A Founder's Zero-Error Monthly Payroll Checklist
Run payroll from a fixed monthly checklist: freeze inputs, reconcile attendance, compute gross pay and statutory deductions, review the variance against last month, approve, pay, then file. TDS is due by the 7th and PF and ESIC challans by the 15th. Always run a draft first and compare it before releasing the bank file.
No checklist can promise zero errors, but a fixed monthly routine removes most of them. Here is a calendar you can copy, and the checks to make before the bank file goes out.
The monthly calendar
| When | What | Who |
|---|---|---|
| By the 20th | Collect joiners, leavers, salary changes, loans and reimbursements | HR |
| By the 25th | Close attendance and approve all regularisation requests | HR and managers |
| 26th | Run a draft payroll | Payroll |
| 27th | Review the draft and the variance against last month | Founder or finance head |
| 28th | Approve, release the bank file and send payslips | Finance |
| By the 7th of next month | Deposit TDS | Finance |
| By the 15th of next month | Pay PF and ESIC and file the PF return | Payroll |
| As per state | Pay professional tax and Labour Welfare Fund | Payroll |
Adjust the dates to your own pay day, but keep the order.
Seven checks before you release the bank file
- ✓Compare headcount with last month. Every difference should be a named joiner or leaver.
- ✓Look at gross and net pay for anyone whose pay moved by more than a set percentage.
- ✓Look for zero or negative net pay.
- ✓Check each new joiner has a bank account, IFSC and PAN on file.
- ✓Confirm the PF wage and ESIC ceiling treatment for anyone whose salary changed.
- ✓Check the tax regime and declared investments for TDS.
- ✓Confirm overtime, incentives and arrears were included only once.
Three habits that prevent most mistakes
- Have someone other than the person who prepared payroll review it.
- Never edit the bank file by hand. Fix the source and generate it again.
- Keep a short log of every correction and its cause. If the same error appears twice, change the process.
What to keep on file
Save the signed-off payroll register, the bank file, the challans and the acknowledgements for each month in one folder. When an inspector or auditor asks, you can answer in minutes.
When to hand it over
If you are still running payroll yourself, a founder's time is the most expensive input. Once you pass a few dozen employees, put payroll on software and a named owner, and keep the review for yourself.
Written by
HR Manager, Airwix Technologies (Sleet)
Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.
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