employees.

Potential follow-up prompts:

• "Create a project communication plan for this system migration, with audiences including employees, managers, and leadership."
• "Draft a detailed FAQ for employees to address their top concerns about the new system."
• "Now, draft a separate, more detailed email for managers about their new responsibilities, like a new approval workflow."
• "Generate a timeline template for a payroll system migration project, highlighting key communication touchpoints."

13. Responding to a pay error with empathy

Scenario: You have identified an underpayment for an employee and need to communicate this to them professionally and empathetically.

Potential follow-up prompts:

• "Condense this situation and resolution into a two-sentence summary for an internal error-tracking log."
• "Generate a list of 'dos and don'ts' for communicating pay errors to employees."
• "Create a script for a follow-up phone call to the employee to ensure they have received the corrective payment and have no further questions."
• "Outline a root cause analysis process to prevent this type of error from happening again."

14. Communicating a pay schedule change

Scenario: Due to a public holiday, you need to move a pay date forward.

Potential follow-up prompts:

• "What are the key operational steps to check off with our bank or payment provider when making such a change?"
• "Create a visual timeline that I can post in company channels showing the old deadline/pay date and the new deadline/pay date."
• "Draft a separate, more direct reminder for managers about the importance of the new, earlier timesheet approval deadline."
• "List three common issues that can arise from a last-minute payroll schedule change and how to mitigate them."

15. Explaining pre-tax vs. post-tax deductions

Scenario: An employee asks why some benefit deductions lower their taxable income while others don't.

Potential follow-up prompts:

• "Create a simple two-column table showing common examples for each category (e.g., retirement plan, health insurance, charitable donations, garnishments)."
• "Use an analogy to explain the concept to someone with no payroll or finance knowledge."
• "Draft a section for an employee benefits guide that explains this concept clearly."
• "How does a pre-tax deduction affect the calculation of other payments, such as percentage-based bonuses or life insurance coverage?"

Category: Process and system management

16. Creating a payroll processing checklist

Scenario: You are documenting your procedures to train a new team member or ensure consistency.

Potential follow-up prompts:

• "For each item on the checklist, suggest a key performance indicator (KPI) to measure its success, such as 'data accuracy rate' or 'time to completion'."
• "Add a 'Responsibility' column to this checklist with roles like 'Payroll Admin' and 'Payroll Manager' and assign each task."
• "Now create a separate, more detailed checklist specifically for the 'Year-End Processing' cycle."
• "Based on this checklist, what are the top 5 most critical internal controls that should be in place?"

17. Drafting a standard operating procedure (SOP)

Scenario: The process for handling special payments like bonuses is informal and needs to be standardized.

Potential follow-up prompts:

• "Create a simple flowchart based on the steps in this SOP."
• "Draft an email to introduce this new SOP to HR and department managers."
• "Add a section to the SOP on 'Common Exceptions and How to Handle Them'."
• "What are the essential approval signatures required for this SOP to be considered official?"

18. Evaluating a new payroll provider

Scenario: Your company is growing, and you are considering switching to a new payroll software provider.

Potential follow-up prompts:

• "Generate a specific checklist for evaluating the data security and privacy compliance of a potential payroll vendor."
• "Outline a typical implementation plan for a new payroll system, including key phases and milestones."
• "What are three common 'red flags' to watch out for during a sales demo?"
• "List five key terms or clauses to look for in a payroll vendor's service level agreement (SLA)."

19. Troubleshooting a system error

Scenario: Your payroll software is producing a generic error message after a data import.

Potential follow-up prompts:

• "Provide a step-by-step troubleshooting process to isolate the specific error in the import file."
• "Draft a template for an 'Error Log' to track recurring system issues, their causes, and their resolutions."
• "What are the best practices for preparing a data file before importing it into a system to prevent these types of errors?"
• "Create a short guide for new HR users on how to avoid the top three most common data import errors."

20. Framework for new country expansion

Scenario: Your company plans to hire its first employee in a new country, and you need a high-level plan.

Potential follow-up prompts:

• "What are the pros and cons of using a local provider versus a global payroll partner (EOR vs PEO)?"
• "For each step in the framework, list the key internal stakeholders (e.g., Legal, HR, Finance, IT) who need to be involved."
• "Create a more detailed checklist specifically for the 'Statutory Requirements Research' phase."
• "Generate a list of discovery questions to ask a potential in-country payroll partner."

Tips for prompting AI for better outputs

A strong prompt turns vague responses into clear, detailed answers that save you time. Here are eight tips you can apply for better AI prompting:

Begin with clear action verbs: Start your prompt with a direct command. Clarity from the outset ensures focused responses.

• Vague: Tell me about social media
• Better: List five social media post ideas, summarize the benefits of social media calendars, or compare Instagram and TikTok demographics

Assign a persona: Specify who the AI should emulate to set the right tone and expertise.

• Vague: What’s a 401(k)?
• Better: As a financial advisor, explain a 401(k) to a 22-year-old starting their first job

Include essential context: Provide necessary background details to help the AI give relevant responses.

• Vague: Draft an email about the new project
• Better: Draft an email announcing Project A, our new CRM system, to the marketing team, including the launch date (August 1st) and a link to the training materials on our intranet

Specify format and structure: Clearly outline how the response should look.

• Vague: Give me interview questions
• Better: Provide five behavioral interview questions for a sales position in a markdown table with columns: 'Question,' 'Skill Tested,' and 'Ideal Answer Characteristics’

Provide examples (few-shot prompting): Give the AI examples to illustrate the exact style or format desired.

• Vague: Write marketing slogans for my coffee shop
• Better: Write three more coffee shop slogans matching this witty style: "Arise and grind”

Set clear constraints: Define boundaries to ensure concise, focused responses.

• Vague: Explain photosynthesis
• Better: Explain photosynthesis in under 100 words without scientific jargon

Request step-by-step thinking: For complex tasks, have the AI detail its reasoning clearly.

• Vague: Calculate project costs.
• Better: Calculate the project costs step-by-step, detailing materials, labor, and contingency before providing the total.

Iterate and refine: Think of AI interactions as conversations. Improve results with follow-up prompts.

• Initial: Draft a remote work policy
• Follow-up 1: Add an equipment reimbursement section
• Follow-up 2: Rephrase "Core Working Hours" to sound more flexible

Key considerations when using AI in payroll

Adopting AI for payroll brings significant benefits but also requires careful consideration. Here are key points payroll professionals should keep in mind:

Data privacy and security

Payroll data contains sensitive personal details and financial information, raising privacy concerns when using external AI services. Complying with regulations such as GDPR and CCPA is essential.

Teams can address these risks by using secure, enterprise-grade AI integrations, self-hosted AI models, anonymizing data, or partnering with vendors that meet robust data protection standards.

Learn more: 8 Critical Payroll Security Tips to Avoid Costly Data Breaches

Accuracy and potential errors

While AI tools rapidly generate valuable outputs, they aren’t immune to mistakes or "hallucinations"—convincing yet incorrect information. Payroll accuracy, especially around taxes or labor laws, is critical.

AI-generated content should always undergo human oversight and validation. Regular training of custom AI models with updated and trusted data sources also helps maintain accuracy.

Compliance complexity and human expertise

Payroll compliance involves nuanced interpretation and judgment beyond AI’s capabilities. Although AI can summarize regulations and provide quick insights, it shouldn’t replace human expertise.

Payroll teams should use AI as a starting point for research, while HR and legal professionals make final compliance decisions. By employing solutions that combine AI and an expert-validated knowledge base, you can enhance your team’s reliability.

See also: Generative AI in HR: How to Use It for Enhanced People Processes

System integration

AI is most effective when integrated directly into payroll systems. Without integration, AI responses can be too generic and require manual data input. Consider solutions offering embedded AI features within existing payroll software to securely and efficiently use specific payroll data. When integration isn't possible, using anonymized or aggregated data in AI queries can also mitigate privacy risks.

Addressing bias and ensuring fairness

AI models may reflect biases present in training data, potentially influencing payroll-related recommendations or communications. Payroll professionals should actively review AI outputs to make sure they’re aligned with their organization’s values around fairness, diversity, equity, and inclusion (DEI).

Treating AI-generated content as drafts for human refinement helps maintain standards and cultural alignment.

Training and continuous improvement

Custom AI tools and prompts require ongoing maintenance and training, particularly to adapt to new payroll scenarios or regulatory changes. By periodically updating your AI knowledge bases and refining prompts, you’ll can improve the outcomes. Consider assigning roles dedicated to managing AI quality, training processes, and ensuring data remains current and accurate.

See also: AI in Recruiting: What It’s Actually Doing Today and What It Could Unlock Tomorrow

Get an AI uplift with Deel

Deel’s built-in AI capabilities give payroll managers granular insights into your team, compliance requirements, and more:

• Automated payroll calculations and expense checks
• Automated contractor payments, invoice creation, and payslips
• Continuous compliance monitoring and flagging
• Instant, precise answers about payroll compliance, local employment laws, and team-specific data
• Round-the-clock support, freeing up valuable time by eliminating manual searches for answers
• Employee self-service, enabling workers to find information about payslips, time-off policies, and more

Deel AI is trained by our global network of legal, HR, and compliance experts. Built with robust privacy features, Deel AI ensures your organization's sensitive data stays confidential—never shared externally or used to train AI models. Seamless integration within Deel's platform and Slack means insights and reports are always right where you need them.

Interested in how Deel can support your payroll operations around the world? From the US to the South Africa and beyond, Deel Payroll has everything you need to run payroll your way.

Book a demo with a specialist to get a platform walkthrough.