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To the best of my knowledge when I was still an employee at a private firm, the HR provides the Accounts dept all staff information as regards stated monthly salary, date of resumption, fines and allowances due to staff....which the Accounts dept processes and reflect these info in the monthly salaries of the staff. Then the personal incomes taxes and loans/IOU are solely inculcated into the payroll by the Accounts dept without input from the HR dept. So in essence, they work together in preparing payroll.

The finance manager is to
track,
account and
provide recommendations for all companies financial transaction while the HR key responsibility is recruiting, training, compensating and working out modalities for staff effectiveness and retention.

Anything payroll should be Left for HR to oversee.

Payroll is not accounting! It's workers motivation and entitlement. HR has the ultimate say. Of course the accountant can keep working numbers but HR has to decide who gets paid what. And for the case of litigation it's best HR are hired for payroll management as they can properly defend the document and the company.

QuinModah:
HR Manager (HRM) and Finance Manager (FM): Controversial issue on payroll management.

There has been recent controversial issue between HRM and FM on who to manage payroll process for a newly established organization. Below is the discussion among CEO, FM and HRM.

CEO: As we all aware that this is the first management meeting of this newly established company. Please HRM share update on staff matters with management team.

HRM: Thank you CEO. We have successfully recruited 15 staff and I am working on their payroll for this month. Immediately I'm done, I would bring it to your table for final approval before forwarding to Finance Manager for payment.

FM: Please HRM, we need to get it right from inception especially on payroll management. If I may ask, I have few questions on your submission.

HRM: Please go-ahead FM.

FM: Please are you aware about latest Finance Act, 2020 which gives ways to new computation of Personal Income Tax (PIT) popularly called PAYE? Also, are you the one to be responsible for annual returns and tax audit with IRS. Finally, other parameters of payroll such pension, NHF, ITF and NSITF should be adequately managed to avoid fine and penalty.

HRM: Kindly note that payroll has to do with staff matter and anything that falls within this category, it is solely handled by HR. Also, on all your questions, we would take cognizance of it and revert if there is any clarification.

FM: Alright but you also need to take note of staff IOUs and advances that might have been posted into various staff accounts on SAP.

HRM: If you want to handle that responsibility, I might shift it to you for proper management as you claimed.

CEO: No at this moment, I intentionally allowed you guys to justify your positions. However, kindly do more consultation with various professionals in different industries and revert in the next meeting.

Please share your view on who to manage payroll.

I feel after the finance manager has prepared the payroll of all the staff cum taxes, pension and what have you, the HRM ensures every staff is captured in the payroll and get what they are supposed to get...
Also, any staff that has any financial complaints goes to the HRM who in turn draws the attention of the financial manager.

Pojomojo:
First, Why do both managers need to fight on who to manage Payroll when it is actually the responsibility of both parties to ensure that all staff salaries and allowances are paid accurately, and as and when due.

Payroll Management overlaps between HRM and FM, however, given that HRM is the People Business Partner, we can deduce that the primary responsibility of ensuring that all staff get what is due to them as compensation lies with the HRM.

For Preparation of the Payroll, it is better that the process is managed by the HRM given that it has all information regarding entry and exit of staff, as well as, who deserves to get what, from time to time.

The FM comes in when it comes to establishing the processes (building the Payroll Sheet or System) and advising on necessary developments as it relates to statutory compliance on a regular basis.

In practice, from both my local and international experience, I have seen that the HRM manages Payroll, while the FM reviews and disburse accordingly.

Given my above points and practical experience, I'd say the primary responsibility of Payroll Management falls on the lap of the HRM with the FM providing necessary and strategic reviews and input from time to time.

In practice, there is no way the HRM can compute and file tax returns nad defend the file during tax audit. Hence, what i have seen is that the HRM first works on the salary sheet using his information on attendance,leave etc. he then forwards the file to FM for other computations and deductions like IOUs before proceeding to disburse.

Computation of salaries for staff for their respective grades = HR


Payment of salaries = Finance dept.


Everyone goes home happy.


I don't like long stories please.

All

Cutehector:
Salaries= HR

Payroll management is not only about salaries, it also covers accuracy in calculating tax, pension and other statutory deductions which the FM is better placed to handle otherwise you'd be overpaying or underpaying staff and the Government which is a risk to the company.

So in reality in most structured organizations, it is a joint responsibility between HRM who provide the source data and FM who finalizes the report with the deductions and net disbursements due to staff.

You can choose to organize your company however you want. However HR and payroll is a violation of standard internal control system. The people doing the hiring should not be the people processing the payment. You are giving room for ghost workers payment.

HR hire staff, determine entitlement and then advise Finance who process the payroll. the payroll specialist don't just process payment. He ensure that the payment is backed up by necessary approval and documentation like the board approval for the hiring. the approval for the promotion etc.

check internet for typical HR and accounting org char payroll is always in account. the following were copied from the internet

Let’s HR make available copies of employees offer
letters where the gross income is clearly stated to finance and updates finance on staff turnover and promotions . That’s all HR needs to do. Finance will now use the above information to prepare payroll.

Finance must also make payslip available to staff members. This shows the movement of the gross income to net which will eventually hit employees accounts.

Therefore payroll mgt is the job of Finance but not without the HR input.

Depends on the size of company. In the companies I have worked in, a HR staff trained in payroll management handles it. I think that's best. There's a lot to payroll than just finance. Non financial benefits (continuing education, health insurance etc) are already handled by HR so why not bundle it all.

HR does the payroll calculations, manages the earnings and deductibles based on different variables, manages overtime pay, etc. while finance does the journalization. On the HR side, not all payable are cash. Some can be kind as well and the finance team might not be able to handle that. On the finance side, normally, a single ledger account is used for each earning code (basic, housing, transport, etc) regardless of grade. So at the finance level, the sum of all the housing paid to employees is credited to the housing expense account while the employee is debited (either by debiting banks directly or using an intermediate account for each employee for better reporting).

In summary, the HR prepares the payroll and gives it to finance to journalize. A good system should be able to automatically create your payroll and produce the resulting journal entries at the end ready to be posted once reviewed by the finance manager.

Dijita:
1) You can choose to organize your company however you want.

2) However HR and payroll is a violation of standard internal control system. The people doing the hiring should not be the people processing the payment. You are giving room for ghost workers payment.

3) check internet for typical HR and accounting org char payroll is always in account. the following were copied.

1) You can organize your organization however you want, but there's something called best practices.

2) They both manage the payroll at different levels like I explained above. Payroll management is an area of specialization is HR studies. You are right that the hiring team should not have anything to do with pay for the sake of checks and balances. However, you forgot that HR is made up of multiple units. The talent management team handles recruitment and training while the payroll team prepares the payroll which includes cash and kind compensations. For example, the finance team may not need to know whether an employee opted for pay in lieu of vacation because HR will enter the vacation days worked as extra days in the month, and the same accounting entries will be made at the ledger level by the finance team. Another good is example is proprations.

3) What the finance team typically manages is payroll accounting, not the preparation. Like I explained above, there are two different things. Anything employee-facing is HR. It is thier duty to ensure employees are paid fairly and in time. Finance should not have to deal with employees directly. When you have payroll issues, you walk up to your HR. As a rule of thumb, the finance team only manages payroll preparation if and only if the organization is not big enough to have a payroll unit in HR.

Rubyjade:
educative................ My sis once worked in a place where she earn 130k gross but her net was 114 and some fractions and I told her they are cheating her. She said they pay pension, NHS and PAYE, even at that I still told her net should be around 121 and some fractions. This will ONLY happen in an organisation where the HR does not understand the finance act 2020

Do they really care?

900warriorz:
FM and HR are to work together on payroll administration. They both have crucial parts to play in it.

You are right.

HR should prepare the Pay Advice, while the FM should compute the payroll and upload file for payment.

The HR like work sha.

aviara:
HRM computes hours worked and other staff entitlements and communicates this to FM who will work on it to accommodate other statutory deductions before forwarding it to the CEO for final approvals.

So the process lies between the HRM and FM and also serves as checks and balance to avoid fraud

QuinModah, here is your answer.

ednut1:
tax of 9k on 130k. What are you smoking bro

He's actually right. First 300,000 is 7%.

Payroll calculations are strictly finance , because of pension taxes PAYE and other statutory deductions which HR doesnt know about,
HR will provide attendance records, intakes , leavers & joiners and advise who is confirmed and who isnt etc , then finance do they calculation and present to the CEO and MD for approval.

if you do it any other way. if any problems happens with LIRS or FIRS you are on ur own. some tax mistakes can be costly and lead to huge fines & penalties because HR is strong headed.

Finance has full responsibility for payroll, HR has partial responsibility
HR advises Finance on payroll info. Shikena, but ultimately it is finance responsibility HR JUST SUPPORTS.

ThierryJay:
Payroll management is not only about salaries, it also covers accuracy in calculating tax, pension and other statutory deductions which the FM is better placed to handle otherwise you'd be overpaying or underpaying staff and the Government which is a risk to the company.

So in reality in most structured organizations, it is a joint responsibility between HRM who provide the source data and FM who finalizes the report with the deductions and net disbursements due to staff.

you are right...i just booked space to come and put in more words

Pojomojo:
First, Why do both managers need to fight on who to manage Payroll when it is actually the responsibility of both parties to ensure that all staff salaries and allowances are paid accurately, and as and when due.

Payroll Management overlaps between HRM and FM, however, given that HRM is the People Business Partner, we can deduce that the primary responsibility of ensuring that all staff get what is due to them as compensation lies with the HRM.

For Preparation of the Payroll, it is better that the process is managed by the HRM given that it has all information regarding entry and exit of staff, as well as, who deserves to get what, from time to time.

The FM comes in when it comes to establishing the processes (building the Payroll Sheet or System) and advising on necessary developments as it relates to statutory compliance on a regular basis.

In practice, from both my local and international experience, I have seen that the HRM manages Payroll, while the FM reviews and disburse accordingly.

Given my above points and practical experience, I'd say the primary responsibility of Payroll Management falls on the lap of the HRM with the FM providing necessary and strategic reviews and input from time to time.

Your analysis are very valid without being debatable or argued...

dfrost:
He's actually right. First 300,000 is 7%.

first 300k is annual not monthly. I did taxes as an auditor and accountant.

QuinModah:
HR Manager (HRM) and Finance Manager (FM): Controversial issue on payroll management.

There has been recent controversial issue between HRM and FM on who to manage payroll process for a newly established organization. Below is the discussion among CEO, FM and HRM.

CEO: As we all aware that this is the first management meeting of this newly established company. Please HRM share update on staff matters with management team.

HRM: Thank you CEO. We have successfully recruited 15 staff and I am working on their payroll for this month. Immediately I'm done, I would bring it to your table for final approval before forwarding to Finance Manager for payment.

FM: Please HRM, we need to get it right from inception especially on payroll management. If I may ask, I have few questions on your submission.

HRM: Please go-ahead FM.

FM: Please are you aware about latest Finance Act, 2020 which gives ways to new computation of Personal Income Tax (PIT) popularly called PAYE? Also, are you the one to be responsible for annual returns and tax audit with IRS. Finally, other parameters of payroll such pension, NHF, ITF and NSITF should be adequately managed to avoid fine and penalty.

HRM: Kindly note that payroll has to do with staff matter and anything that falls within this category, it is solely handled by HR. Also, on all your questions, we would take cognizance of it and revert if there is any clarification.

FM: Alright but you also need to take note of staff IOUs and advances that might have been posted into various staff accounts on SAP.

HRM: If you want to handle that responsibility, I might shift it to you for proper management as you claimed.

CEO: No at this moment, I intentionally allowed you guys to justify your positions. However, kindly do more consultation with various professionals in different industries and revert in the next meeting.

Please share your view on who to manage payroll.

FM. That it is the practice in most organisations. FM was making a strong point. HRM is to update staff list and appropriate renumeration periodically. FM handles the rest.

ednut1:
first 300k is annual not monthly. I did taxes as an auditor and accountant.

So what's the difference, our expert? I'll love to learn.

ThierryJay:
Payroll management is not only about salaries, it also covers accuracy in calculating tax, pension and other statutory deductions which the FM is better placed to handle otherwise you'd be overpaying or underpaying staff and the Government which is a risk to the company.

So in reality in most structured organizations, it is a joint responsibility between HRM who provide the source data and FM who finalizes the report with the deductions and net disbursements due to staff.

Beautiful!!!

dfrost:
So what's the difference, our expert? I'll love to learn.

using your wrong computation he will only be subject to 7% tax. See below is annual which will be divided by 12 after adding up all

Rubyjade:
educative................ My sis once worked in a place where she earn 130k gross but her net was 114 and some fractions and I told her they are cheating her. She said they pay pension, NHS and PAYE, even at that I still told her net should be around 121 and some fractions. This will ONLY happen in an organisation where the HR does not understand the finance act 2020

Funny dude

I work in a public service in Edo State and my salary is 150k and at the end of the month, I do receive 135k, where the balance go for PAYE, Health, Housing and the likes

Following

ednut1:
using your wrong computation he will only be subject to 7% tax. See below is annual which will be divided by 12 after adding up all

Look at what you quoted earlier. The comment said the relative was earning 130,000. What your computation on that? And please desist from saying wrong or right, only kids do that. Winning argument doesn't make you intelligent or a genius.

Saying proper analysis or that's not the way it's computed makes you sound mature.

The HR software is both managed by the FM and HR as below:

Salary, leave allowance, loans etc computation module should be handled by the FM. Suffice to say that, the HR is expected to forward all staff's employment letter to the FM so as to input the salary details into the software Viz-a-viz the statutory deductions and remittance

Employment History, Leave period, birth date and every other staff records should be handled by the HR on the system.

Note that depending on the configuration of the HR software, the HR should not be authorized to access the computation 'page' of the software while the FM should not also has access to the record keeping 'page' as well.

Everything staff PAYEE, PENSION, NSITF deduction liabilities are paid by the company, the FM is expected to forward such evidence to the HR for proper record keeping snr update.

Regards

fados4sure:
Funny dude

I work in a public service in Edo State and my salary is 150k and at the end of the month, I do receive 135k, where the balance go for PAYE, Health, Housing and the likes

That's total for PAYE, Health, NHF, Pension. What is the exact amount for your PAYE?

dfrost:
Look at what you quoted earlier. The comment said the relative was earning 130,000. What your computation on that? And please desist from saying wrong or right, only kids do that. Winning argument doesn't make you intelligent or a genius.

Saying proper analysis or that's not the way it's computed makes you sound mature.

I never insulted you. Why are you triggered lol. 130k cant be annual as thats 10k a month. He also mentioned net pay which is monthly. I dont need to calculate it as they HR amount is probably correct, there is pension and other deductions too. There is no way it can be 9k deductions. I dey work i for calculate am

ednut1:
I never insulted you. Why are you triggered lol. 130k cant be annual as thats 10k a month. He also mentioned net pay which is monthly. I dont need to calculate it as they HR amount is probably correct, there is pension and other deductions too. There is no way it can be 9k deductions. I dey work i for calculate am

Not triggered. I get your point. Which is why I asked the other poster: what is the exact PAYE?

E fit be say dem no dey pay pension (lol). Only tax deductions.

Only FM or FC that is not engaged or not professional that will be fighting on who to manage or handle Payroll.

Company policy will explain it all. However, in standard practice it is the work or JD of HR personnel or team to get Payroll prepared and and vetted by Internal Auditor before going to Finance. It should be noted that organization varies some prefered all shld be done by the finance bcus of the large figures that are involve.