How to prepare a payroll input checklist

People and dates

Start with who is being paid and from when. Changes to people and dates cause the largest errors, such as paying a leaver for a full month or missing a joiner entirely, so this section of the checklist comes first and closes first each month.

• New joiners with joining date, salary structure, bank details and statutory numbers.
• Leavers with last working day, notice status and settlement items.
• Transfers between branches, especially across states with different professional tax.
• Promotions and salary revisions with their effective dates.
• Employees on long leave, maternity leave or unpaid spells.
• Bank account changes, confirmed in writing by the employee.

Attendance, leave and overtime

These inputs come from the attendance and leave records, not from separate sheets. Payroll should read the closed month rather than accept numbers typed into a spreadsheet, which is where transposed digits and missed days creep in without anyone noticing.

• Attendance month closed, with corrections and penalties settled.
• Leave without pay and LOP days confirmed.
• Overtime approved for the month, within any cap.
• Leave encashment approved, with days and rate.
• Comp-off and holiday work recorded where it affects pay.

Variable pay, recoveries and statutory items

Variable items are where approvals get skipped. Each line should arrive with the approver's name and a date, so payroll is never the one deciding whether an incentive or a recovery is valid, and every figure can be traced later.

• Incentives, bonuses and commissions approved by the business head.
• Reimbursements approved for payment through payroll.
• Arrears for back-dated revisions, calculated month by month.
• Salary advance instalments and other recoveries under signed agreements.
• Fines or adjustments, only as the deductions rules allow.
• Professional tax state for each employee, and PF and ESI applicability for joiners.
• Income tax declarations and proofs, handled in your tax computation.

A sample input calendar

For a company paying on the 5th, a workable calendar is: attendance and leave closed on the first working day of the month, variable pay and recoveries sent to HR by the second, joiners' and leavers' details confirmed by the second, the payroll draft on the third, review and finalization on the fourth, and salaries credited on the fifth. Monthly wages must be paid by the 7th of the following month, so this leaves two days in hand. Name one owner for each input, such as the sales head for incentives and plant HR for overtime, and publish the calendar for the whole year.

Step by step

1. List every input by category. Write down every item that can change a payslip, grouped into people and dates, attendance, variable pay, recoveries and statutory items.
2. Name an owner for each input. Assign one person to provide each input, such as the sales head for incentives or plant HR for overtime, and a backup.
3. Set cut-off dates. Fix the date each input is due, working back from your pay date and the deadline of the 7th of the following month.
4. Collect inputs in one place. Receive inputs in a set format rather than scattered emails. In ZeniaHR, monthly payroll inputs are entered per employee as earnings, such as incentive or reimbursement, or deductions, such as advance recovery.
5. Tick off and chase. Track each input as received, checked or missing, and remind owners a day before the cut-off.
6. Match inputs to approvals. Check every variable amount against an approval with a name and a date before it enters the run.
7. Review gaps after each run. Note which inputs were late or wrong this month, and fix the cause with the owner before next month's run.

Frequently asked questions