Payroll run preparation

You make sure that when the owner or their payroll provider runs payroll, the inputs are complete and right: every person who should be paid is there, every change is evidenced and approved, every anomaly has been raised with the person it affects, and the totals reconcile to last period. A wrong invoice is fixed next week; a wrong pay slip is a person who cannot pay their rent. You prepare and check. The owner (or the payroll provider or accountant) approves, runs payroll and makes all filings and payments.

When to use

• "Payroll is due Friday, can you get it ready?"
• "Check the timesheets before we run payroll."
• "Why is payroll higher this month?"
• "We have two starters and a leaver this month."
• Set a reminder with cronjob at the input cut-off for each pay period.

What you need

• Access, best first: the payroll or accounting software as a connected app on the Connections page; your own browser signed in by the owner to the payroll software (read only unless the owner explicitly says you may enter inputs); or files from the owner: last period's payroll report, timesheets, leave records, approvals. If none is there, ask with clarify.
• The pay calendar: period start and end, input cut-off, pay date, and filing deadlines for the period.
• Last period's payroll summary by person (gross, deductions, net, employer costs).
• Starter details (start date, contract salary or rate, hours, tax and identity forms the country requires), leaver details (last day, final pay items), and approved changes (pay rises, hours, bonuses, commission, expenses through payroll).
• The owner's overtime and leave rules, and the legal rules for the country (and state or region): minimum wage, overtime, statutory sick and family leave pay. These vary widely and change: check with web_search on the government's own site and cite the source and date.

Method

1. Fix the period and the roster first. Confirm period dates, pay date and who is in this run. Roster reconciliation: last period's headcount plus starters minus leavers must equal this period's headcount. Read both employment status and any active flag: someone marked active can still be on unpaid leave.
2. Collect the changes into one change log: person, change, effective date, amount, evidence (contract, email approval), approver. No evidence, no change: ask.
3. Hours for hourly staff. Total regular, overtime, holiday and unpaid hours per person from the timesheets. Apply the owner's stated overtime rule; if there is none, apply the legal default you checked and say which rule you used. A shift with no clock-out has unknown hours: flag it, never fill an assumed time.
4. Run the anomaly checks (full list and thresholds in references/payroll-checks.md) and attach each flag to the person it affects:
   • missing punches, overlapping or duplicate entries
   • overtime well above this person's usual pattern, with both numbers
   • zero hours for someone who normally works
   • hours well above the schedule
   • pay rate changed since last period without a change log entry
   • leave taken beyond the available balance
   • someone paid last period missing now, or a new person with no starter record
   • hourly pay below the minimum wage you checked
   • gross pay up or down by more than 10% against last period without a logged reason
5. Starters and leavers. Starters: the forms and identity checks the country requires are collected by the owner (for example a W-4 and I-9 in the US, or a P45 or starter checklist in the UK); you list what is missing. Pro-rate the first and last pay periods using the method in the contract or the provider's standard, and show the working. Leavers: final pay items (unused holiday, notice pay) come from the contract and the law: flag them for the owner or accountant to confirm.
6. Bank detail changes. Any change to an employee's bank details is verified by the owner directly with the employee through a known channel (in person, or a call to the number on file), never by email alone. You never change bank details. Hold the change and flag it.
7. Variance report against last period: headcount, total gross, total employer costs, total net, by person, with every movement explained by a change log entry or a flag. Unexplained differences are questions.
8. Resolve flags one at a time with the owner. For each: what you found, what happens if left as it is, what they want. Record the decision. Do not batch them into one "looks fine?".
9. Hand over the validated input sheet to the owner or payroll provider, with totals: people, hours by type, gross, cash needed (net pay plus taxes and contributions due), pay date. If cash data is available, say whether the account covers it on the day. The owner approves and runs payroll.
10. After the run (when the owner confirms): check the provider's payroll report against your inputs, note filing deadlines for the period with their cited dates, and prepare the payroll journal for the ledger (see month-end-close).
11. Confidentiality. Payroll data is personal and sensitive. Keep it in files shared only with the owner and their payroll provider or accountant. Do not post it to team channels, do not copy identity numbers, dates of birth, home addresses or bank numbers into sheets or messages, and keep only what you need in memory (dates and rules, not salaries).

Worked example: October inputs

Roster: 12 paid in September, plus 1 starter (Ana, from 5 Oct), minus 0 leavers = 13. The provider's roster shows 13. Ties. Change log: Kim's pay rise from 1 Oct (approved 22 Sep, email on file); Ana's starter record (contract on file; the identity and tax forms the country requires are listed as outstanding for the owner to collect); Q3 commission for the sales team (approved schedule on file). Flags, raised one at a time:

• Maria, Tue 13 Oct: clocked in 08:02, no clock-out. Hours unknown. The owner asked Maria; answer 16:30, recorded with its source. Not filled in by assumption.
• Jo: 14.5 overtime hours against a usual 4. Approved by the owner on 19 Oct; approval noted against the flag.
• Dana: bank details changed in the self-service portal on 9 Oct. Held; the owner confirms with Dana in person before the run. Pro-rata for Ana: 36,000 / 12 x 20 of 22 working days = 2,727.27, by the method in her contract. Variance: gross 41,200 to 45,367 (+10.1%), explained in full by Ana's part month (+2,727.27), Kim's rise (+140.00), Jo's overtime (+410.00) and commission (+890.00). Unexplained: 0.00. Hand-over: the input sheet; totals (13 people, gross 45,367, net pay of 35,870 needed on the 28th, taxes and contributions of 15,190 due on the cited date); one open item (Dana's bank details). The owner approves and runs payroll.

What you never do, even with access

• Enter or change anyone's bank details.
• Approve or submit the run, or make any payment.
• Change a pay rate, hours or a leave balance without a logged approval.
• File anything: period submissions, year-end returns, employee tax forms. You list what is due and when, with the source; the owner, accountant or provider files.
• Run payroll "because it is ready". If the owner asks you to "just run it", explain that you prepare and they approve and run, and hand them the validated sheet.

Output

• payroll-inputs-<period>.xlsx: Roster (person, status, pay type, rate or salary), Changes (change log), Hours (hourly staff), Flags (person, issue, evidence, decision), Variance (this vs last period by person), Totals, Checks.
• A show_card: headcount, starters, leavers, total gross, cash needed, open flags, pay date, input cut-off.
• A list of anything the owner or accountant must decide or file, with dates.

Checks before you finish

• Headcount reconciles: last period plus starters minus leavers.
• Every change has evidence and an approver.
• Every flag is resolved or explicitly left open by the owner.
• Gross pay movement by person is explained by a change or a flag.
• Every rate meets the minimum wage rule you checked (cited).
• No bank detail change is in the sheet unverified.
• No identity numbers, dates of birth, addresses or bank numbers appear in your files or messages.

Pitfalls

• Wrong period. A period that straddles a month end makes it easy to double or skip a week. Fix dates first.
• Silent corrections. A plausible guess at a missing punch becomes a wrong pay slip that looks right. Flag it.
• Changes from conversation, not approval. "We said she'd get a rise" is not evidence.
• Forgetting the leaver. Paying someone after their last day is hard to recover.
• Ignoring local rules. Overtime, minimum wage and leave pay rules differ by country and region. Check and cite.
• Treating a payroll system's "ready" flag as proof. Check the roster and totals yourself.
• Running payroll because you can. Even with access, you do not submit, approve or file.

See also

• expense-claim-review, month-end-close, thirteen-week-cash-forecast.