Here's a quick check list of 11 important activities that you should do every month before hitting the ‘Run Payroll’ button so that you don’t miss out anything and always get accurate payroll calculations. You can skip things that are not applicable to you.
1. Update leave encashment amount – If you want to pay amount for encashment of leaves to employees, you’ll need to update leave encashment amount.
2. Update increments in salary of employees – If there has been an increase or decrease in salary of employees, please update it so that the revised salary is taken for payment and not the old one. If there is no change in salary, you can skip this step
3. Lock Income Tax declarations – You’ll need to lock income tax declarations so that employees won’t be able to make changes in tax declarations at the last minute and only the amount approved by you would be taken for tax deduction.
4. Update status of employees whose salaries need to be kept on hold – If you don’t want to pay salaries to some employees, such as those who have resigned or have gone for company funded studies, in a month, update the pay status against them as ‘on hold’ so that their names don’t appear in bank statements. Click Here to see the steps of doing stop/release payment
5. Update status of all resigned employees – If an employee has resigned, please update his working status as ‘resigned’ along with his last working day so that the salary for the last month is calculated on prorated basis.
6. Update details of employees who have joined the company – Update all details such as name, date of joining, CTC, bank account no., etc. for new joinees so that they are considered for payroll run and their salary can be calculated by the system. You’ll also need to calculate arrears for new joinees.
7. Update loans – If employees have taken a loan and if you want to deduct more or less amount for recovery of loan in a given month, instead of standard deduction, please update those details. Otherwise, the standard loan recovery amount will get deducted, if applicable.
8. Update overtime – If you have an overtime policy and pay extra salary when employees work for extended hours, you’ll need to update the overtime units for the month.
9. Update pending claims submitted by employees – Update all pending claims for leaves, reimbursements and flexible benefits plan submitted by employees from their employee portal.
10.Update changes in data of employees – If there is any change in designation, location, confirmation status, or any other similar information of employees, please update it so that the system takes updated values for payroll run.
11. Loss Of Pay (LOP) Reversals - If you have deducted more or less salary for leave without pay in previous month, you’ll need to correct it in this month’s payroll.