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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
A monthly payroll close is mostly the same every month. The errors come from the parts that change: a joiner after cut-off, a revised salary, attendance regularised late, a deduction someone asked for in a message. A fixed checklist exists so that the changes are handled the same way every time.
This guide is for the recurring monthly run. The first payroll run guide covers the one-off case of moving into a new system.
01
Set a cut-off date for each type of input and publish it. After cut-off, late changes either go into next month as arrears or adjustments, or are accepted only with an approval that is recorded.
Watch for itPending leave and regularisation approvals at cut-off become loss-of-pay days by default. Chase managers before the cut-off, not after the payslips go out.
02
Run payroll, then compare it with the previous month employee by employee. Every difference should have a reason in the month's inputs: a joiner, an exit, a revision, LOP, overtime, arrears.
Review the statutory outputs separately. Check employees near the ESI wage threshold, anyone whose PF wage changed, and PT for employees who moved state. Look at TDS for anyone whose deduction moved sharply, usually caused by a new declaration or a revision.
03
Send a summary for approval: headcount, gross, deductions, net, employer cost, and a list of the month's exceptions. The approver should be someone other than the person who processed the run.
Generate the bank file from the approved run, and confirm the file total equals the approved net pay before it is uploaded. Release payslips once salaries are credited.
04
Deposit each statutory deduction with its authority and file the return by the due date. The due dates are set by each law and its rules and can be revised, so keep a compliance calendar and check it each month rather than relying on memory.
05
Once paid and filed, lock the period. Corrections go into a later month as identified adjustments, so the locked month continues to match what was paid and filed.
Post the payroll journal to the books and reconcile it. The payroll reconciliation guide covers that step in detail.
Every guide ends here rather than in a summary. If a line below is not true yet, that is the next thing to do.
Input cut-off, joiners and exits, revisions, approved attendance and leave, variable pay, a variance review against last month, approval, bank file check, statutory deposits and returns, and locking the period.
They are processed next month as arrears or adjustments, or accepted late only with a recorded approval. The rule should be the same every month.
Most errors show up as an unexplained change. If every difference between months has a reason in the inputs, the run is very likely correct.
Someone other than the person who processed it, usually in finance or a senior HR role, using a summary that lists the month's exceptions.
The checklist above is generic by necessity. Bring your own structures, states and rota and we will tell you which lines are already true and which are not.
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