Payroll policy and procedures manual

What the payroll policy and procedures manual gives you

When payroll depends on one person's memory, it breaks the day they are away. This manual writes down how your payroll is run: who does what, the monthly timetable, how pay is calculated, who approves it, how it is paid, how statutory amounts are remitted and how records are kept, with blanks to fill in and a controls checklist for the owner.

Who it is for

Business owners, finance managers and HR officers who want payroll documented, controlled and easy to hand over.

How to use it

1. Fill in the roles, dates and systems used in your business.
2. Adjust each procedure to match how you really work.
3. Have the owner or finance head approve the manual.
4. Train anyone who touches payroll, and review the manual each year.
5. Keep a signed or dated copy with your records, so you can show what was agreed or done.

What is inside

• Roles and responsibilities
• Monthly payroll timetable
• Calculation, approval and payment procedures
• Statutory remittance procedure
• Record keeping and controls checklist

The document is a ready-to-print PDF with these parts: 1. Purpose and scope, 2. Roles, 3. Monthly timetable, 4. Changes to pay and bank details, 5. Calculation, 6. Remittances and records, 7. Controls checklist for the owner. It is laid out for A4, with the headings, tables and tick boxes already in place, so you can print it and fill it in by hand, or type into it with a PDF editor.

Tips for getting it right

• Separate the person who prepares payroll from the one who approves it.
• Restrict who can change salaries and bank details.
• Reconcile payroll to the ledger every month.
• Test the procedure by letting a colleague follow it.

Why it helps

Staff records go wrong in small, repeated ways: a figure typed twice, a deadline forgotten, a promise that nobody wrote down. A tidy workbook that everyone uses the same way removes most of those problems. It also gives you something to show an employee, an auditor or a labour officer when a question comes up months later, and it makes the next payroll quicker because the facts are already in one place.

Questions people ask

Can I edit it? It is a PDF, so it is meant to be printed and completed, or filled with a PDF editor. If you want to change the wording, copy the text into Word or Google Docs and adapt it to your business.

Is it legal advice? No. It is a practical starting point written for Kenya. Rules change, so check the current position and ask a professional where the stakes are high.

Will it work on my phone? Yes for reading. For filling in and printing, a computer or a PDF app works best.

Keeping it safe and up to date

Payroll records are personal data and tax records at once, so keep the file somewhere only the people who need it can open, and keep each month's copy for at least five years. Statutory rates such as NSSF limits and the Housing Levy change, so check the Rates sheet against the official source before you rely on a figure.

Read how to run payroll for a small business for the wider picture. Free calculators that go with it: Paye calculator. See more payroll templates or ask us for a custom one.

This document is general information, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

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