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Have you set up a payroll calendar for the financial year?

payroll calendar

Life has become so busy for most of us nowadays that either time is chasing us or we are chasing it. Apart from our daily chores or activities, we hardly remember personal events such as birthdays or anniversaries of our friends or relatives. In this situation, we tend to rely heavily on some gadget or device to remind us of these important events. Some of us mark these on our calendars too! Thankfully, we now have apps or social media to remind us of such events.

Similarly, would it not be wonderful to replicate this feature in our business and official life too? Given that some of the functions in an organisation are so very critical that the activities need to be performed without fail and on a timely basis. Let us take the example of a Payroll department in an organisation. Everything has to be timely and accurate for each of the plethora of activities that need to be performed. There is very little scope for errors or omissions, which otherwise may lead to monetary or reputational consequences. This can be easily achieved with a right system and robust procedures in place. In the procedural aspect, a payroll calendar will be of utmost use.

What is a payroll calendar?

A payroll calendar lists down all important activities to be performed by a payroll team or a pay master for the whole year, broken down by month on month, by precise date(s) and further by time, if possible. Typically, this should be prepared at the very beginning of the financial year in consultation with other stakeholders such as input providers and legal / compliance teams. The calendar would generally cover the most common activities as follows:

  • By when the monthly payroll input data is required, with cut-off dates
  • By when the outputs will be ready
  • By when funds are required in the bank
  • By when pay registers will be ready
  • By when bank files will be ready
  • By when the bank should credit employee accounts
  • By when the accounting files will be ready
  • By when MIS reports will be shared
  • By when the statutory remittance / returns will occur

Additionally, the calendar should include annual or seasonal activities such as quarterly filing of tax returns, annual returns, various statutory compliances, reconciliations, Form-16 issuance, Bonus payment, Unpaid wages remittance, Labour welfare fund, minimum wage changes, internal / external audits, etc. This calendar will immensely help any payroll department or a pay master in reminding them to perform these activities without fail.

RELATED: Are your systems configured for the new changes in income tax for 2018-19?

Be wary of weekends, holidays, etc while preparing the calendar & plan accordingly. In larger organisations where there is a payroll team having members performing certain critical activities, it will be a good habit to plan and mark their long term vacations upfront too on the calendar to ensure proper resource planning or cross-training for continuity of process.

In the case a team is performing international payroll, it is suggested to maintain multiple calendars – one for each location or country to ensure its uniqueness and for clarity. It is also important to keep in mind the time zones in the event the payroll is being run from another remote location having a different time zone. The local holidays also need to be baked into the calendar. Many countries follow the calendar year (January-December) as their financial year while some have it from April-March. Australia follows July-June as their financial year.

Once done, it would be a good practice to share the calendar with all relevant stakeholders again for their endorsement as well so as to set the expectations clearly. The same can be password protected and shared on a common drive that can be accessed any time for reference by authorised personnel or stakeholders.

Many popular payroll systems do have such features such as check list of jobs to be performed in a particular month or week. The same has to be updated regularly and on real time basis. If possible, pop-ups or email notifications can be triggered to the payroll team members or pay master of such upcoming activities. Alternatively, team meetings can be held to review the calendar in particular and plan the activities accordingly.

Care should be taken to recalibrate the calendar quickly in any unforeseen events such as bank strike, shut downs, system maintenance / upgrades, etc to avoid last minute rush or frustrations. In the event it is inevitable to change dates of any activity or all activities for such reasons, ensure to keep all the stakeholders well informed, with timely reminders.

There could be a situation where the payroll is outsourced to an external agency. If so, it is equally important that the calendar of activities listed with their consent, as they would be the main party to perform and deliver most of the activities.

Finally, it will be good to keep some buffer dates in the calendar – just to be safe, to cushion the impact of any unexpected setback due to input delays or internal process delays, system crash or misbehavior, large scale errors, etc. Remember that if payroll is not timely and accurate, there will be very few stakeholders who will understand and sympathize with these internal problems. So, it pays to be smart and safe.

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