Differences in current earnings and deductions will form the compensation, payable for the payroll cycle. Usually, this is termed as Net Pay.
Net Pay is calculated after recording the current earnings and deductions.
Payroll Processor compares the salary register of the current payroll cycle with that of the previous cycle and verifies component-wise as well as total and net compensation of employees. This is to ensure that the current payroll process is accurate. In case of differences, the same will be recorded as variance
Before the disbursement of the salary to employees, Payroll Processor has to receive approval from management. This is a control mechanism to ensure the availability of funds and post this, instructions will be given to Accounts to disburse the salary.
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