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The payroll run

Everything above this page is a hypothesis. The payroll run is where you find out whether it was right, which is why the first run should be for five people and not for five hundred.

Three screens, in a fixed order, every period. The order is not a convention. Each one consumes what the one before it produced.

The order​

  1. Payroll Attendance. Turns a month of attendance and leave into a pay-days figure per person.
  2. Payroll. Reads that sheet and produces the payslips.
  3. Post Payroll. Hands the totals to the accounts.

Payroll Attendance​

Payroll Attendance is the bridge between time and money, and it is the step people skip.

One document covers a payroll cycle, a pay period, and optionally one pay scale and one pay area, so that a big company can do the factory and the head office as separate sheets. Its lines are one per employee, and each line is the month reduced to numbers: absent days, leave days, the deductions for lateness, early leaving, half days and short hours, a leave adjustment, an adjustment days figure, the pay period days, the total deduction days, and the salary days that are left.

That total deduction days figure is the one the payroll run actually reads. Everything else on the line is there so a human can see where it came from and argue with it before the money moves.

Three things the screen enforces, each of which exists because of a real mistake:

  • A duplicate slice is refused. You cannot create two sheets for the same cycle, period, pay scale and pay area. Two sheets would both be read and the deductions would double.
  • An employee already on another sheet for the period is named and refused. This is the protection that matters when a company splits a payroll by pay area and somebody has moved between areas mid-month.
  • Once payroll has been processed for the period, the sheet can no longer be saved or deleted. Deliberate. The payslips were calculated from it, and changing it afterwards would make them unexplainable.

The screen also creates the leave adjustment entitlements that follow from what it found, so a leave adjusted on the sheet does come back to the person's balance.

Payroll​

Payroll is the run. The header is a payroll date, a cycle, a pay period, and optionally a pay area, a pay scale and a pay channel. Its lines are the people, and under each person the salary computation: every wage type that applied to him and the figure against it.

What the run reads​

  • The attendance sheet, for the deduction days. This is the first thing to understand about the run.
  • The Employee Organization Assignment covering the period, for whether the person is in the run at all, which salary structure he is on, and where his cost belongs.
  • The Employee Policy Profile, for his pay rate, his tax settings and the contribution schemes he is in. The run only looks at people whose profile names the cycle being run.
  • The salary structure, for the wage types and the percentages.
  • Recurring Payments and Deductions, and the one-off Employee Additional Payment Or Deduction.
  • Overtime, from Process Overtime.
  • Loans, for the instalment due this month.
  • The contribution schemes that are ticked active and that the man's policy profile reaches.
  • The tax slabs, for the deduction.

What it produces​

Per person: the basic salary, the allowances, the gross, the per day amount, the absent days and the absent deduction, the deductions, the tax, the net, and the payment amount with the method and the account it goes to. The figures the client checks first are the gross, the total deduction days and the net.

Two things to say out loud to a client​

The run reads the sheet, not the punches. If a man's attendance was wrong and the sheet was built from it, the payslip is wrong, and running the payroll again will produce the same wrong figure. The sheet has to be corrected first, which is also why the sheet is locked after the run and a correction means reversing in the right order.

The run is not the payment. A payroll can be run, examined, discarded and run again. Nothing has been paid and nothing has reached the accounts until it is posted.

The first run, properly​

Do not run five hundred people. Pick five, from different salary structures and different policy profiles, run them, and reconcile each payslip with a calculator.

Check in this order: the gross against the structure, the deduction days against the attendance sheet, each contribution against its scheme, the tax against the slab, and then the net as the sum of the lot. If all five tie, run the rest. If one does not, the fault is in a stage above this page and this is the cheapest moment you will ever have to find it.

Post Payroll​

Post Payroll hands the month to the accounts. It takes a payroll, a posting date and a journal nature, and writes one accounting entry.

It builds that entry by grouping the payroll's payslip lines by wage type and taking the debit and credit accounts from the accounting grid on the salary structure. That is the grid people leave empty in stage five, and this is the day they find out.

Posting is not the same as releasing. See how a screen works. Once a payroll is posted the accounting entry exists, and undoing it is a reversal with its own date and reason rather than a deletion. A reverse date earlier than the posting date is refused, because an entry cannot be undone before it was made.

What else happens in a period​

Beside the three screens above, a normal month also has:

If something looks wrong​

  • "The run produced nothing" - there is no pay period for the month, or no wage types, or no salary structure with lines.
  • "One person is missing" - his policy profile names a different payroll cycle, or his assignment does not cover the period.
  • "Everybody has full deduction days" - the attendance sheet was built before the month's attendance was corrected, or the calendar has no working days for the period.
  • "The payslip is wrong and re-running does not change it" - the error is on the attendance sheet. Correct the sheet, in the right order, not the run.
  • "It will not let me change the attendance sheet" - payroll has been processed for that period. That lock is intentional.
  • "It will not let me create the sheet and it names an employee" - that person is already on another sheet for the same period.
  • "Posting failed" - a wage type the run used has no accounts on the salary structure's accounting grid.
  • "We need to undo a posting" - reverse it, with a date on or after the posting date. There is no deletion.