A monthly payroll runbook for small companies

Payroll goes wrong for boring reasons. A resignation processed after the cutoff, a reimbursement slipped in at the last minute, an attendance correction nobody applied. The fix is not heroics on the 30th; it is a runbook you follow the same way every month.

Here is the one we recommend to companies with 10 to 200 employees. Adjust the dates to your pay cycle, but keep the sequence.

Set a cutoff and defend it

Pick a date, usually the 20th to the 25th, after which no new inputs enter the current month's payroll. Anything that arrives later goes into next month as an arrear or adjustment. Write this down, announce it once a quarter, and do not make exceptions for anyone senior. One exception becomes ten, and ten exceptions become a payroll you cannot reconcile.

Collect inputs before the cutoff

By the cutoff you need, at minimum:

• Attendance and leave data, with loss-of-pay days confirmed. If leave and attendance live in the same system as payroll, this is a report, not a spreadsheet hunt.
• New joiners: date of joining, salary structure, bank account, PAN, PF and ESI details.
• Exits: last working day, notice recovery, leave encashment, full and final components.
• One-time payments: incentives, bonuses, referral awards, approved expense reimbursements.
• Salary revisions effective this month, with the approval attached.
• Verified tax declarations, so TDS is computed on amounts you can defend, not on promises.

Run pre-checks before you compute

Before running anything, check the inputs themselves. Missing bank accounts, missing PAN, employees with zero attendance, negative net pay, a salary revision without an effective date. Catching these before the run saves you from catching them in an employee's angry message on the 1st. ZekoHR runs these as automated pre-flight checks on every draft run; if you are on spreadsheets, keep a written checklist and tick it every month. The payroll feature page lists the checks we run if you want a starting point for your own list.

Run in draft, then verify

Compute payroll as a draft first. Then verify, and verify means comparing, not admiring:

1. Compare headcount and gross totals against last month. Investigate any difference you cannot name.
2. Spot-check five payslips end to end: one new joiner, one exit, one person with loss of pay, one with a revision, one ordinary case.
3. Check statutory totals: PF, ESI, professional tax, TDS. Sudden jumps usually mean a structure or declaration change you forgot about.

If something is wrong, fix the input and rerun the draft. Never hand-edit an output number; the correction disappears next month and the error returns.

Finalize, publish, pay

Only after verification do you finalize. Finalizing locks the numbers; publishing releases payslips to employees. Keep these as separate steps so you can finalize on the 28th, get bank files ready, and publish payslips on payday rather than before the money moves. In ZekoHR this is an explicit draft, finalize, publish flow with rollback, so a mistake caught after finalizing is recoverable without spreadsheet surgery. The run payroll guide walks through each step.

Generate the bank transfer file from the finalized run, get it approved by whoever holds payment authority, and pay on the promised date. Paying a day late costs you more trust than any feature earns back.

Close the month with records

After payment, file away: the finalized register, the bank confirmation, challans for PF, ESI, professional tax and TDS as you deposit them, and any approvals for one-time payments. Statutory deposits have their own due dates in the following month; put them in a recurring calendar, not in someone's memory.

Employees should be able to pull their own payslips without emailing anyone; that is what self-service payslips are for, and it removes a surprising amount of monthly noise.

A runbook is dull by design. Follow it for three months and payroll stops being an event. That is the goal.