Payroll refers to the process by which employees receive their salary. Functions involve balancing and reconciling payroll data and depositing and reporting taxes. The payroll department takes care of wage deductions, record keeping and verifying the reliability of pay data. The payroll department delivers payroll checks, maintains compliance with tax laws, records paperwork for new hires and edits existing employee files. Payroll professionals are also responsible for calculating reimbursements, bonuses, overtime and holiday pay.


Payroll is a list of employees who get paid by the company. Payroll also refers to the total amount of money employer pays to the employees. As a business function, it involves:

  1. Developing organization pay policy including flexible benefits, leave encashment policy, etc.
  2. Defining payslip components like basic, variable pay, HRA, and LTA
  3. Gathering other payroll inputs (e.g., organization’s food vendor may supply information about the amount to be recovered from the employees for meals consumed)
  4. The actual calculation of gross salary, statutory as well as non-statutory deductions, and arriving at the net pay
  5. Releasing employee salary
  6. Depositing dues like TDS, PF, etc. with appropriate authorities and filing returns


Payroll is one of the most important aspects of business. It affects employee morale and reflects a business’s financial stability and reputation. Because employees rely on their paychecks, errors or untimely payment can create a lack of trust. But when paychecks are accurate and delivered in a timely manner, employees are more engaged and motivated.

Payroll department is defined as the departments that manage payroll in an organization. Payroll is typically managed by the Human Resources and Accounting departments. Human Resources collects and enters employees’ data for payroll purposes, and Accounting completes the calculations for taxes, wages and benefits.

Like every single company, payroll is of utmost importance to our organization. With payroll, the employee’s efforts are being rewarded.

With payroll also come the computations of how the salary of the employee came to be within the payroll periods (be it the 1st- 15th or the 16th-30th period), and if the employee is working night shifts, how to compute for their night differential pays.