1. Keep the employee master updated
Start with an accurate employee master containing the employee ID, name, joining date, designation, department and other fields required for payroll administration.
Review additions, exits, transfers and changes before each payroll cycle so the payroll population matches the current workforce.
- New joiners and joining dates
- Employees who exited or became inactive
- Designation or department changes
- Bank and contact details where applicable
2. Review salary profiles and attendance inputs
Payroll calculations depend on the salary structure and monthly inputs configured for each employee. Attendance, leave, overtime, incentives, deductions and other approved inputs should be checked before processing.
Keep an audit trail for changes so the person reviewing payroll can understand why a monthly amount differs from the previous cycle.
- Salary structure and effective date
- Attendance and leave inputs
- Overtime, incentives or approved variable pay
- Recoveries, deductions and other authorized inputs
3. Verify applicable statutory settings
Statutory deductions and employer contributions depend on the employee profile, establishment and current applicable rules. Review the settings rather than assuming the same treatment applies to every employee.
Where applicability is uncertain, confirm the current requirement with the appropriate professional or authority before final payroll processing.
- PF applicability and settings where applicable
- ESI applicability and settings where applicable
- Professional tax or other state-specific deductions where applicable
- Other payroll or tax settings relevant to the employer
4. Run a payroll review before finalization
A review should compare employee counts, gross pay, deductions and net pay with expected monthly inputs. Investigate unusual changes before the payroll is finalized.
Once payroll is finalized, generate salary slips and retain the records required under the employer's process and applicable requirements.
- Employee count reconciliation
- Gross-to-net review
- Exception or unusually high/low amount review
- Final approval and salary slip generation
Frequently asked questions
How often should payroll be reviewed?
Payroll is normally reviewed for each pay cycle. Monthly payroll teams should complete the review before finalization and payment.
Should every employee have the same statutory deductions?
No. Applicability can depend on employee and establishment details and the current rules. Payroll settings should be verified for each applicable category.
What should employers do when payroll inputs are missing?
Hold the affected input for review, document the missing information and obtain the required approval or data before finalizing payroll.