Who Handles Payroll Processing: Is It Accounts or HR? Let's Discuss the Breakdown

Dear All,

I need to understand who is responsible for Payroll processing - Accounts or HR. What part is handled by Accounts and HR.

Thanks,
Sarika

Hi,

HR is responsible for payroll, and accounts are responsible for the payment of dues as per the paysheet validated by HR to employees. Most of the time, there is an outside agency involved that handles payroll and statutory compliances. HR sends leave and attendance data to the agency and gets processed payroll with all statutory dues paid to authorities by the agency on behalf of the client. Payroll received from the agency is validated and sent to accounts either by HR or by the agency directly.

Regards,
Kishore

Hi Sarika,

This is indeed the most important function that HR needs to handle in sync with the Finance department. While HR determines the pay and provides the data to finance, Finance comes into the picture for payment and taxation purposes. Finance may also act as an advisor to decide which components of the salary may be beneficial in terms of tax-saving, auditing, ease of deployment, etc., for the organization and for the employees.

Regards,
Pooja

Hi Kishore & Pooja,

I am also having the same doubts that Sarika is having. But from your reply, my doubts have been cleared to a certain extent. I am still confused about whether it is HR's responsibility to prepare the payroll every month after fixing the salary and providing all the details to the finance department, or if Finance will handle this task. HR collects all the data for payroll, and Finance processes it.

If I am mistaken, please clarify.

Thanks & Regards,
A Renu

Hi Renu,

It is the responsibility of the HR department to process the payroll because all the details of leave and timesheets are with the HR people. Therefore, it is the duty of HR to handle the payroll.

Regarding the payment, the Finance department has to take care of it due to the different fringe benefits and salary packages that organizations nowadays offer to suit the employees. At the same time, the employees have to file their returns as it is mandatory for the employer to deduct taxes from the employees' salary.

I hope this clears any doubts you may have.

Thanks,

K. Hari

Dear Friend,

Payroll processing responsibility is totally concerning HR Department. However, items like debits, loans, and advances must be forwarded from the Accounts Department. Please make sure of this while processing payroll.

Regards,
ac_prabha