A single mistake in a payroll task can destroy your whole calculation so a payroll office strictly trains to do exact planning. The payroll processes are truly based on proper attention and a constant need to monitor every change to with holdings, contribution to social security fund, and so forth. 


How do payroll systems run? Well, the answer is pretty easy. The entire functionality of payroll runs according to three stages that we will discuss in this blog, so let’s begin:

 

Pre Payroll Activities 

 

All the fruitful Third party payroll services consider this important step and the stage are divided into two parts:

 

Defining payroll policy- A company has different policies like pay policy, leave, benefits policy, attendance policy, and others and such policies require to be truly defined and get approved by the management. 

 

Collecting inputs- Some information like attendance data, mid-year salary revision data, and more are called inputs that are received from consolidated sources or fewer teams. 

 

Input validation- After completing the second step as collecting inputs, check for validity of the data concerning adherence to company policy, authorization/approval matrix, right formats, and more. 

 

Actual Payroll Process 

 

Payroll calculation-Companies have validated input data that add to the payroll system for actual payroll processing. Through the net pay, you get or maintain necessary taxes and other deductions. If the payroll process is done, this is often a perfect strategy to reconcile the values and identify for accuracy to reduce any mistake.

 

Post-payroll process 

 

Statutory Compliance-PF, TDS, ESI come into all statutory deductions when the payroll processing performs. Then respective government agencies collect the amount from the company. Once the dues are paid return/reports are filed. 


Payout-When the payroll processing is over, you need to remember that company’s bank account has sufficient funds to make the salary payment. Then the salary bank advice statement issues specifically like employee id, bank account number, amount of wages, and more.