Payroll review: 4 checks before paying
Reviewing payroll before payment means four checks before you approve the transfer: who is on it, what changed this month, every deduction and its basis, and the transfer total and bank accounts. The timing is set by law: Article 90 of the Saudi Labor Law requires monthly-paid workers to be paid once a month, into their accounts through banks approved in the Kingdom. So set a fixed review day before payday.
This follows the employee salary advances lesson: the instalment you scheduled there shows up here as a line you must see before the money leaves.
Why payroll goes wrong in small businesses
- It is copied from last month: someone who left stays on it, or someone who started mid-month is missing.
- Changes arrive verbally: absence or overtime mentioned at the branch never reaches payroll.
- Deductions without a basis: an amount is deducted because a manager asked, not because there is a written reason.
- Bank details change by message: a request to change an IBAN comes from an unknown number and is accepted unchecked.
The four checks
1. Who is on the payroll this month?
Compare payroll names with staff currently employed. New starters are paid for the days they worked, and leavers move to exit clearance. Ask one question: does the number of names equal the number of staff in the attendance record?
2. What changed since last month?
Review the differences, not every line. Every salary that differs from last month needs a written reason: an approved raise, overtime approved by their manager, or recorded days of absence. If it is missing, hold that line, not the whole payroll.
3. Every deduction has a basis and a limit
Article 92 says no amount may be deducted from a worker's wage for private claims without their written consent, except in listed cases, including instalments of an employer loan of no more than 10% of the wage, and social insurance contributions required by law. Article 91 caps deductions for damage the worker caused by their own fault at five days' wages per month. Then Article 93 sets the overall ceiling: total deductions may not exceed half of the wage due. For each deduction ask: what is its basis, and is it within its limit?
4. Transfer total and bank accounts
The net pay of everyone on the payroll must equal the bank transfer file to the riyal. Confirm any changed bank account with the employee through a channel other than the message that requested it, before payment.
The review in one conversation
A business with 12 staff. Two days before payday the owner writes:
Owner: Review this month's payroll before I approve it
System: 12 names on the payroll and 12 staff in the attendance record. Three differences from last month: a new hire started on the 11th, so they are paid for 20 days; one employee worked 8 overtime hours approved by the branch manager; and a 400-riyal advance instalment for the salesperson, which is 10% of their wage. One alert: the warehouse employee changed their bank account yesterday.
Owner: Message them to confirm the account, and hold their line until they reply
System: Sent. Payroll without their line: 11 staff, and the net matches the transfer file. Approve the rest?
An hour later:
System: The warehouse employee confirmed the new account from the number we have on file. I added their line; payroll now has 12 staff and is ready to approve.
More on running your business from the same chat in WhatsApp ERP.
Payroll checklist
| Check | Question | Evidence |
|---|---|---|
| Names | Does the payroll match staff currently employed? | Payroll count = attendance count |
| Differences | Why did this salary change from last month? | Written approval for each difference |
| Deductions | What is each deduction's basis, and is it within its limit? | Consent or an Article 92 case; total no more than half the wage |
| Transfer | Does the bank file match the payroll net? | The two totals are equal |
| Bank accounts | Did anyone's account change? | Confirmation from the employee through a separate channel |
Common mistake: one person prepares and approves
When one person prepares payroll and approves the transfer, nobody sees their mistakes. Split the roles: whoever prepares payroll does not approve it, as in the responsibilities and permissions lesson. In a small business, the accountant prepares it and the owner approves it after seeing the differences.
Summary: four checks before every payment. The names match staff currently employed, every difference from last month has a written reason, every deduction has a basis and stays within its limit with the total under half the wage, and the transfer file matches the net with every changed bank account confirmed by its owner. One person prepares payroll, another approves it.