Workday Payroll MCP server

Workday Payroll is a cloud-based payroll management system that provides comprehensive solutions for payroll processing, compensation, benefits administration, and tax compliance. An AI agent with this MCP server can process payroll runs, calculate tax withholdings, manage employee deductions, handle garnishments, process year-end tax forms, and generate payroll analytics. Finance teams, payroll administrators, HR business partners, and compliance officers use this integration to manage employee compensation and ensure regulatory compliance.

Setting up an MCP server

This article covers the standard steps for creating an MCP server in AI Gateway and connecting it to an AI client. The steps are the same for every integration — application-specific details (API credentials, OAuth endpoints, and scopes) are covered in the individual application pages.

Before you begin

You'll need:

• Access to AI Gateway with permission to create MCP servers
• API credentials for the application you're connecting (see the relevant application page for what to collect)

Create an MCP server

Find the API in the catalog

1. Sign in to AI Gateway and select MCP Servers from the left navigation.
2. Select New MCP Server.
3. Search for the application you want to connect, then select it from the catalog.

Configure the server

1. Enter a Name for your server — something descriptive that identifies both the application and its purpose (for example, "Zendesk Support — Prod").
2. Enter a Description so your team knows what the server is for.
3. Set the Timeout value. 30 seconds works for most APIs; increase to 60 seconds for APIs that return large payloads.
4. Toggle Production mode on if this server will be used in a live workflow.
5. Select Next.

Configure authentication

Enter the authentication details for the application. This varies by service — see the Authentication section of the relevant application page for the specific credentials, OAuth URLs, and scopes to use.

Configure security

1. Set any Rate limits appropriate for your use case and the API's own limits.
2. Enable Logging if you want AI Gateway to record requests and responses for auditing.
3. Select Next.

Deploy

Review the summary, then select Deploy. AI Gateway provisions the server and provides a server URL you'll use when configuring your AI client.

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Connect to an AI client

Once your server is deployed, you'll need to add it to the AI client your team uses. Select your client for setup instructions:

• Claude Desktop
• Claude Code
• Cursor
• VS Code
• Windsurf

Tips

• You can create multiple MCP servers for the same application — for example, a read-only server for reporting agents and a read-write server for automation workflows.
• If you're unsure which OAuth scopes to request, start with the minimum read-only set and add write scopes only when needed. Most application pages include scope recommendations.
• You can edit a server's name, description, timeout, and security settings after deployment without redeploying.

Authentication

Workday Payroll uses OAuth 2.0 for secure authentication. You'll need to register an OAuth 2.0 client in Workday and create an Integration System User (ISU) with appropriate Payroll security groups. The OAuth endpoints follow this pattern: authorization at https://{tenant}.workday.com/ccx/oauth2/authorize and token retrieval at https://{tenant}.workday.com/ccx/oauth2/token. Provide your Client ID, Client Secret, and tenant name when setting up the MCP server. The standard scopes are read (read-only access), write (create and update payroll data), and admin (system configuration).

Available tools

The tools below enable AI agents to manage the complete payroll lifecycle: payroll processing, compensation management, benefits administration, time and attendance integration, tax calculations, garnishments, reporting, and year-end activities.

Payroll Processing

Tool	Description
Create payroll run	Initiate a new payroll cycle for processing
Read payroll run	Retrieve payroll run details and status
Update payroll run	Modify payroll run settings and status
List payroll runs	Retrieve all payroll runs by date or status
Validate payroll	Check payroll calculations and validate data
Post payroll	Post approved payroll to the general ledger
Create payroll reversal	Reverse a previously posted payroll run
Generate direct deposit file	Create a file for bank processing
Create paycheck	Generate individual paychecks

Compensation Management

Tool	Description
Create salary change	Process a salary increase or adjustment
Read compensation	Get employee compensation details and history
Update compensation	Modify salary and compensation components
List compensation records	Retrieve compensation by employee or date
Create bonus payment	Process a bonus or incentive payment
Read bonus	Get bonus calculation and payment details
List bonuses	Retrieve bonuses by employee or period
Create special payment	Add one-time payments to payroll
Create earnings statement	Generate a statement of earnings for an employee

Benefits Administration

Tool	Description
Create benefit enrollment	Enroll an employee in a benefits plan
Read benefit enrollment	Get enrollment details and coverage information
Update benefit enrollment	Modify benefits selections and dependents
List benefit enrollments	Retrieve enrollments by employee or plan
Calculate deductions	Compute benefit deductions for a payroll run
Update contribution	Modify 401(k) or deduction percentages
Create life event	Process a qualifying life event for benefits
Generate benefits report	Create a benefits enrollment or utilization report

Time and Attendance

Tool	Description
Import timesheets	Load time data for payroll processing
Create time entry	Submit time worked for an employee
Read time entry	Get time entry and approval details
Update time entry	Modify and correct time records
Calculate overtime	Compute overtime hours and pay
Create absence deduction	Process unpaid leave deductions
Calculate accruals	Compute sick time and PTO accruals
Generate time summary	Create an attendance report

Tax Management

Tool	Description
Calculate tax withholding	Compute federal and state income tax
Update tax election	Modify employee tax withholding elections
Calculate employer tax	Compute employer tax obligations
Generate tax report	Create quarterly or annual tax reports
Create W-2 form	Generate a W-2 for year-end
Create 1099 form	Generate a 1099 for contractors
Submit tax filing	File taxes electronically
Generate tax reconciliation	Reconcile tax amounts with filings

Garnishments and Deductions

Tool	Description
Create garnishment	Set up a wage garnishment order
Read garnishment	Get garnishment details and payment history
Update garnishment	Modify garnishment amounts and status
Calculate garnishment	Compute garnishment deductions
List garnishments	Retrieve garnishments by employee or agency
Generate remittance report	Create a garnishment payment report
Process garnishment payment	Execute a garnishment payment to agency

Payroll Reporting

Tool	Description
Create payroll register	Generate a payroll summary report
Generate earnings statement	Create earnings data by employee
Create labor cost report	Analyze payroll costs by department
Generate payroll summary	Create summary payroll data
Create tax liability report	Generate quarterly tax liability
Generate W-2 summary	Create year-end W-2 data
Generate compliance report	Create FLSA, ACA, or EEO-1 data
Generate audit trail	Create a transaction history report

Year-End Processing

Tool	Description
Generate W-2 forms	Create W-2s for all employees
Validate W-2 data	Verify W-2 accuracy before submission
Process W-2 correction	Create corrected W-2 documents
Submit W-2 forms	File W-2s electronically to SSA
Create 1095-C form	Generate ACA reporting forms
Generate tax forms	Create state-specific tax forms
Process year-end close	Complete year-end payroll activities

Tips

Use minimum required scopes for security — separate ISUs for different integrations reduce the risk of over-privileged access and improve audit trail tracking.

Validate payroll before posting — always run validation checks on payroll runs before posting them to the general ledger to catch calculation errors early.

Monitor tax rate updates to ensure tax configuration is kept current with the latest federal, state, and local tax rates to prevent incorrect withholdings.

Automate time import by integrating time tracking systems with payroll to automatically pull time data and reduce manual entry errors.

Plan for year-end early — begin W-2 and tax form preparation well ahead of deadlines to allow time for corrections and verification.