Payroll Processing Procedure
1. Policy Overview
Objective: To ensure accurate, timely, and compliant payroll processing, including the
distribution of payslips to all employees, which reflects their earnings and deductions
clearly.
Scope: This procedure applies to payroll activities for all employees, managed by the
Accounts Department and HR under the oversight of the Executive Director, CEO, or
Managing Director.
2. Roles and Responsibilities
Accounts Clerk: Responsible for data entry of payroll-related information and initial
preparation of payslips.
Assistant Accountant/CFO/HR Manager: Manages the overall payroll process,
verifies accuracy, and oversees the finalization and distribution of payslips.
HR Officer/Executive Assistant: Assists in collecting and verifying time records and
other payroll inputs, and distributes payslips.
Executive Director, CEO, or Managing Director: Provides final approval of the payroll
and payslip reports, ensuring compliance and correctness.
3. Payroll Processing Steps
Data Collection:
Timekeeping: Collected and verified by the HR Officer, including all details
necessary for accurate payroll computation.
Data Submission: Verified data is submitted to the Accounts Clerk for
processing.
Payroll Calculation:
Calculations are performed by the Accounts Clerk and reviewed by the
Assistant Accountant for accuracy, including deductions and contributions.
Review and Corrections:
The CFO/HR Manager conducts a thorough review of the payroll calculations
and adjustments.
Payslip Preparation:
Following approval of payroll calculations, payslips are prepared detailing
each employee’s earnings, deductions, and net pay.
Payslips are reviewed alongside payroll data to ensure consistency and
accuracy.
Approval:
The CFO/HR Manager compiles a payroll report and detailed payslips for final
review and approval by the Executive Director, CEO, or Managing Director.
Disbursement and Payslip Distribution:
Once payroll is approved, payments are disbursed to employee bank
accounts.
Payslips are distributed electronically via secure email or through a secure
online employee portal. Physical copies are provided upon request or where
required by law.
4. Record Keeping and Documentation
Secure Storage and Confidentiality: Payroll and payslip records are securely stored
with restricted access.
Retention: All records are retained in compliance with legal requirements, generally
for at least six (6) years.
5. Accountability and Control Measures
Audit Trails and Regular Audits: Ensure transparency and facilitate internal and
external audits to verify payroll accuracy.
Segregation of Duties: Maintains clear separation of duties to prevent fraud and
enhance data integrity.
6. Compliance and Enforcement
Mandatory Compliance: All involved personnel must strictly adhere to this payroll
processing procedure.
Reporting Deviations: Deviations from established procedures must be immediately
reported to the Board of Directors.
Disciplinary Actions: Non-compliance, including mishandling of payslip distribution
or unauthorized alterations to payroll records, will result in disciplinary action, up to
termination.
7. Updates and Communication
Procedure Updates: Reviewed and updated regularly to remain compliant with
changes in regulations.
Employee Communication: Changes in payroll or payslip distribution procedures are
communicated to all employees effectively and in a timely manner.
This comprehensive procedure ensures that the payroll process is not only compliant and
efficient but also transparent and responsive to the needs of the employees, maintaining
trust and integrity in the handling of personal and financial data.
