Running Payroll — The Payrun Process

The payrun is the monthly (or periodic) process of calculating employee salaries, applying deductions, accounting for attendance and leave, and generating the payroll records that feed into payslips and bank transfers. It is the core operational workflow of the Payroll module.

This chapter walks through the complete payrun lifecycle — from creating a new payrun to finalizing and approving it.

What You Will Learn

• What a payrun is and the payrun lifecycle
• How to create a new payrun
• How payroll records are generated for each employee
• How to review and adjust individual records
• How attendance, LOP, and reimbursements are factored in
• How to process and approve the payrun
• How payroll rounding works
• How pay schedule settings affect the payrun
• How to view payrun history

Prerequisites

Required: The following must be configured before running payroll:

• Salary components and salary structures (Chapter 26, Chapter 27)
• Employees assigned to salary structures with component amounts
• Attendance data processed for the payroll month (if attendance-based payroll is used)
• Leave data up to date (approved/rejected requests finalized)
• Statutory settings configured (PF, ESI, PT, TDS — see Part 7)

Understanding the Payrun Lifecycle

A payrun in Udyamo HRMS moves through a series of statuses:

Status Flow

Create       Generate       Process       Approve       Mark Paid
  |              |              |              |              |
  v              v              v              v              v
Draft -------> Generated ----> Processed ----> Approved ----> Paid

Warning: Once a payrun is moved to Processed status, individual payroll records cannot be edited. Ensure all adjustments are made during the Generated stage.

Navigating to Payruns

To access payruns:

1. Click Payroll in the left sidebar.
2. Select Payruns (or Run Payroll).

The Payruns page lists all existing payruns with their month, status, and summary statistics.

Step 1: Creating a Payrun

To create a new payrun:

1. Navigate to Payroll > Payruns.
2. Click Create Payrun (or New Payrun).
3. Fill in the payrun details:

4. Click Create.

The payrun is created in Draft status.

Tip: Create the payrun after attendance and leave data for the month have been finalized. Running payroll with incomplete attendance data leads to inaccurate LOP calculations and requires corrections later.

Step 2: Generating Payroll Records

Once the payrun is in Draft status:

1. Click Generate Payroll (or Calculate).
2. The system processes each eligible employee and generates a PayrollRecord containing:

3. The payrun status changes to Generated.

How the System Calculates Each Record

For each employee, the system performs these calculations:

1. Determine working days — Total calendar days minus weekly offs and holidays for the employee's office.

2. Determine paid days — Working days minus LOP days.

3. Calculate pro-rata earnings — If the employee has LOP days or joined/left mid-month:

   Pro-rata amount = (Monthly component amount / Working days) x Paid days

4. Calculate percentage-based components — HRA, PF, ESI, etc. are calculated on the pro-rata Basic or Gross as applicable.

5. Apply statutory calculations — PF, ESI, Professional Tax, and TDS are computed based on current rates and the employee's declarations.

6. Sum earnings — Gross Pay = Total of all earning components.

7. Sum deductions — Total Deductions = Total of all deduction components.

8. Calculate net pay — Net Pay = Gross Pay - Total Deductions.

Step 3: Reviewing Employee-Wise Breakdown

After generation, review each employee's payroll record:

1. On the payrun page, the list of all employee records is displayed.
2. Click on an employee's name to view the detailed breakdown.
3. The breakdown shows:
   • Each earning component with its calculated amount
   • Each deduction component with its calculated amount
   • Paid days and LOP days
   • Any reimbursements included
   • Net pay

Review Checklist

Tip: Sort the records by Net Pay (ascending) to quickly spot outliers — employees with unusually low or zero net pay may have data issues that need attention.

Step 4: Adjusting Individual Records

During the Generated stage, you can make adjustments:

Skip Payroll

To exclude an employee from the current payrun:

1. Open the employee's payroll record.
2. Toggle the Skip Payroll option.
3. Click Save.

The employee's record will not be included in the processed payroll. Use this for:

• Employees on long leave without pay
• Employees whose salary data is incomplete
• Employees being processed in a separate off-cycle payrun

Adjusting LOP Days

If the LOP day count is incorrect (e.g., attendance was not properly recorded):

1. Open the employee's payroll record.
2. Edit the LOP Days field.
3. The system recalculates the pro-rata salary and all dependent components.
4. Click Save.

Including Reimbursements

If approved reimbursements are pending for the month:

1. The system automatically includes approved reimbursements in the payroll.
2. Review the reimbursement amounts in each employee's record.
3. Reimbursements appear as a separate line item (not part of the standard salary components) and are added to the net pay.

Warning: Only reimbursements that have been fully approved appear in the payrun. Ensure the reimbursement approval workflow is complete before generating payroll. See Chapter 37: Reimbursements.

Step 5: Syncing Attendance Data

If you need to refresh the payrun with updated attendance data:

1. Navigate to the payrun page.
2. Click Sync Attendance (or Refresh Attendance Data).
3. The system recalculates paid days and LOP days for all employees based on the latest attendance records.
4. Payroll records are recalculated accordingly.

Tip: Sync attendance data if you notice discrepancies in LOP days during the review stage. This is especially useful if attendance corrections were made after the initial payroll generation.

Step 6: Processing the Payrun

Once all records have been reviewed and adjusted:

1. Click Process Payroll (or Finalize).
2. The system locks all individual records — no further edits are possible.
3. The payrun status changes to Processed.

At this point, the payroll data is final and ready for approval.

Warning: Processing is irreversible. Double-check all records before clicking Process. If you discover an error after processing, you will need to use an off-cycle payrun to make corrections. See Chapter 30: Off-Cycle Payroll & Corrections.

Step 7: Approving the Payrun

The approval step provides an additional checkpoint before salary disbursement:

1. An authorized approver (typically a senior HR administrator or finance head) reviews the processed payrun.
2. The approver checks the total payroll cost, headcount, and any flagged records.
3. Click Approve.
4. The payrun status changes to Approved.

Approval Summary

The approval screen typically displays:

Tip: Compare the total net pay with the previous month to spot significant variances. Large differences may indicate data errors (e.g., a new joiner with an incorrect salary structure, or an employee incorrectly marked for LOP).

Payroll Rounding

The payroll_round_up setting controls how decimal values are handled in payroll calculations.

Configuration

1. Navigate to Settings > Payroll Setups.
2. Locate the Payroll Round Up setting.
3. Set the number of decimal places (0 to 5).
4. Click Save.

Rounding Behavior

Tip: Most Indian organizations use 0 (whole rupees) for the final net pay. This avoids fractional amounts in bank transfers. Component-level calculations may use higher precision internally, with rounding applied at the net pay level.

Pay Schedule

The pay_schedule setting defines the expected pay day for your organization.

Configuration

1. Navigate to Settings > Payroll Setups.
2. Locate the Pay Schedule (or Pay Day) setting.
3. Set the pay day (e.g., last working day of the month, 1st of the following month, 7th of the following month).
4. Click Save.

The pay schedule does not affect calculations but serves as a reference for:

• Employees expecting their salary on a specific date
• Bank advice generation timing
• Payroll processing deadlines

Viewing Payrun History

To view past payruns:

1. Navigate to Payroll > Payruns.
2. The list shows all payruns with their month, status, and summary.
3. Click on any payrun to view its details, including individual employee records.
4. Use filters to search by month, status, or payrun type.

Payrun History Table

Complete Payrun Checklist

Use this checklist to ensure a smooth payroll cycle each month:

Troubleshooting Common Payrun Issues

Best Practices

1. Establish a payroll calendar. Define cutoff dates for attendance, leave, and reimbursement submissions. Share this calendar with all employees and managers.
2. Process payroll in the same sequence each month. Consistency reduces errors and makes the process predictable for the HR team.
3. Review before processing. The most common payroll errors are caught during the review stage. Never skip it.
4. Keep a backup. Export the generated payroll data before processing, so you have a reference if questions arise later.
5. Document exceptions. If you manually adjust any record (LOP days, skip payroll, etc.), note the reason for audit purposes.

What Comes Next

With the payrun processed and approved, the next steps are generating payslips for employees and creating bank advice for salary disbursement. Proceed to Chapter 29: Payslips & Bank Advice.