Payroll is a monthly process and needs a fair amount of data inputs from various
sources for it to give out accurate and timely inputs. In this article an overview
of the process and some key concepts have been explained.
Payroll Frequency and Payroll Period
Payroll is designed to be run on a monthly basis – there is no predefined date
but ideally it should be run between 28th of the month and 4th of the next month.
Payroll is always run for the period between 1st of the month till the last working
day, if it is run before the last working day it assumes that the employee is
present for the remaining days and processes accordingly. There are two parameters
in setup which can be used to prevent data from beyond the cut off date from
being considered in payroll -
1. Reimbursement cutoff date : employees cannot submit payroll reimbursements
after this data. Payroll should be run after this date but there is no check
in the system and you can do a trial run before also
2. Leave cutoff date : leaves or attendance date after this date is not considered
in current month's payroll, process will be run assuming that employees are present
after the cut off date
Running Partial Payroll
Although the software allows the Payroll Manager to exclude employees while running
a payroll it is not advised to do so as the statutory compliance have to be paid
within a timeline. If due to any reason the employee is not to be paid the correct
method is to hold his payment and not excluding him from payroll.
Data Completeness
Before payroll for any employee can be run the software ensures that the employee's
salary structure is in place, any pending declarations like rent, tax are approved.
Attendance and Leave Without Pay data comes from Leave and Attendance module.
There are multiple methods of sending out reminders to HR / Managers and Employees
and of linking missing attendance to salary deductions.
Handling Negative Salary
Salary in month can become negative due to following reasons -
- Loan / Salary advances being recovered
- TDS recovery is high due to lesser recovery in previous months
- Working days are less due to excessive leave without pay
- Salary has been reduced from a back date and arrears are being recovered
Negative salary is automatically recovered in subsequent payrolls or full and
final. The impact of negative salary is not shown in the salary register or might
not be visible on the salary slip also but the salary payment advice will show
a figure net of negative salary if negative salary is being recovered. There
are reports available which show the summary of negative salary pending for recovery
or breakup of months in which it has been recovered.
Payroll steps
Monthly payroll processing
Full and Final / Post Separation Payouts
Employee's full and final can be done and payments can be done to them even after
full and final has been processed
1. Full and Final processing
2. Post separation payments
Other processes
Reports can be accessed from Payroll Reports section.
Dividing payroll activities between multiple employees
Payroll activities can be divided between the following roles - Payroll Manager, Payroll Executive, Account Head, Accountant, HR Manager, HR Executive. Each of these roles can be mapped to different set of activities as per the table given below. Some activities are to be done at a company level and hence cannot be assigned to any role which is mapped to a Department or Location.