From calculation to payment in one smooth workflow
Payroll processing is the series of steps that transforms employee work into actual payment. It involves calculating earnings, applying deductions, generating payslips, disbursing funds, and submitting statutory contributions. Understanding this process helps you ensure accurate and timely payments every pay cycle.
The Payroll Processing Cycle
A typical payroll cycle follows these steps:
- Gather Information including attendance, overtime, leave, and any changes to employee compensation.
- Calculate Earnings by adding base salary, allowances, overtime pay, and any bonuses or commissions.
- Apply Deductions for statutory contributions, insurance, loans, and other withholdings.
- Calculate Employer Contributions based on local requirements.
- Generate Payslips documenting all earnings, deductions, and net pay for each employee.
- Disburse Payments via bank transfer or cash to employees.
- Submit Contributions to relevant authorities.
- Maintain Records for compliance, audits, and future reference.
Key Dates in the Payroll Calendar
Payroll processing involves deadlines that vary by region. Common considerations include:
- Salary Payment deadlines based on your local employment laws.
- Statutory Contributions with their own submission due dates.
- Tax Submissions for income reporting to tax authorities.
Payroll Inputs
Before processing payroll, you need to gather:
- Employee Records with current salary, allowances, and deductions.
- Attendance Data if pay depends on hours or days worked.
- Overtime Records for employees eligible for overtime pay.
- Leave Records to account for unpaid leave or leave encashment.
- Changes such as salary adjustments, new hires, or terminations.
Payroll Outputs
After processing, payroll produces:
- Payslips for each employee showing earnings and deductions breakdown.
- Bank Files for bulk salary transfers to employee accounts.
- Contribution Files for submission to relevant authorities.
- Reports summarizing payroll costs, contributions, and other metrics.
How Officaid Simplifies Payroll Processing
Officaid streamlines the entire payroll process:
- Automatic Calculations pull salary, allowances, and deductions from employee profiles.
- Contribution Rates are applied automatically based on employee details.
- Bulk Processing lets you process payroll for your entire team at once.
- Bank File Generation creates files compatible with major banks.
- Direct Submission via API integration where available.
Frequently Asked Questions
Gross pay is the total amount earned before any deductions, including base salary, allowances, overtime, and bonuses. Net pay is what the employee actually receives after all deductions (such as statutory contributions and other withholdings) are subtracted from gross pay.
Employer contributions are amounts your business pays on top of the employee's salary. These typically include statutory contributions like pension or provident fund payments, and may also include levies or insurance premiums depending on your region. These costs don't appear on the employee's payslip as deductions since they come from the employer, not the employee's earnings.
Bulk payroll processing in the Payroll module runs on a monthly basis. If you need to create payslips for different pay periods (such as bi-weekly or weekly cycles), you can add them directly from the employee's profile in Team → Directory under the Payslips section. See Adding a Payslip for details.
What's Next?
Continue learning about payroll:
- Processing Payroll walks through processing payroll in Officaid step by step.
- Payroll Statuses Explained covers the different stages of the payroll lifecycle.
- What is Payroll provides foundational knowledge about payroll.