Payroll month-end checklist: 12 checks before you lock

A payroll month is easy to get wrong in the last two days. The inputs arrive late, a leaver is missed, a bank account changes, and by the time someone notices the money has gone. This checklist is the one we would want in front of us before locking any month. Use it with or without software; the checks are the same.

Who owns each check

A checklist with no owners is a wish. Give every check a name before the month starts, and write the names down.

• HR owns the roster, joiners and leavers, salary revisions and the start and end dates behind them.
• Line managers own the overtime, attendance and leave that reach payroll, and they close those inputs by a date everyone knows.
• Payroll owns the run itself: that it computes, that the variance is explained, and that the register is ready to sign.
• Finance owns the sign-off, the bank file, and the funding of the payment.

When one person plays all four roles, as in a small company, the list is still useful. It stops one tired person from reviewing their own work in the same hour they did it.

Five days, not one

Most month-end problems come from compressing everything into the last afternoon. A rhythm that holds up:

1. Five working days out. Announce the input cutoff. Send managers their overtime and leave sheets to confirm.
2. Three days out. HR confirms the joiners, leavers and revisions that take effect this month. Anything not confirmed now waits for next month on purpose.
3. Two days out. Close the inputs, run a draft, and read the variance against last month.
4. One day out. Fix what the draft exposed, then run it again. A draft that was clean the first time deserves suspicion, not applause.
5. Lock day. Work the checks below, lock, sign the register, release payslips and send the bank file.

Before you lock

1. Roster. Everyone who should be paid is on the run: this month’s joiners (prorated from their start date), and nobody who left before the month began. Check the leavers separately; their last month is usually settled through a final settlement, not the normal run.
2. Pay on record. Nobody is on the run with no salary. A joiner without a salary breaks the run, so find them before you lock, not after.
3. Salary revisions. Every raise that takes effect this month, or earlier, has been applied. A revision that lands after a paid month produces arrears, so decide now whether it is in this run or the next.
4. Variable inputs. Overtime, bonuses, commissions, one-off deductions and recoveries are entered, and the sheet that feeds them is closed. Late inputs belong to next month, on purpose, not by accident.
5. Attendance and leave. Unpaid days and approved unpaid leave for the month are in, and nobody is paid for days they were absent without cover.
6. Loans and advances. This month’s instalments are scheduled, and nobody on a loan is excluded from deduction by accident. A leaver’s outstanding balance is netted in their settlement.
7. Bank details. Every payee has valid bank details, and every change this month was approved by the right person and checked against the account holder’s name.
8. Provident fund and statutory deductions. Contributions are posted for everyone eligible, and eligibility rules (for example, after confirmation) were applied by rule, not memory.
9. Tax. The tax withheld is explainable for a sample of people across the pay range: pick three and recompute by hand.
10. Variance against last month. Total gross, total deductions and headcount against the previous month. Every movement should have a reason you can state in a sentence.

After you lock

11. Sign off a register. Review the gross-to-net register by department, and sign it. A signature on a record beats a verbal yes.
12. Publish and pay in the right order. Release payslips and export the bank file only from the signed register, and keep the file with the register.

The three errors that cost most

• A leaver paid as if still employed. Recovering a salary from someone who has gone is slow and awkward.
• A salary revision applied to the wrong month. It silently moves tax, provident fund and arrears.
• A bank change that was not verified. One redirected payment is a fraud case, not a payroll error.

What to keep as evidence

Keep a small folder for each month, and keep it somewhere that outlasts any one person’s laptop: the signed register, the variance note, the bank file as sent, and the list of inputs that missed the cutoff and why. An auditor, a tax officer or an employee with a question will each ask for part of it, and the month you need it for is never the month it was easy to rebuild. A system that records who approved what and when, as the approvals and audit trail does, makes most of this folder automatic.

When something is found after the lock

Do not edit a locked month. Run a correction for the difference only: pay arrears when someone was underpaid, and book an overpayment to a recovery register to be taken back next month, never a second salary. See how to correct a paid payroll month.

Checks that scale with the company

The twelve checks do not change as you grow, but the way you do them does. At twenty people you can read every line of the register. At two hundred you read the exceptions: new names, people whose pay moved, people whose deductions moved, and anyone paid for a part month. At two thousand you also compare departments with each other and with their own history. The aim never changes: nothing leaves the building that you could not explain to the person it was paid to. The same logic applies to money held on behalf of staff, so read how a provident fund register should reconcile in the same sitting.

Make it routine

The checklist works best when it is a standing meeting, with named people: who closes inputs, who reviews, who signs, who pays. In WageVerge the review before lock lists exactly these things (what would break the run, what changed since last month) so the checklist is the screen you work from. See how the run itself is built in payroll and tax.