A monthly payroll routine for small businesses with hourly staff
Set up a monthly payroll routine for hourly staff. Set deadlines, assign responsibilities and check approved hours before payday.
It’s Sunday evening and next week’s rota is ready. But two shifts were swapped last week, one employee went home sick and another stayed after closing. Who makes sure those changes reach the right payroll run?
Start with three decisions: when staff need to submit their hours, who approves them and when the person running payroll needs to finish checking the figures. Put the deadlines in a shared calendar so you don’t have to agree on them all over again each month.
1. Work backwards from payday
Start with payday. Set internal deadlines for submitting timesheets, getting manager approval and having payroll ready for payment. Leave time for corrections and bank processing.
| When | What needs to be done? | Who does it? |
|---|---|---|
| Throughout the month | Staff report hours and absences. Managers clear up questions while the shift is fresh. | Staff and shift supervisors |
| At the payroll cut-off | Confirm which shifts and other entries are included in the run. | Payroll lead |
| Before running payroll | Resolve discrepancies and approve the hours. | Responsible manager |
| Before payment | Check the payroll figures and payment instructions. | Payroll lead and payment approver |
| After payment | Reconcile the payment and handle employer reporting and payments by the applicable deadlines. | Payroll lead or accounting partner |
In a small business, one person may do several of these jobs. Assign an owner to each step anyway. Even if an accountant runs payroll, someone at the business still needs to know who actually covered Saturday’s shift.
2. Keep the pay period, cut-off and payday separate
The pay period tells you which dates the payroll records cover. The cut-off determines what goes into a particular run. Payday is when staff receive their wages.
Suppose payday is the 25th and the run covers shifts through the 19th. On the 20th, the manager is still sorting out a missing clock-out from the 18th. A shift worked on the 21st, however, is outside the planned period. One is a missing detail for a shift already in scope. The other is a shift after the cut-off.
Decide how to handle late corrections. Who decides whether payroll needs to be recalculated before payment? Who follows up if a mistake is found afterwards? A cut-off helps you organise the work, but doesn’t on its own determine when someone must be paid.
3. Review discrepancies every week
Compare scheduled, clocked and reported hours. Start with questions someone on site can answer: a missing clock-out, an apparent duplicate shift or a sick absence that was only mentioned in chat.
Suppose an employee was due to finish at 23:00 but stayed until 23:45. The manager checks what happened and approves the correct hours. The payroll lead then checks which supplements or deductions apply under the relevant terms. That way, the person running payroll doesn’t have to guess what happened on the floor.
For more examples, read our guide to common restaurant payroll errors.
4. Check what has changed since the last payroll run
Start with changes: a new employee, a different hourly rate, someone who has left or a new bank account. Check relevant tax details, annual leave balances and recurring supplements or deductions as well.
Then review the results:
- Is everyone who should be paid included?
- Are hours, absences and supplements in the right period and counted only once?
- Can you explain larger differences from the last payroll run?
- Do the payment amounts match the approved payroll?
A big difference isn’t automatically a mistake. An event with extra shifts may explain higher pay. The point is to know why before sending the money.
5. Follow up after payday
Make payslips available and tell staff who to contact if something looks wrong. Keep the records you need to trace an item on a payslip back to an approved timesheet or a change in employment terms.
In Sweden, the month wages are paid determines the reporting period for the employer declaration (AGI). If someone works in November and is paid in December, report those wages for December. Check the current reporting and payment deadlines with the Swedish Tax Agency (in Swedish).
Start with your next payroll run
Put four dates in the calendar: timesheets due, manager approval, final payroll review and payday. Assign someone to each step. Afterwards, ask what information you still had to chase. Start there next month.
In Simflexity, managers can review reported hours against the rota and use approved timesheets as input for payroll. Want to see how this would work for your team? Bring a typical pay period and one issue you often have to resolve to a demo.