Payroll

Payroll manages employee pay preparation, payroll periods, payroll runs, payment batches, statutory remittances, and accounting readiness.

Payroll should be processed only after employee records, pay structures, attendance, leave, overtime, benefits, deductions, and payroll enrollment are ready.

Payroll Operations (HR Payroll) and employee pay terms (HR Compensation) are separate capabilities. A service may offer payroll without enabling every compensation workflow, or use compensation records without activating payroll. Payroll permissions are also separate from capability status. Check the active company-service, its enabled packages, and the user's payroll actions before diagnosing a missing workspace or blocked operation. See Capabilities and Access and HR Setup.

For manufacturing tenants, payroll readiness also includes approved production labour evidence where operators are paid from shop-floor work. Production bookings explain who worked on which order and operation; payroll decides what is owed in the pay period and sends the approved net pay to payment batches.

Workspace Reference

Workspace	How Users Reach It	Main Actions
Payroll And Compensation Setup	HR -> Setup -> Payroll and Compensation Setup	Configure payroll setup, pay structures, pay components, statutory settings, and accounting readiness.
Employee Management	HR -> Operations -> Employee Management	Enroll employees in payroll and confirm bank details, employment status, and pay structure.
Payroll Processing	HR -> Operations -> Payroll Processing	Manage payroll periods, payroll runs, approvals, posting, payment batches, and statutory remittances.
Production Operations	Production -> Operations -> Production Orders	Review operator labour bookings that may become payroll earnings after approval.
Payments	Payments or Billing payment workspaces where enabled	Execute approved payroll payment batches through the shared payment process.

Payroll Setup

Payroll setup confirms whether the organisation is ready to process payroll. Administrators should review pay structures, pay components, statutory configuration, and accounting readiness before running payroll.

Pay structures define salary ranges and pay components such as basic pay, allowances, deductions, benefits, statutory components, and other configured pay lines.

Employee pay structures and salary revisions belong to HR Compensation; payroll periods, runs, approvals, accounting accruals, payment batches, and remittances belong to HR Payroll. Loans remain owned by the shared Loans module: HR payroll can consume an approved repayment input under policy, but loan product pricing, loan schedules, and the authoritative loan balance are not HR compensation records.

Payroll Enrollment

Payroll enrollment determines which employees are eligible for payroll processing and how they should be paid. Review enrollment when an employee is hired, transferred, suspended, separated, or moved to a new pay structure.

Common enrollment issues include missing pay structure, inactive employee status, missing bank details, or wrong payment method.

Treat enrollment as the employee's effective-dated connection to pay terms and payout setup. Confirm employee approval/status, current position/job context where the structure requires it, structure approval/effective date, currency and frequency, enrollment start/end dates, and payment destination. When a term changes for one employee, use the salary-revision path; do not edit a shared pay structure to rewrite that employee's history. A position, salary revision, and payroll enrollment are related but independent records; review all three after a transfer or promotion.

Payroll Periods

Payroll periods define the pay window. They can be open, locked, processed, or closed depending on the payroll lifecycle.

Use an open period while preparing payroll. Lock or close periods only when the organisation is ready to prevent further changes.

Before opening a period, confirm the period code, name, start/end dates, pay date, currency, and that it does not overlap another active payroll period for the same service. Approval status is separate from period state. A run must use the intended period and service scope; do not change period dates to force a late or corrected source record into the wrong period.

Payroll Runs

Payroll input policy: contract between source modules and payroll

Open HR -> Setup -> Payroll And Compensation Setup -> Payroll Input Policy. The policy defines which approved operational sources are copied into future payroll snapshots. For each source, select a treatment:

Treatment	Meaning	Run behavior
Disabled	Ignore this source.	It cannot contribute or block a run.
Optional	Use approved eligible source rows when present.	No matching row is valid; matching approved rows are included.
Required	Require qualifying approved evidence.	Generation blocks when the qualifying source/employee-period condition is missing. Not every source supports this mode.
Informational	Capture context only.	Source facts are retained but do not calculate pay.

Policy changes apply to future runs. Each generated run freezes its policy version/fingerprint and source snapshots. Saving a new policy does not rewrite an existing run; use the supported correction/reversal process if a posted result must be corrected.

The current source catalogue and ownership are:

Source	Owner	What payroll can consume	Important boundary
Attendance	HR Time & Attendance	Approved worked days and attendance-derived overtime.	A clock record must be finalized/approved; payroll does not repair clock times.
Paid leave	HR Leave	Approved paid days as context.	Paid leave is captured without a salary deduction.
Unpaid leave	HR Leave	Approved unpaid days.	Deduction uses the configured salary-day divisor.
Overtime	HR Time & Attendance	Approved overtime hours.	Uses configured hours-per-period divisor and rate multiplier; prevent paying the same overtime both through attendance and a separate request.
Absences	HR Time & Attendance	Approved unexcused absence days.	Uses configured salary-day divisor and absence rules.
Unpaid suspensions	HR Employee Relations	Approved unpaid suspension days overlapping the period.	Policy does not create the disciplinary/suspension source record.
Benefits	HR Benefits	Approved active enrolments and employee/employer contributions.	Verify employee deduction and employer cost lines independently.
Salary revisions	HR Compensation	Approved effective pay change.	Applied with calendar-day, working-day, hourly or full-period proration.
One-off earnings	HR Payroll	Approved non-recurring earning adjustment.	Must belong to the applicable period/effective date and not already be consumed.
Recovery deductions	HR Payroll	Approved non-recurring recovery.	Verify authorization, amount, direction, reason and eligible period.
Loans and salary advances	Shared Loans	Approved schedule installment due within the payroll period.	Reads the linked employee's shared loan schedule; it does not change principal, schedule, product or balance.
Loan arrears	Shared Loans	Approved overdue balance on an approved account in IN_ARREARS.	Arrears are the loan account's overdue balance, not an arbitrary prior-period payroll adjustment. Validate repayment/reconciliation in Loans.
Travel claims	HR Travel & Expenses	Approved claim amounts, retaining taxable and non-taxable portions.	Choose payroll or shared-payment settlement; a claim must not be paid twice. Travel route wiring remains an implementation boundary.

Where the policy exposes calculation inputs (salary-day divisor, hours-per-period, overtime multiplier or mid-period proration), these are tenant payroll settings, not legal or statutory advice. Obtain qualified approval for local values. The run snapshot retains the policy and source facts that the calculation used.

Source-to-payroll review before generation

Resolve source data in its owning workspace, then return to payroll:

1. Attendance and overtime: approve attendance and/or overtime; check the period, shift, clock range, actual hours and duplicate overtime evidence.
2. Leave and absence: approve leave, confirm paid/unpaid type and exact overlap/days, convert an absence only through its configured workflow, and check for overlapping approved leave.
3. Compensation: approve the employee-specific revision, effective date and proration method; confirm the correct pay structure.
4. Benefits and travel: approve effective enrolment/claim data; check whether policy includes it and whether another payment path already settled the amount.
5. Loans: check schedule due date, remaining installment, account owner, currency, state and approval in Loans. For arrears, validate the overdue balance and collection decision with the loan-servicing owner. Do not enter a guessed loan deduction into an HR adjustment to work around a missing schedule.
6. Adjustments: confirm approval, reason, amount, direction, effective date/period and consumed-run link.
7. Preview: inspect included/excluded employees, exceptions, source row counts/identifiers, gross, deductions, net and employer cost before final generation.

If a required source has no eligible evidence, repair the source record or change policy through its governed process; do not fabricate source rows merely to make a payroll run pass.

A payroll run calculates pay for eligible employees in a selected period.

When generating a payroll run, users select:

• Payroll period.
• Run type: regular, supplementary, or correction.

The run can include salary, allowances, overtime, deductions, statutory items, loan deductions where applicable, benefits, and net pay.

For production labour, include only reviewed payable rows. Each row should be traceable to the employee, production order, operation, minutes or piece quantity, rate, and source date. Do not use the customer payment, invoice, or deposit receipt as the payroll source; those belong to Billing and Payments on the receivable side.

The generated input snapshot is evidence of the source rows and policy version used at calculation time; it is not a live view of the employee's latest records. When an upstream source changes after generation, inspect its source identifier and run snapshot. Use the supported replacement/correction process when available rather than expecting an old run to recalculate itself.

Normal HR payroll that uses Salary and structure lines keeps the normal payroll accounting pattern: payroll expense or configured pay-component accounts debit, payroll payable or employee payable credit, then payment clears the payable. The production labour absorption clearing pattern applies only to production labour earnings that come from shop-floor labour evidence.

The run actions exposed in the current UI follow these states:

Run state	Available next control	Meaning / evidence to inspect
Generated	Validate, reverse	Calculation and input snapshot exist; validation is still required before approval.
Validated	Validate again, approve, reverse	Current validation passed; approval remains a separate controlled decision.
Approved	Post to GL, reverse	The run is approved for posting; it is not yet proof of a posted journal or employee payment.
Posted	Reconciliation, reverse	Payroll accrual posted; inspect the linked GL batch and settlement state.
Reversed	No normal approval/posting action	Inspect reversal linkage and replacement/correction records; retain the original run.

Approval status is also displayed separately from run status. Do not use approval state alone as evidence that the run reached POSTED.

Production Labour Settlement

Use this sequence when operators are paid from manufacturing work:

1. Complete the operation line in Production and book labour per operator.
2. Review the booked minutes, piece quantity, piece rate, hourly rate, and supervisor reason where any override was used.
3. Confirm every operator is an active employee with payroll enrollment and payment details.
4. Include the approved labour evidence in the correct payroll period or import it through the tenant's controlled payroll input path.
5. Generate and review the payroll run.
6. Approve the payroll run. In the standard UI, approval also submits payroll accrual posting where GL setup is complete.
7. Create and complete the payroll payment batch.
8. Review statutory remittances and payroll reports.

If production labour bookings are not yet automated into payroll earnings, keep the reviewed production evidence attached to the payroll run or reconciliation workpaper before approval. The production order should not be considered fully closed until the payable labour has been paid or formally marked as not payable.

Payroll Field Implications

Field Or Area	Meaning	Payroll Impact
Payroll Period	The pay window being processed.	Controls which employee data, time data, and pay lines belong in the run.
Run Type	Regular, supplementary, or correction run.	Determines whether the run is the main payroll, an extra run, or a correction.
Pay Structure	Salary and pay component configuration assigned to employees.	Drives gross pay, allowances, deductions, benefits, and statutory calculations.
Payroll Enrollment	Employee payroll eligibility and payment setup.	Employees not enrolled correctly may be excluded or paid incorrectly.
Bank Details	Employee payment destination.	Needed before payment batches are created or executed.
Accounting Readiness	GL and posting setup for payroll expenses, liabilities, deductions, and payments.	Blocks or controls finance posting after approval.
Statutory Remittances	Tax, pension, or other required deductions arising from the run.	Must be reviewed and settled after payroll approval.

Review Before Approval

Before approving a payroll run, review:

• Employee count.
• Gross pay.
• Deductions.
• Net pay.
• Exceptions or missing setup.
• Employees included or excluded unexpectedly.
• Accounting setup readiness.

Approval should happen only after the payroll team confirms the figures.

Where maker-checker applies, the preparer and approver should be separate people. At minimum compare the run against:

Review	Questions
Population	Are eligible active/enrolled employees included? Are inactive, suspended, exited or not-yet-effective employees excluded for the right reason?
Salary and revisions	Does each employee use the correct structure and effective revision/proration?
Time	Do worked, leave, unpaid, absence and overtime days/hours agree with approved records?
Credit recovery	Do schedule installments and arrears match approved Loans balances and payroll cutoffs?
Deductions and earnings	Are adjustments approved, correctly directed, and not consumed twice?
Benefits and travel	Do employee/employer benefit lines reconcile? Are travel amounts separated into taxable/non-taxable portions and settled only once?
Totals	Do gross, individual deductions, net and employer cost agree with line detail?
Accounting	Are required rule lines and account tags resolved, and do expected debits equal credits?
Exceptions	Is every block, warning, missing source or override understood and assigned to an owner?

Retain the reconciliation output with the period/run sign-off where tenant policy requires it.

Posting And Payment

After approval, payroll is submitted to accounting where setup is complete. If approval succeeds but posting cannot complete, use the run's Post to GL retry action after resolving the blocker. Do not create an unrelated manual journal because it breaks the link between payroll run, employee, period, and GL batch.

Payroll payment batches can then be prepared for net pay disbursement through the configured payment process.

The sequence is intentionally staged:

Source records -> preview/snapshot -> validate -> approve
               -> payroll accrual GL -> payment batch -> payment execution
               -> payable-clearance GL/reconciliation
               -> statutory filing/remittance and payslip delivery

The payroll run is not the payment batch. Payroll accrual recognizes employee costs and amounts payable; later settlement clears the payable through the selected payment method. Cash and bank are distinct and should resolve respectively to CASH_AT_HAND and CASH_BANK. Inspect the posted GL batch after accrual and settlement rather than inferring a journal from a UI status.

The payroll reconciliation view compares run totals, input-snapshot row counts/hash coverage, GL state, payment state and statutory state. A green-looking run cannot stand in for a missing GL readback or settled payment. If approval succeeds while GL posting fails, use the supported Post to GL retry after resolving the cause; do not create a new run or an unrelated manual journal.

The payroll screen also supports statutory remittance preparation. Use this to track amounts that must be paid to tax, pension, or other statutory authorities.

Payroll Payment Batches

Payment batches should be created from approved payroll results. Check employee payment details before sending a batch for approval or execution.

Completing a payment batch is the employee settlement step. It clears payroll payable to the selected cash, bank, mobile money, or payment-clearing account. For production labour, this is separate from production cost absorption: the production order records the labour cost evidence, payroll records the employee payable, and the payment batch records the actual payout.

If a payment fails, resolve the employee payment destination or provider issue before retrying.

Statutory Remittances

Statutory remittances track obligations arising from payroll, such as tax, pension, or other required deductions. Review selected remittances, total amount, payment method, payment reference, and settlement date.

An HR record marked prepared, approved, or exported is not by itself evidence that a bank, payment provider, or statutory authority accepted the transaction. Check the relevant payment execution/reconciliation and authority receipt or filing acknowledgment, where that integration is enabled.

The filing workflow can prepare a payload snapshot and export it. Record an authority acknowledgment only after the actual authority/provider accepted the filing and its response has been read back. Preserve filing period, authority, payroll-run linkage, exported payload/version and returned reference. If the tenant files outside the application, retain the external reference through the approved process; an internal Exported state is not proof of external acceptance.

Correction and reversal handling

Before correcting a run, identify whether the issue is in source data, policy, calculation, approval, GL posting, payment or filing. Repair the owning layer first: attendance in Time & Attendance, loan amounts in Loans, or individual salary terms through a salary revision—not by editing an old payroll line.

Use supported correction/replacement and reversal controls for the run's state. Reversing a posted run must create or identify its linked GL reversal; never delete the original posted run. Completed payment batches or statutory remittances have their own settlement/reversal constraints and are not automatically undone by reversing payroll. Verify the reversal batch, replacement run, payment adjustment, employee balance and filing state separately before closing the incident.

Common Mistakes

• Generating payroll before attendance, leave, or overtime is complete.
• Processing payroll for employees not properly enrolled.
• Approving payroll without checking excluded employees.
• Posting payroll before accounting setup is ready.
• Treating a failed automatic GL submission as a reason to generate a second payroll run.
• Creating payment batches with missing or outdated bank details.
• Closing a payroll period before corrections are complete.
• Treating a paid customer invoice as proof that operators have been paid.
• Collapsing several operators into one production labour booking when payroll needs employee-level evidence.

Good Practice

Use a checklist before approval: employee readiness, time data, pay components, exceptions, accounting readiness, payment readiness, and statutory remittances. Keep payroll runs approved, posted, paid, and closed in a controlled sequence.

For manufacturing order closeout, also see Production Order To Dispatch, Billing, And Payroll and Production Operator Payroll.

Related HR Guides

• Capabilities and Access
• HR Setup
• Employees
• Leave and Attendance
• Benefits and Total Rewards
• Travel and Expenses
• Hire to Payroll and Separation
• Worked HR Scenarios