How to Run Payroll for a Small Business
Running payroll involves 8 steps: collect attendance, calculate gross pay, apply deductions, compute net pay, generate payslips, disburse payments, file statutory reports, and archive records. Full guide below.
The 8-step payroll process
- Collect attendance data. Pull hours worked from your attendance system. Break down into regular hours, overtime, weekend, and holiday hours.
- Calculate gross pay per employee. Salaried: monthly salary + bonuses + allowances. Hourly: (regular hours × rate) + (overtime hours × rate × multiplier) + allowances.
- Apply deductions. Tax withholdings, insurance premiums, loan repayments, salary advances, and any other authorized deductions.
- Calculate net pay. Net = Gross minus all deductions. This is what the employee receives.
- Generate payslips. Detailed document per employee: gross breakdown, deductions, net pay, year-to-date totals, employer contributions.
- Disburse payments. Transfer net pay to employee bank accounts. Bulk bank transfers are faster than one-by-one.
- File statutory reports. Submit tax withholdings and any required government filings on time.
- Archive records. Keep payslips and payroll data for 5+ years for compliance.
How long does payroll take?
| Method | Time per month (10 employees) |
|---|---|
| Manual (spreadsheet) | 4–8 hours |
| Semi-automated (accountant) | 2–4 hours |
| Fully automated (Zilonex) | 15–20 minutes |
Run payroll in 15 minutes
Zilonex pulls hours from attendance, applies overtime and deductions, generates payslips. All automated.
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