Functions of Payroll Management

Payroll is defined as the total payment a business must pay to its employees for a given period. The act of managing employee payments based on employee type, status, salary, and wages is known as payroll processing.

Who handles the payroll process in companies?

  • Human resource department
  • Accounts department
  • The owner (in small business)
  • Outsourced to a specialist
  • Specialized software

Payroll processing steps:

Data Validation

To ensure a relevant payroll under changing requirements, the authorized person must keep himself up to date. During onboarding, common errors like employee misclassifications occur, affecting your employees’ health insurance, retirement benefits, and tax withholdings. Always include a checkpoint before your first payroll to ensure that the employee classification is correct, as well as the individual’s personal information and tax code are valid.

Time Management

Timesheets checks for irregularities in employee type, hours worked, and pay grade. It helps to keep track of how much time you spend on different projects or activities. The data is recorded and transferred to payroll, which is used to determine attendance days, overtime, and leave management.

Statutory Compliances

All mandatory deductions, such as EPF, TDS, and ESI, are deducted at the time of payroll processing. Then the organization sends the money to the appropriate government entities and also provides a pay slip that includes the information on Salary, Deductions and Hours worked for that pay period.


Once the payroll for a specific month is completed the finance and top management teams may request reports such as department-wise employee costs, location-wise employee costs, and so on. Pay, perks, and deductions for your employees must all be included in the annual report. Your policies must be well-defined and recorded so that they may be followed by anyone.

Payroll Technologies

Software is used to reduce the amount of time it takes to collect data. There are software solutions that reduce the need for human payroll data entry by combining automation, smart data, and networking. This can assist you in producing reports fast, reducing errors, and ensuring compliance. Advanced payroll management software is available on the market that not only automates payroll computation but also functions as a leave and attendance management system, HR management system, and employee self-service portal. A modern payroll software solution can let you focus on strategic ways that the HR function can assist the business to expand by simplifying your payroll procedures. Appropriate software can be chosen for your business based on the size of your company.

Functions of Payroll Management