How to Process Payroll - Complete Guide

This step-by-step guide walks you through the entire payroll process from start to finish. Follow these steps to ensure accurate and timely salary payments.

Payroll Process Timeline

For a typical semi-monthly payroll (15th and 30th), here's the recommended timeline:

Day	Task
Cut-off Day	Last day of attendance period
Day 1	Collect and import time logs
Day 2-3	Review and approve attendance
Day 4	Process payroll calculations
Day 5	Generate bank files and payslips
Pay Day	Salary credited to employees

Complete Payroll Process

Phase 1: Preparation (Day Before Cut-off)

Step 1: Verify System Settings

1. Go to Manpower > Configuration
2. Check that all tables are updated:
   • ✓ Current month's holidays are set
   • ✓ Tax tables are current
   • ✓ SSS/PhilHealth/Pag-IBIG tables updated
   • ✓ Cut-off period is configured correctly

Step 2: Send Reminders

Notify department heads to:

• Submit overtime requests
• File leave applications
• Report any attendance issues
• Submit adjustment requests

Phase 2: Data Collection (Day 1 After Cut-off)

Step 3: Import Time Logs

1. Navigate to Manpower > Timekeeping Logs > Time Importation
2. Click Import from Device
3. Select date range (entire cut-off period)
4. Click Fetch Logs
5. Review imported count
6. Click Save Logs

For manual imports:

1. Click Import from File
2. Upload Excel/CSV file
3. Map columns to system fields
4. Validate and import

Step 4: Process Leave Applications

1. Go to HRIS > Leave Management
2. Review pending leaves
3. Verify leave balances
4. Approve or reject with remarks
5. System automatically updates attendance

Phase 3: Attendance Review (Day 2-3)

Step 5: Review Time Keeping

1. Go to Manpower > Payroll > Payroll Time Keeping
2. Select the payroll period
3. Select payroll group (start with smaller groups)

For each employee:

1. Click employee name to review
2. Check for:
   • Missing time entries (highlighted in red)
   • Excessive overtime (highlighted in yellow)
   • Unapproved leaves
   • Holiday work
3. Make necessary adjustments
4. Add remarks for any changes
5. Click Save & Next to move to next employee

Step 6: Handle Exceptions

For Missing Entries:

1. Contact employee/supervisor
2. Get written explanation
3. Add manual entry with justification
4. Attach supporting document

For Disputes:

1. Flag the record
2. Set status to "Under Review"
3. Investigate with HR
4. Resolve before processing

Step 7: Approve Attendance

1. After reviewing all employees
2. Select all correct records
3. Click Bulk Approve
4. Or approve individually
5. Add approval notes
6. Click Confirm Approval

Phase 4: Payroll Processing (Day 4)

Step 8: Create Payroll Run

1. Navigate to Manpower > Payroll > Payroll Center
2. Click New Payroll Run
3. Fill in details:
   • Payroll Period: (e.g., "Jan 1-15, 2024")
   • Payroll Group: (e.g., "Semi-Monthly")
   • Pay Date: (e.g., "Jan 15, 2024")
   • Description: "January 2024 - 1st Cutoff"
4. Click Create & Load Data

Step 9: Review Computations

System automatically calculates:

1. Earnings Section - Verify:

   • Basic pay is correct
   • Overtime is computed properly
   • Allowances are included
   • Holiday pay is applied

2. Deductions Section - Check:

   • Government contributions are correct
   • Loan payments are deducted
   • Other deductions are applied
   • Tax is properly computed

3. Net Pay - Ensure:

   • No negative amounts
   • Amounts are reasonable
   • Bank accounts are valid

Step 10: Add Adjustments

For any adjustments needed:

1. Click on employee record
2. Go to Adjustments tab
3. Click Add Adjustment
4. Select type:
   • Additional earning
   • Additional deduction
   • Correction entry
5. Enter amount and reason
6. Save adjustment

Step 11: Validate Payroll

1. Click Validate Payroll

2. System checks for:

   • Computational errors
   • Missing data
   • Unusual amounts
   • Policy violations

3. Review validation report:

   • Red errors - Must fix
   • Yellow warnings - Should review
   • Blue info - For reference

4. Fix all errors before proceeding

Step 12: Generate Payroll Register

1. Click Generate Register
2. Review totals:
   • Total employees
   • Total gross pay
   • Total deductions
   • Total net pay
3. Print or save PDF for records

Step 13: Submit for Approval

1. Click Submit for Approval
2. Select approver
3. Add notes about the payroll
4. Attach payroll register
5. Click Submit

Wait for approval before proceeding.

Phase 5: Payment Preparation (Day 5)

Step 14: Lock Payroll

After approval:

1. Return to Payroll Center
2. Open approved payroll run
3. Click Lock Payroll
4. Confirm action
5. Payroll is now finalized

Step 15: Generate Bank Files

1. Click Generate Bank File
2. Select your bank
3. Choose file format
4. Review summary
5. Click Generate
6. Download file
7. Save backup copy

Step 16: Upload to Bank

1. Log in to bank portal
2. Go to payroll section
3. Upload generated file
4. Verify total amount
5. Schedule payment for pay day
6. Get confirmation number

Step 17: Generate Payslips

1. Go to Manpower > Payroll > Payslip Center
2. Select the payroll run
3. Click Generate All Payslips
4. Choose delivery method:
   • Email
   • Print
   • Employee portal
5. Click Process

Phase 6: Distribution (Pay Day)

Step 18: Confirm Bank Processing

1. Check bank portal
2. Verify payment status
3. Print confirmation
4. File for records

Step 19: Distribute Payslips

• For Email: System sends automatically
• For Printed: Distribute to departments
• For Portal: Notify employees to check

Step 20: Handle Inquiries

Be ready to address:

• Computation questions
• Missing payments
• Incorrect amounts
• Deduction queries

Phase 7: Post-Payroll

Step 21: Generate Reports

1. Go to Reports section
2. Generate required reports:
   • Payroll summary for management
   • Department cost analysis
   • Bank summary report
   • Government remittance reports

Step 22: Prepare Remittances

1. Generate government reports:

   • SSS R-3 Form
   • PhilHealth RF-1
   • Pag-IBIG MCRF
   • BIR withholding tax

2. Prepare payment for remittance

Step 23: File and Archive

1. Create payroll folder for the period
2. File all documents:
   • Payroll register
   • Bank confirmation
   • Approval forms
   • Adjustment documentation
3. Backup electronic files

Troubleshooting Common Issues

"Cannot process - attendance not approved"

Solution: Go back to Time Keeping and approve all records

"Bank file total doesn't match"

Solution: Check for employees without bank accounts or invalid account numbers

"Negative net pay detected"

Solution: Review deductions, possibly too many loans or deductions for this period

"Tax computation seems wrong"

Solution: Verify employee's tax code and number of dependents in HRIS

"Missing employees in payroll"

Solution: Check if they're assigned to correct payroll group and hired before cut-off

Checklist Summary

Before Processing

• [ ] System settings updated
• [ ] Holidays configured
• [ ] Cut-off period set
• [ ] Reminders sent

During Processing

• [ ] Time logs imported
• [ ] Attendance reviewed
• [ ] Attendance approved
• [ ] Payroll run created
• [ ] Computations verified
• [ ] Adjustments added
• [ ] Validation passed
• [ ] Approval obtained
• [ ] Payroll locked

After Processing

• [ ] Bank file generated
• [ ] Bank upload completed
• [ ] Payslips distributed
• [ ] Reports generated
• [ ] Documents filed
• [ ] Backup created

Tips for Efficiency

💡 Time Savers:

• Process smaller payroll groups first
• Use bulk approval for clean records
• Set up automatic bank upload if available
• Create templates for common adjustments
• Keep a payroll calendar visible
• Document all special cases

Important Reminders

⚠️ Critical Points:

• Never skip validation step
• Always backup before locking
• Keep audit trail of all changes
• Process payroll at least 2 days before payday
• Verify bank file before uploading
• Don't share sensitive payroll data via email

Next Steps

After successful payroll:

• Generate Government Reports
• Review Payroll Analytics
• Prepare for Next Cut-off

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📅 Pro Tip: Create a payroll calendar at the start of the year marking all cut-offs, processing dates, and payment dates. Share with all stakeholders to ensure smooth processing.