Feb 28, 2022


Payroll is one of the most fundamental units of a business and payroll helps in the sustainability of a business.  In this blog, we will talk about the basic guide on what is payroll and what are the steps involved in the payroll deployment process.  While this process may be different for various payroll service providers for hire in India, they are mostly the same for the most reputed payroll deployment specialists.

Pre-payroll activities – These are the activities that have to be fulfilled before starting the payroll process and these are the foundation blocks for the payroll services.

  • Payroll policy – This is when the payroll companies will need to determine the company’s policies on leaves, benefits, incentives as well as other pay policies that they have implemented.  This is the basis on which the payroll service will operate on that company.
  • Input gathering- While the payroll policy is what the client company wants the payroll company to enact, input gathering is the actual data that the company will provide regarding employee numbers and their designations and their pay packages as well as any bonus is any of them will receive along with overtime money and other penalties.
  • Validation –  This is the part where the payroll company will validate the data as well as the client company’s payroll policy with company executives to make sure that you are not missing out on any employee or that your input data is correct.

Payroll activities – This is the main sequence of events in which the actual payroll will be determined.

  • Calculation – This is the most important part of the payroll process and this is why hire companies have been brought in to make it easier to calculate payroll and deploy it.  The calculation involves calculating the payroll and adding or subtracting values according to incentives and penalties.  Calculating also involves verifying the result data and analysing the input data so that there is no mistake in calculation.  Any mistake in payroll calculation can spell disaster for a company.

Post payroll process – This is the process in which the work of calculations in all other inputs have been done and the actual payroll deployment takes place.

  • Compliance – Compliance is making sure that everything from the provident fund to TDS as well as gratuity and everything is maintained as well as making sure that all the taxes are in order so that the company does not get any fines from the revenue departments.
  • Pay-out – Payout involves the actual payment of the employee salaries and this can be done through cash cheque or bank transfer and any other mode the employee has agreed on and this can be done after making sure that the company salary bank account has enough funds to make the payroll deployment. The best payroll service providers do this with sophisticated software that makes it as easy as clicking a button.
  • Reporting – This is when all the payroll has been deployed and the payroll service providing company needs to provide a report of employee records such as the total cost of payroll spend as well as a department-wise spend and other statistical data that may come in handy to the company.

So, this was the basic guide to payroll and if you are someone who months to do their payroll then you can take inspiration from this blog and start your payroll for your company, but as you can see from the blog, it is complicated and any mistake can tarnish the reputation of the company so the best-case scenario for me would be to hire a payroll outsourcing company for all your payroll needs such as finding any reputable payroll management service provider for hire in India.