January 4, 2023
Shreeja Ray

All You Need to Know about Payroll Management

Payroll Management is a phrase used by companies to pay their employees regularly. If you run a firm or organization, every employee must be tagged, and each payment made for an employee for a given period of time is detailed under Payroll, as well as any benefits, reducing, or exemption of benefits under monthly wage.

What exactly is payroll?

The phrase "payroll" has a number of connotations that are linked with it, and it is used interchangeably as an umbrella term for the following:

1. A collection of individuals who are employed by a company and are shown with their salaries.

2. The total number of people who are employed by a company or economy.

3. The quantity of money that is given to the individuals who are employed by a specific company.

4. The entire series of responsibilities associated with the administration of the money that is paid to the personnel

Why is Payroll Management Important?

Let's look at the five main reasons why Payroll Management is seen as an important part of Human Resource Management:

1. When companies want to trim their budgets, they are often told to try outsourcing their non-core processes, and payroll is often at the top of that list. Payroll processing is important because it affects your budget, which is one of the main reasons why it is so important. It takes an incredible amount of time, energy, and other resources to process every check, expense, deduction, garnishment, and payment.

2. Risk mitigation: The most complicated part of payroll processing is the legal hurdles and strict compliance that each company must meet. So, if someone asks you why payroll processing is important, tell them that even a small mistake or glitch can make it more likely that you will get in trouble with the law.

3. Resource Reallocation: It takes a lot of time to do all the different things that need to be done before employees' pay can be given to them. And if you hire a reliable payroll management team to work with you, you can delegate these hard-to-do tasks and make better use of your resources.

What does a Payroll Management System Include?

Information about employees

This information must be written down by an employer in order to find out the basics about an employee. As per KYC documents, an employee's payroll does include information like their name, address, date of birth, UAN number, and more.

Worked Hours

As every company has a certain amount of time that an employee has to put down as working hours per week, this helps the employer keep track of how many hours an employee worked and give them their pay.

Time Off

Each employee's time off is written down in a column on the pay roll. This column also keeps track of any extra time off.


Basic salary is a fixed amount that an employer gives to each employee based on their job title. An employee gets a fixed annual salary, which is split into monthly payments based on the number of working days. An employer will list this salary as the basic term of pay.

Pay for overtime

This slot of pay will show how much extra money an employee has made on top of his or her salary and wages. It will also show how much extra money any worker has made who has gone over his or her daily work limit and worked a little longer than usual to earn more money.

What are the Stages of Payroll Processing?

Planning is essential for payroll officers. Activities, withholdings, social security contributions, and other changes must be tracked. Pre-payroll, real payroll, and post-payroll are the three processes.


Before deciding on employee pay, the payroll process must be planned. This preparation takes up most of the payroll procedure. After pre-payroll processing, it involves setting up salary structures, payroll cycles, gathering data for the full month, checking the data, and using that data to finish the real payroll process. Few installations follow the company's values, while others follow the law and regulations, known as "statutory compliances in India."

Calculation of Payroll-

The confirmed input data is entered into the payroll system to compute payroll. After taxes and other deductions, net pay is determined. Reconcile and validate data after payroll to avoid issues.


Post-Payroll is the third and last stage of payroll. Three phases make up the payroll process: pre-payroll, payroll, and post-payroll. Numerous large-scale jobs make up the protracted process.