How to Run Payroll from Attendance Data: Step by Step

When payroll reads attendance directly, each person's salary depends on the days they actually worked, not on a spreadsheet someone typed at month end. The link needs discipline: attendance must be closed before payroll reads it, paid days must follow written rules, and every other input must arrive before the run. This guide walks through the flow from punches to payslips, with a worked example for one employee and the checks to make at each stage.

From punches to paid days

Punches become paid days in three steps. First, each day is graded as a full day, half day, absence, weekly off, holiday or leave, using the shift, grace, break and late mark rules. Second, the month's grades are totalled into paid days: days worked plus paid leave, paid weekly offs and paid holidays, minus penalty days. Third, the month is closed, so paid days cannot change while payroll runs. Skip any of these steps and payroll ends up paying from figures that are still moving.

Worked example: one employee's month

Pradeep, a warehouse associate in Bhiwandi, has a monthly gross of ₹23,400, paid on a 26-day basis. In September 2026 his attendance shows 23 full days worked, 1 half day, 1 day of casual leave, 1 day of leave without pay and 4 paid Sunday offs. His LOP is 1 day of leave without pay plus 0.5 for the half day, so 1.5 days. Salary = ₹23,400 minus 1.5 x (₹23,400 / 26) = ₹23,400 minus 1.5 x ₹900 = ₹22,050. His company's overtime rate is based on the same daily rate: ₹900 / 8 = ₹112.50 an hour, paid at twice that. His 8 approved overtime hours add 8 x ₹225 = ₹1,800, so his gross earnings for the month are ₹23,850. PF, ESI and professional tax are then worked out on those earnings.

Inputs that do not come from attendance

Attendance gives paid days and overtime, but a payroll run needs more. Collect the other inputs against a cut-off date, each with an owner and an approval, so the run does not wait on a late incentive sheet or a missing bank account.

Joiners and leavers, with their dates.
Salary revisions and any arrears from back-dated changes.
Incentives, bonuses and reimbursements approved for the month.
Leave encashment, where approved.
Recoveries: salary advance instalments, fines under the rules and adjustments.
Bank account changes and statutory details for joiners.

Draft, review, finalize, pay

Run payroll as a draft first. Review it against last month: headcount, total gross, total deductions and net pay, plus every employee whose net pay changed by more than a set threshold, such as 10 percent. Explain each large change before finalizing. Once finalized, lock the run so nobody edits it quietly, issue payslips and release the bank transfer. Monthly wages must be paid by the 7th of the following month under the wage payment rules, so plan the review to finish with time to spare.

Step by step

Close the attendance month. Clear corrections, leave and overtime approvals, review penalties and close the month. In ZeniaHR, month close finalizes attendance and freezes it for payroll, and the monthly payable days feed Direct Payroll.
Collect the other inputs. Gather joiners, leavers, revisions, incentives, reimbursements, encashment and recoveries against a cut-off date, each with an owner and an approval on record.
Create the draft run. Run payroll in draft. In ZeniaHR, paid days come from the finalized attendance month, with a manual override where needed, bounded by joining and exit dates.
Review against last month. Compare totals and flag employees whose net pay moved by more than your threshold. Explain each one before moving on.
Check statutory deductions. Confirm PF, ESI and professional tax on earned wages. ZeniaHR works out employee PF, ESI and state professional tax, plus employer PF and ESI, in the run.
Finalize and issue payslips. Finalize the run so it cannot be edited, then issue payslips. In ZeniaHR, finalized runs are sealed and read-only, with a payslip PDF for every employee.
Pay and record. Release the bank transfer, confirm the credits and follow up any failed transfer the same day, before employees start calling.

Payroll Attendance

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Frequently asked questions

How does attendance affect payroll?

Attendance decides paid days: days worked plus paid leave, weekly offs and holidays, minus leave without pay, unapproved absence and penalty days. Payroll multiplies the per day salary by those days and adds approved overtime. That is why attendance must be closed before payroll runs, so paid days do not change underneath it.

What are paid days in payroll?

Paid days are the days in the month an employee is paid for. They include days worked, paid leave, paid weekly offs and holidays, and exclude leave without pay, unapproved absence and penalty days. For a joiner or leaver, only days within the employment dates count toward paid days.

Can payroll be run before attendance is closed?

It can be drafted, but it should not be finalized. If you must start early, run a draft, then rerun it once attendance is closed and compare the two. Finalizing on open attendance turns late corrections into arrears and recoveries next month, which employees find much harder to follow.

What should be checked before finalizing payroll?

Compare headcount, gross, deductions and net pay with last month, and explain every employee whose net pay changed by more than your threshold. Check joiners, leavers, LOP, overtime, arrears and recoveries, and confirm statutory deductions on earned wages. Then finalize, lock the run and issue payslips.