Pre-Payroll Activities

Step 1: Defining payroll policy: The first step is wherein the policies to the bank during the payroll processes need to be established. These policies need to be approved by the management to turn these policies into standards. Policies like the Pay policy, Attendance policy, leave and benefits policy, and more.

Step 2: Gathering inputs: At this stage, the inputs are gathered from various departments to ensure the accurate calculation of the payroll.

Step 3: Input validation: Once the data has been collected, it is crucial to confirm its accuracy because even the smallest error could completely sabotage the payroll process.Make sure the list only contains active employees and does not contain any information of inactive workers. examining the data to see if it complies with business rules. Make sure the presentation is done correctly.

Step 4: Payroll Calculation: At this step, the payroll system receives the input data that has been verified in preparation for processing actual payroll. After adjusting for appropriate taxes and other deductions, the outcome is the Net pay.
To prevent further errors, it is always preferable to reconcile the figures and check the accuracy after the payroll process is complete.

Post- Payroll Activities

Step 1: Statutory compliance: The payroll administrator must strictly follow all legal requirements. Several statutory deductions, including EPF, TDS, and ESI, are taken during the processing of payroll.The appropriate authorities or government entities are then given these deductions.

Step 2: Payroll accounting: Every organization is required to maintain an accurate book of accounts and the salary that is paid for one of the significant entries in the books of accounts.

Step 3: Payout: After following the aforementioned procedures, salaries can ultimately be paid in cash, checks, or bank transfers. It is preferable to establish employee salary accounts for smooth transfers.

Step 4: Report: The final step is to compile a report, and it’s important to do so accurately so that it includes data like personnel costs by department or region.