Running Payroll - TalinoHR Docs

This guide covers the end-to-end process of running payroll in TalinoHR, from creating a payroll run through disbursement.

Payroll Run Lifecycle

Every payroll run follows this status progression:

DRAFT -> PROCESSING -> COMPUTED -> REVIEWED -> APPROVED -> DISBURSED -> CLOSED

Status	Description
DRAFT	Run created with period dates; no computation yet
PROCESSING	Engine is actively computing (transient state)
COMPUTED	All employee items computed; ready for review
REVIEWED	HR/Payroll has reviewed items; enters approval workflow
APPROVED	All approval steps completed; ready for disbursement
DISBURSED	Salaries have been released to employees
CLOSED	Run finalized and locked; no further changes

Creating a Payroll Run

Navigate to Payroll (/payroll) and click "New Payroll Run."

Required Information

Period Start - First day of the pay period
Period End - Last day of the pay period
Run Type - Usually REGULAR for normal payroll. Other types (THIRTEENTH_MONTH, ANNUALIZATION, LEAVE_MONETIZATION, FINAL_PAY) are created from their respective pages
Location (optional) - Scope the run to a specific branch. If blank, all active employees are included

Overlap Protection

The system prevents creating overlapping payroll runs. If a REGULAR run already exists for the same period (and location), you will be prompted to use the existing run instead.

Location-Scoped Runs

When a location is specified, only employees assigned to that location are included in the computation. This is useful for multi-branch companies that process payroll per office.

The 17-Step Payroll Engine

When you click "Compute," the engine runs through 17 steps for each employee:

Step 1: Fetch Employee Data

Loads the employee record with company settings, work schedule, active allowances, active deductions, and active loans.

Step 2: Compute Basic Pay

Derives the period's basic pay based on pay frequency:

Semi-monthly: monthlySalary / 2
Monthly: monthlySalary (full amount)
Weekly: dailyRate x workDaysPerWeek
Daily: dailyRate

The engine respects the employee's pay basis (MONTHLY, DAILY, HOURLY) and uses the work schedule to derive workDaysPerMonth and workHoursPerDay via getScheduleParams().

Step 3: Fetch Attendance Records

Retrieves all attendance records for the employee within the pay period.

Step 4: Compute Attendance Deductions

Calculates deductions for:

Late minutes - Converted to hourly rate deduction
Undertime minutes - Same as late
Absent days - Full or half-day deduction at daily rate
Unpaid leave - Days on unpaid leave types count as absent

Paid leave days are excluded from deduction calculations.

Step 5: Compute Overtime Pay

Reads approved OvertimeApplication records for the period. Each overtime entry is computed using DOLE multipliers based on the day type:

Ordinary day: 125%
Rest day: 130%
Special non-working holiday: 130%
Special non-working holiday + rest day: 150%
Regular holiday: 200%
Regular holiday + rest day: 260%

Step 6: Compute Holiday Pay

Processes all holidays in the pay period. For each holiday:

Determines if the employee worked or not
Checks if the day is also a rest day (double premium)
Applies the day-before-holiday rule (Art. 94, Labor Code): if an employee was absent on the nearest preceding workday without leave, they forfeit regular holiday pay

Step 7: Compute Night Differential

10% premium for hours worked between 10:00 PM and 6:00 AM. Night differential stacks on the day-type multiplier (e.g., NSD on a regular holiday uses the holiday rate as base, not just the ordinary rate).

Step 8: Compute Allowances

Sums all active recurring allowances assigned to the employee.

Step 8.5: Consume Payroll Adjustments

Reads PENDING PayrollAdjustment records (created by personnel actions like merit increases or promotions). These are added to the otherEarnings component and marked as APPLIED after the payroll item is upserted.

Step 9: Compute Gross Pay

grossPay = basicPay - attendanceDeductions + overtimePay + holidayPay + nightDiffPay + allowances + otherEarnings

Step 10: Compute SSS Contribution

Looks up the SSS bracket based on derived monthly salary. Splits the contribution if semi-monthly.

Step 11: Compute PhilHealth Contribution

5% of monthly salary, split 50/50 employee/employer. Applies floor (P10,000) and ceiling (P100,000). Splits if semi-monthly.

Step 12: Compute Pag-IBIG Contribution

2% employee / 2% employer for salaries over P1,500. Ceiling of P10,000 monthly base. Splits if semi-monthly.

Step 13: Compute Withholding Tax

Uses TRAIN Law brackets to compute tax on taxable income (gross pay minus government contributions).

Step 14: Compute Loan Deductions

Deducts installments from active loans. Creates LoanPayment records, updates loan balances, and auto-closes loans when fully paid.

Step 15: Compute Other Deductions

Sums all active recurring deductions assigned to the employee.

Step 16: Compute Total Deductions

totalDeductions = SSS + PhilHealth + PagIBIG + withholdingTax + loanDeductions + otherDeductions

Step 17: Compute Net Pay

netPay = grossPay - totalDeductions

Reviewing Payroll Items

After computation, navigate to the payroll run detail page (/payroll/[id]) to review individual employee items.

What to Check

Verify basic pay amounts match employee records
Check attendance deductions against DTR records
Confirm overtime amounts match approved OT applications
Review holiday pay entries (especially day-before-holiday rule deductions)
Validate government contribution amounts
Check loan deduction amounts against active loans

Computation Details

Each payroll item stores detailed computation breakdowns in the computationDetails field, including overtime breakdown (per date, hours, day type, multiplier, amount), holiday breakdown, night differential breakdown, and loan payment details.

Manual Adjustments

You can add manual adjustments to a payroll run while it is in DRAFT or COMPUTED status.

Navigate to the payroll run detail page and use the adjustment dialog to add:

Earnings - Additional compensation not captured by the engine
Deductions - Additional deductions

Adjustments are tracked with a full audit trail. The adjustment history shows who made each change and when.

After adding adjustments, recompute the payroll to incorporate the changes into the final calculations.

Recomputation

If you need to recalculate after making changes:

Navigate to the payroll run detail page
Click "Recompute"

The recomputation process:

Reverses all loan payments from the previous computation
Resets APPLIED payroll adjustments back to PENDING
Re-runs the full 17-step engine for all employees
Re-applies adjustments and re-creates loan payments

Recomputation is only available for runs in COMPUTED status.

Approval Workflow

When the payroll is reviewed and ready, advance the status to REVIEWED. This triggers the approval workflow.

How Approval Works

The approval chain is configured in ComplianceSetting with the key payroll-approval-chain. The default chain is:

PAYROLL_ADMIN reviews and approves
HR_ADMIN gives final approval

Each step creates a PayrollApprovalStep record. Approvers can approve or reject at each step.

SUPER_ADMIN users bypass the chain and can approve at any stage.

Rejection

If any approver rejects, the run returns to COMPUTED status for corrections. The rejection reason is recorded in the audit log.

Bank File Export

Once a payroll run is APPROVED or DISBURSED, you can export a bank file for salary crediting.

Navigate to the payroll run detail page and click "Export Bank File." This generates a CSV with:

Employee number
Employee name
Bank name
Bank account number
Bank account name
Net pay amount

The CSV is formatted for upload to your company's banking portal.

Payslip Delivery

After the payroll run is approved, you can send payslips to employees via email.

Email Delivery

The system generates HTML payslips and sends them via Mailjet. Each payslip includes:

Employee and company details
Pay period information
Earnings breakdown (basic pay, overtime, holiday pay, night differential, allowances)
Deductions breakdown (SSS, PhilHealth, Pag-IBIG, withholding tax, loans)
Net pay
Year-to-date totals
Bank details

Password Protection

Payslips can be password-protected using the configured password scheme (stored in ComplianceSetting payslip-password-scheme). The default scheme combines the employee's last name with their birth date.

Payroll Register

Navigate to the payroll run detail page and click "Download Register" to export a comprehensive payroll register.

The register is a CSV with all payroll items in the run, including all earnings, deductions, government contributions, and net pay for each employee, plus totals.

Audit Trail

Every payroll action is automatically logged in the PayrollAuditLog:

Run creation and deletion
Status changes
Recomputation events
Item adjustments
Approval step actions (approved/rejected)
Payslip delivery

Navigate to the payroll run detail page to view the full audit history with timestamps and user details.

Common Issues

Employee Missing from Payroll Run

Check that the employee is active (not RESIGNED/TERMINATED/RETIRED)
If the run is location-scoped, verify the employee is assigned to that location
Ensure the employee's hire date is before the period end

Incorrect Daily Rate

Verify the employee's pay basis (MONTHLY/DAILY/HOURLY)
Check the assigned work schedule's work hours and days
For HOURLY employees, the daily rate is hourlyRate x workHoursPerDay (always rounded to 2 decimal places)

Government Contributions Not Computing

Ensure the SSS, PhilHealth, and Pag-IBIG contribution tables are loaded in the database
Verify the employee has a valid monthly salary equivalent above the minimum threshold