Payroll Processing Cycle - Step 1: Collecting Information

A payroll professional will usually need to collect and compile all data to process the following payments/deductions during a payroll cycle:


Overtime / Undertime

In order to keep track of hours worked, companies either purchase a time management system where the employees can clock in and out, or keep a manual timesheet.

The timesheets collated are usually verified or approved by the employees’ respective supervisors before they are sent to the payroll department for processing.


Attendance / Leave

To track leave taken, the company can choose to either use a leave management system or manual leave application form.

The payroll administrator will check for unpaid leave deductions or annual leave payments when processing the payroll.


Reimbursements / Claims

Reimbursements may refer to expenses borne by the employee for business purposes, e.g. clients’ entertainment, office stationery, travelling claims, transport claims, etc.

Reimbursements have to be supported by both receipts and the supervisor’s approval before payroll processing. Companies are required to keep 7 years of reimbursement records in case of a Statutory Board audit.

Claims usually refer to staff benefits, e.g. medical and dental expense, gymnasium memberships, etc. A company may choose to tie up with an insurance company to offer the above benefits.


Commissions / Incentives

The payment depends on the employee’s employment contract or company policies