Payroll is more than transferring salary to employees. A reliable payroll process connects employment records, attendance or approved pay inputs, gross salary, deductions, employer obligations, net payment and the accounting ledger.
Keep an employee master file
Maintain the employee’s joining date, role, salary terms, bank details, tax information, approved benefits and changes in compensation. Payroll should not depend on informal chat messages from month to month.
Build a gross-to-net calculation
Start from approved salary and benefits, then show each deduction separately. The net amount transferred to the employee should reconcile exactly to the payroll sheet.
Review payroll tax and withholding
Employment income and other payroll items can have tax consequences that vary by fiscal year and employee circumstances. Use the current IRD rates and rules rather than a copied historical spreadsheet.
Post payroll to the accounts correctly
Salary expense, employee deductions, employer contributions, advances and payable balances should be posted to the right accounts. Unreconciled payroll liabilities are a common year-end problem.
Monthly payroll checklist
- Approve additions, resignations and salary changes.
- Finalize attendance/leave/variable-pay inputs.
- Prepare payroll and review it independently.
- Process salary payment.
- File or deposit required deductions.
- Reconcile payroll to bank and ledger.
- Store payslips and supporting records securely.
Official sources & further reading
Need help applying this to your business?
General guidance is useful for understanding the issue. Your actual records, registrations and circumstances may require a different treatment.