HR head prepares the payroll, reviews it and MD approves it. Is the process fine?

I would like to know about the payroll process. In an organization where HR is a two-member team - the HR Manager and the HR Head - the HR Manager prepares the payroll for Executives and below, while the HR Head does so for Managers and above. For the payroll processing of Executives and below, a maker-checker process is followed, as the HR Head approves the payroll. However, for the payroll processing of Managers and above, there is an issue. The HR Head prepares the payroll, reviews it, and the Managing Director approves it.

Is the process fine? I would like to have your views and opinions.

Warm regards.

As long as confidentiality is maintained within the HR team, even the HR manager can process the entire payroll for both executives and managers. The HR head can then review and send it to the MD for final approval.

You can also follow the below pattern for payroll. Let the HR Manager process payroll for Executives and HR Head for Managers. Then you both can cross-check or do an audit of each other's payroll in case of any errors and then send the final file for the MD's approval. This will increase your accuracy percentage as well.

The first process mentioned here is the most common process of payroll.

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The first process mentioned here is the most common process of payroll.

Here's a sample of payroll in the Philippines: <a href="https://www.eezi.com/philippine-payroll-sample/">Payroll sample</a>

Additionally, employees are required to contribute 11% of their monthly salary to SSS, while employers match 7.37%, ensuring essential benefits for workers.

Hi,

The process you have mentioned, where the HR Head prepares and reviews the payroll and the MD gives final approval, is functional but not optimal in terms of internal control and risk mitigation.

From a best practice and audit standpoint, it's recommended to segregate the roles to ensure transparency and mitigate risks, errors, or fraud. Ideally, the payroll preparation, verification, and approval should involve at least two or three different roles:

HR/Admin

An HR administrator can prepare the payroll based on attendance, leaves, increments, etc.

Budget Analyst

A Budget Analyst can review calculations, statutory deductions, and disbursement readiness.

MD or Director

A managing director provides final approval for payout.

This kind of checks and balances system strengthens the organization's compliance and enhances credibility during audits.

If you're unsure about how to structure your payroll process or need compliance-ready HR systems and training for your team, I would recommend checking out SkillDeck. They offer specialized HR certification courses and consulting services that can help streamline payroll and HR operations while ensuring you meet all statutory and legal requirements.

Hope this helps! Let me know if you need a sample payroll process workflow.

Best regards,
Ranzil Rego
HR Consultant | SkillDeck