There is a point where payroll and HR become very closely intertwined.
And sometimes it’s difficult to see exactly where one stops and the other starts.
An employee’s hours change.
Their working days change.
Their salary increases.
They reduce their hours.
An allowance is agreed.
Someone changes from five days to four.
All perfectly normal things that happen during employment.
But here’s the important bit:
Payroll doesn’t make those decisions.
We don’t decide what somebody’s contracted hours should be.
We don’t decide whether their working pattern has changed.
We don’t decide their salary.
And we don’t rewrite their employment contract.
Those are decisions for the employer, usually with HR involved where appropriate.
Payroll uses that information.
And if the information reaching payroll doesn’t match what’s actually been agreed with the employee, that’s when things can start to unravel.
Imagine an employee originally worked 40 hours a week.
At some point they reduced to 32.
Everyone knows they work 32 hours.
The employee knows.
Their manager knows.
HR knows.
But was payroll told?
Was the change documented?
Was the salary adjusted?
Does the payroll record now match the contract — or the agreed variation to it?
Because payroll software isn’t going to lean back in its chair one Tuesday afternoon and say:
“Hang on. Didn’t Jane stop working Fridays six months ago?” 😂
It will simply continue processing the information it holds.
And that’s where something which looks like a payroll problem can actually have started much earlier.
Right information in. Right payroll out.
When we process payroll, we’re working with information supplied to us.
Contracted hours.
Salary.
Working patterns.
Overtime.
Absence.
Holiday.
Allowances.
Starters.
Leavers.
Changes to terms.
Some of those areas sit firmly within HR and employment matters.
But eventually, many of them arrive at payroll because they affect somebody’s pay.
That’s why HR and payroll can’t operate in completely separate little boxes.
They don’t need to do each other’s jobs.
But they absolutely need to talk to each other.
And inherited payrolls make this even more interesting
When we take over an existing payroll, we might see an employee receiving £X per month.
That’s useful information.
But it doesn’t necessarily tell us why they’re receiving it.
Perhaps their hours changed two years ago.
Perhaps there was a salary increase.
Perhaps an allowance was added.
Perhaps their working pattern changed but their contracted weekly hours didn’t.
Perhaps there is a perfectly sensible explanation.
Or perhaps everybody has simply been carrying the same figure forward because:
“That’s what we’ve always paid them.”
Which, as I’ve said before, explains what has happened.
It doesn’t necessarily explain why. 😂
Payroll shouldn’t quietly become HR
There is another side to this which I think is important.
A good payroll provider will ask questions when something doesn’t look right.
We might spot that the hours don’t appear to match the salary.
We might notice that somebody’s working pattern appears inconsistent with the information we hold.
We might ask whether a change has been agreed or documented.
But asking the question doesn’t mean payroll should make the HR decision.
If I’m told:
“Their hours have changed.”
My next question might be:
“Lovely — what have they changed to, from what date, and has that been agreed?”
What I shouldn’t do is decide what the employee’s new contractual arrangements are.
That’s an important distinction.
The handover between HR and payroll matters
The best payroll processes aren’t necessarily the ones with the fanciest software.
They’re the ones where there is a clear route for information.
Something changes.
It’s agreed.
It’s documented where necessary.
Payroll is told.
Payroll processes it.
Someone checks it.
Employee gets paid correctly.
It sounds incredibly simple written like that.
In real businesses, of course, humans are involved. 😂
Things get agreed in conversations.
Emails get missed.
Managers forget to tell someone.
Changes happen halfway through a month.
And sometimes everybody assumes somebody else has told payroll.
That’s why I’d encourage employers to periodically ask a very simple question:
Does the information payroll holds actually match the employment arrangements we have in place today?
Not what they were two years ago.
Not what everybody remembers them being.
Not what appeared on last month’s payslip.
What they actually are now.
Because payroll can calculate an extraordinarily complicated payslip accurately.
But first, we need the right information to calculate it from.
HR looks after the employment arrangements.
Payroll turns the relevant information into pay.
Different responsibilities.
But they work a lot better when they work together.
Because ultimately, there’s an employee at the end of both.
And it’s their money.
Every Person. Every Payslip. Every Time.
