Monthly Payroll Checklist
A monthly payroll checklist for small businesses: collect changes, run and review payroll, pay salaries and file withholdings, with a second-person check.
- Typical schedule monthly
- The checklist 4 sections, 20 items
- Variables
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Use this checklist for every regular payroll run, whether you use payroll software, an outsourced payroll provider or a spreadsheet and your bank. It covers the monthly cycle from collecting changes to paying salaries and filing withholdings. Off-cycle payments, such as a final salary for a leaver, can use the same checklist with the irrelevant steps skipped.
Who owns it
Payroll is usually owned by the person in HR or finance who submits the run. A second person, often the finance lead or a founder, approves the payroll register and releases the bank payment. Keep those two roles separate wherever the team is big enough. That split is the main control against errors and fraud.
Common pitfalls
- Changes that arrive after the cut-off. New hires, leavers, raises and unpaid leave reported late cause corrections next month. Publish a fixed cut-off date and stick to it.
- Reviewing totals only. A total close to last month can hide one wrong salary. Compare each employee to the previous month and explain every difference.
- Bank details changed by email. Requests to change an employee's bank account are a common fraud route. Confirm them through a second channel.
- Missing filing deadlines. Withholding tax and social security deadlines differ by country and are often earlier than people expect. Put the dates in the run.
Schedule the run a week before payday so there is time for review. Adapt this to your jurisdiction and your payroll provider; it is a practical checklist, not legal or tax advice.
The checklist: Payroll run {{month}}
Collect changes
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Confirm new hires for
{{month}}have signed contracts, tax details and bank details on file -
Confirm leavers, final pay dates and any payout of unused holiday
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Collect salary changes, promotions and approved bonuses with written approval
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Collect overtime, commissions and allowances approved by managers
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Collect unpaid leave, sick leave and parental leave affecting pay
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Verify any bank detail changes by calling the employee on a known number
Never accept a bank change only on the strength of an email, even from an internal address.
Run payroll
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Enter all changes in the payroll system (e.g. Gusto, Deel, Bexio, Personio, or your provider's portal)
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Run the draft payroll for
{{month}} -
Compare the draft register to last month, employee by employee, and explain every difference
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Check deductions: income tax withholding, social security, pension and benefits
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Check expense reimbursements included in payroll match approved expense reports optional
Approve and pay
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Second person reviews and approves the payroll register
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Confirm sufficient funds in the payroll bank account before payday
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Release salary payments so they arrive on the agreed payday
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Send payslips to employees through the agreed secure channel
File and record
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File withholding tax and social security returns for
{{month}}by their due dates -
Pay withheld taxes and contributions to the authorities and funds
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Post the payroll journal to the general ledger
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Reconcile payroll liability accounts to zero after the payments clear
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Store the payroll register, approvals and filings in the payroll archive
Checklist as Markdown
Frequently asked questions
What are the main steps in processing payroll?
Collect the changes for the period, enter them, run a draft and review it against the previous period. Then a second person approves it, salaries are paid and payslips sent, and withholdings are filed and paid to the authorities. Finally, the payroll journal is posted and the liability accounts are reconciled.
How do I avoid payroll mistakes?
Use a fixed cut-off date for changes, compare every employee's pay to the previous month rather than only the total, and have someone other than the preparer approve the register. Most payroll errors come from late or undocumented changes, so require written approval for every change to pay.
Should a small business outsource payroll?
Outsourcing helps when you have staff in several countries or little in-house knowledge of local rules, because the provider keeps up with tax tables and filing formats. You still own the inputs and the approval. Keep this checklist even with a provider, since most errors start with the data you send them.
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