Curious About Payroll Management? Seeking Insights on What It Involves and How to Excel in HR

Hi,

I would be very grateful if any one of you could give me details of payroll management. What all is included in this, and much more information on how to work in this side of HR.

Sirisha Reddy

Hi Sirisha,

Payroll is the salary processing system.

Payroll can be seen from two aspects: one from the HR side and the other from the commercial people's side. The HR personnel process the payroll by sending attendance details or, more precisely, Leave Without Pay (LWP) details, and other comprehensive information that an employee is entitled to receive in a particular month.

After receiving these details, the commercial team initiates the entry into the payroll software, marking the beginning of the salary processing.

While processing the salary for a specific month, we, the HR staff, provide complete LWP details to the commercial department.

When calculating LWP, we prepare the attendance sheet, including the weekly offs. Besides the weekly offs, we assess the number of days an employee is absent, and out of those days, how many were on leave, which we crosscheck with the leave applications. If an employee has submitted an approved leave application and has sufficient leave balance, we mark them as on leave.

However, if an employee has not submitted a leave application or lacks sufficient leave balance, they will be considered absent for that day, leading to a deduction in their salary.

Similarly, if there is a provision to provide one day's extra salary for a specific day if the employee comes to work, we calculate the additional day's salary for those employees present on that day.

I hope this explanation clarifies the process for you.

Regards,

Amit Seth

I agree with Amit that attendance and LOP are major factors in payroll.

The advantages of software payroll compared to manual processing are:

1. Manual data entry and calculations with the calculator are eliminated.
2. Employee data is entered once, and any changes such as increments, promotions, demotions, etc., are updated accordingly.
3. Monthly inputs involve entering the number of days for salary calculation in cases of LOP or absenteeism only. In instances of full attendance where full salary is payable, the system automatically calculates the salary without the need for manual input.
4. Various allowances as per the packages are calculated, and all deductions are also computed. The system delivers the net salary payable, including complex allowances like HRA for a full month in case of LOP.
5. It generates pay slips and bank statements.
6. Compliance with statutory returns and records is also handled.

S. Srikumar
Bangalore

Hi,

The input given by our members Shrikumar & Amit is very correct. The Payroll is a department which generates salaries and calculates taxes for all the employees in the organization. The HR and payroll work hand in hand. The salary information is provided by HR to the payroll department according to the cut-off date. The information includes details on Leave Without Pay (LWP), new joiners, increments, promotions, transfers, internal company transfers, bank account numbers, salary on hold notifications when an employee resigns, and any other necessary details. The tax-related tasks such as tax declaration forms and Form 16 are handled by the payroll department.

Once the information is submitted to the payroll department, they perform data entry, verification, and then process the salaries. Based on fund availability, salaries are released to individual salary accounts by the first week of the month. I hope this explanation helps you understand the process.

Thanks,
Uttama

My query is, how to rectify the decimal problem from payroll because it gives amount difference between what we prepare and what we transfer to the bank account. Please help.

Regards,
Anu