Monthly payroll runs through six fixed stages: changes, employee data, earnings, deductions, review, then payment and remittance. Discipline on the cut-off date and a review before payment matter more than the software you use.
Step by step
- 1
Set a fixed cut-off day
Absences, leave, overtime, penalties and advances are collected up to that day, and anything arriving later moves to the next month.
- 2
Update employee data
New hires, leavers, raises and allowance changes, each backed by a written, approved decision.
- 3
Calculate earnings
Basic pay and allowances, then variable pay such as incentives, commissions and overtime, prorated for anyone who worked part of the month.
- 4
Calculate deductions
In Egypt the employee insurance share, salary tax and the Martyrs Fund contribution, in the Gulf the social insurance contributions that apply, then advances and penalties.
- 5
Review and approve
Compare the month's total with the previous month and explain every difference, then have someone other than the preparer approve the payroll.
- 6
Pay, remit and issue payslips
Transfer salaries through the bank or the wage protection system where it applies, pay contributions and taxes on time, and give every employee a payslip.
What most often disrupts payroll is accepting changes after cut-off by phone or message. Any change without an approved document waits for the next month.
- monthly payroll process steps
- how to run payroll for a small company