5 Practical Payroll Tips for the Newly Minted HR

Quick Summary

• Keep employee master data and joiner/leaver information accurate before every payroll cut-off.
• Define clear processes for arrears, recoveries and salary revisions so payroll inputs are not missed.
• Plan tax declarations and proof collection around the employee’s applicable tax regime and payroll calendar.
• Use payroll management software to reduce repeated data entry, improve controls and keep HR-payroll handoffs structured.

In 2006, Snowdrop carried out a survey on the relationship between HR and payroll after it witnessed first-hand some of the difficulties that can arise if the two don’t work together.

It revealed that information delivery is often at the heart of the problem: more than 60% of payroll professionals believe HR doesn’t give them accurate information, while 54% think HR doesn’t keep them up to date. That said, the survey found both sides willing to work more closely together (96% in payroll and 85% in HR)." (Source: PersonnelToday.com)

Given such a landscape, we thought it prudent to put out there a few practical tips or best practices that would help you - the HR professional - to ensure that you keep up your end of the bargain; that is, essentially, to pass on the right information with regard to various aspects of payroll to your payroll team.

The following tips should help you achieve two goals: segregate the role of HR and payroll in the various areas mentioned as well as ensure that best practices are being followed by you, the HR, when collaborating with the payroll team.

1. Send the right employee list to payroll

You need to be aware of whether all relevant employees are in fact on the payroll of your organization and that the payout has been made to all of them. Along with the question “Have I paid everyone?”, another that needs to be asked is, “If not, why was an employee missed out/paid inadvertently?”. A common reason for rolling out an erroneous payroll is that the resignations for the month have not been considered and the payout has been made here accidentally.

Another common scenario is HR having passed on the wrong employee ID to payroll. In such cases, the employee in question may get removed from the list and not receive a payout.

The best teams avoid this by having more checks in place, wherein one individual enters the values and another verifies them for accuracy. This needs to be ensured between HR and payroll and can take care of a large chunk of human errors that creep into a company’s payroll.

Where HR and payroll data sit in the same payroll management software or HRMS, these checks can be easier to manage because employee changes do not need to be repeatedly re-entered across disconnected systems.

2. Define a policy and process for arrears

Technically, arrears refers to “money that is owed and should have been paid earlier”.

Say a new employee joins towards the end of a month. Let’s assume his/her joining date to be the 29th and salary payout date to be 31st. Here, a decision is required to be taken by the HR as to whether this employee will be paid for the 3 days worked in the current month at the end of the current month or the next month, along with the salary for the next month.

If the decision is in favor of the latter, then care has to be taken to put in place a notification to alert you, the HR, about this payment when the payroll for the next month is being processed. In case you go with the former option, then arrangements have to be made to add the new employee to the current month’s payroll without fail.

This decision then needs to be included in the policy and a process created around it to execute it smoothly.

3. Spread out the recovery of loans, salary advances, etc.

If an employee takes a loan or salary advance from the company, or recovery is due for a broken laptop, et cetera, the responsibility for collecting the amount owed to the company rests on you, the HR. You are, here, required to provide inputs to the payroll team as to the period over which the due amount is to be recovered.

Commonly seen are scenarios where it slips the HR’s mind to do this. The result is that the payroll team may decide to deduct the entire amount due from a single month’s salary. This affects the employee due to the possibly heavy impact on his/her net salary. It is the role of the HR to ensure that the employee in question receives sufficient take-home pay even after the necessary deductions are made.

Also keep statutory deductions and applicable wage-deduction rules in mind while planning recoveries. Loan, advance or other recoveries should be authorised, scheduled carefully and processed without disturbing mandatory payroll deductions or creating an avoidable shock to the employee’s take-home pay.

4. Complete salary revisions 15 days before the due date

Different companies may opt for different salary revision cycles. Sometimes this coincides with the work anniversary of the employee, at other times it may follow the financial year or vary based on the level or grade of the employee in question. Whatever the case, you need to plan to complete the process of arriving at the revisions for eligible employees around 15 - 20 days before the due date.

This time will be utilized to get budget sanctions, the necessary approvals from the employees’ business managers, and then to work with the payroll team to compute arrears, the impact on taxation and statutory contributions, recoveries, etc. The effective dates are also to be accounted for here if arrears are present.

Following this, the salary revisions (usually based on CTC) need to be translated to the salary structure of employees and the changes uploaded into the system. All this requires at the very least a week’s notice.

Apart from annual salary revisions, salaries may change in another scenario - with the confirmation of an employee. You need to be cognizant of this change and track it proactively with the help of the employee’s business manager. The effective date of salary change here may be the exact joining date of the employee. This information is to be collected by you and the necessary advice passed on to the payroll team.

5. Streamline tax declarations and proof collection

From April 2026, salary TDS is governed by the Income-tax Act, 2025. The new tax regime remains the default, while eligible employees can choose the old regime where applicable. HR and payroll teams should therefore collect declarations and supporting proofs only where they are relevant to the employee’s chosen regime and the employer’s TDS process.

Set an internal cut-off date that gives payroll enough time to validate eligible claims, recompute projected tax and communicate any material change in take-home pay before the final payroll of the tax year. The cut-off should follow the organisation’s payroll calendar rather than being treated as a universal statutory date.

With that, we wind up for now. However, this is by no means the end of the different areas where HR and payroll have to collaborate. Do watch this space for more!

Modern payroll automation can reduce many of these handoffs by connecting employee records, leave and attendance, salary revisions and tax inputs with payroll. In a full-suite HRMS, AI in HRMS can help HR retrieve information and complete routine tasks faster, while payroll teams use configured controls and anomaly reports to review payroll before closure.

Frequently Asked Questions

What information should HR validate before the monthly payroll cut-off?

HR should confirm active employees, joiners and leavers, salary changes, attendance and leave inputs, reimbursements, approved recoveries, arrears and any other employee changes that affect pay. A simple pre-payroll checklist can prevent many avoidable corrections later.

How should HR handle a new employee who joins after the payroll cut-off?

Define the treatment in advance. The employee may be added to the current payroll if timelines permit, or the unpaid amount may be processed as arrears in the next cycle. The important part is to document the rule and ensure the payment is not missed.

What should HR check before recovering a loan or salary advance through payroll?

Confirm the employee authorisation or applicable company policy, the recovery schedule, mandatory statutory deductions and the likely impact on take-home pay. Payroll should receive the recovery instructions before cut-off so the deduction is applied consistently and can be explained to the employee.

How early should salary revisions be shared with payroll?

There is no universal number of days. HR should allow enough lead time for approvals, salary-structure changes, arrears, tax impact and payroll validation before the effective date. The right cut-off depends on the organisation’s payroll calendar and approval process.

What changes for investment declarations and proofs under the 2026 tax rules?

For Tax Year 2026-27, salary TDS follows the Income-tax Act, 2025. The new regime is the default, while eligible employees may opt for the old regime. HR should collect only the declarations and proofs relevant to the employee’s chosen regime and payroll TDS computation.

About greytHR

greytHR is a full-suite HRMS trusted by 34,000+ organisations and 3.5 million+ employees across 30+ countries. This cloud-based platform helps businesses manage the complete employee lifecycle, including manpower planning, recruitment and onboarding, core HR, leave and attendance, timesheets, payroll and statutory compliance, performance and expense management, and exit. With built-in Agentic AI working across every module, HR teams can surface insights instantly and make data-driven decisions. greytHR is widely recognised for its dedicated in-house support team and strong Indian and GCC statutory payroll compliance.