HR Payroll Audit Checklist

Payroll is one of the critical function in HR department and plays critical role in organisation functioning so here are in this post I will share Payroll audit checklist that one can consider while doing HR audit. If you want other audit checklists then you can check my blog where I shared audit checklists of many functions in an organisation.

HR Payroll audit Checklist:

Payroll is one of the key function of HR Department and it is key to organisation as well. Below are some HR audit checkpoints related payroll function.

• Save Print

  • Check compliance to regulations such as Income tax, ESI, PF, Gratuity, Bonus. ( You can create several checkpoints within these acts only regarding calculation, due dates , applicability etc.)
  • Check TDS deductions and returns along with reconciliations
  • Check reimbursement policies.
  • Check how HR department validate authentication of supporting documents related to  reimbursements and Income tax deductions.
  • Check leave encashment and leave policy and its impact on salary
  • Check how attendance is validated and suggest if their is any possibility of automation
  • Check calculation of variable pay (if any).
  • Check calculations related to provision made for gratuity and other regulatory payouts.
  • Check Sample salary figures with that in offer letter.
  • Check approval of HR head before final payment of salary
  • Check BR for authorisation of salary payments
  • Check protection of Payroll data and it must be with only authorised personal.
  • Check the use of softwares in processing Salary
  • Check leave trends and authorisations
  • Check Salary payouts as per annual budgeting
  • Check whether their is a SOP for functioning of Payroll function. If not, then suggest one
  • If payroll is outsourced then you have to keep extra checkpoints regarding agreement, payouts, data protection etc.

So I tried to cover checkpoints from payroll function of HR department but still there are lot of checkpoints still left in this HR audit checklist. Do comment below some more points below that I missed in this post.

Thank You !!