What Is Payroll? How Attendance Turns Into Employee Pay.

Every pay period, employees expect to be paid correctly and on time. For HR, payroll in the Philippines starts well before payday. It starts with the attendance and timekeeping records behind it.

What Is Payroll?

Payroll is the process of computing and releasing employee pay: what each employee earned, what gets deducted, and what they take home.

What Is the Difference Between a DTR and Payroll?

A DTR records when an employee started and finished work. Payroll turns that information into pay, and timekeeping sits in between. In our guide on employee timekeeping, we explained that reviewed attendance records become the information used for payroll:

• Working hours determine regular pay

• Overtime is added to earnings

• Undertime, tardiness, and unpaid absences may reduce pay, depending on company policy

• Approved leave makes sure paid and unpaid days are treated correctly

In short, the DTR shows when employees worked, timekeeping makes sense of it, and payroll puts a peso value on it.

How Do You Compute Payroll From Attendance Records?

Start with finalized attendance and timekeeping records, then work through these steps:

• Compute gross pay, including overtime, holiday pay, and night differential

• Apply deductions such as SSS, PhilHealth, Pag-IBIG, and BIR withholding tax

• Arrive at net pay

• Release payment and payslips

Why Does Timekeeping Matter for Payroll?

Payroll can only be as reliable as the records behind it. A missed time-out, unrecorded overtime, or a leave that never got logged carries straight into an employee’s pay. Fixing it later means recomputing and reissuing payslips, so it’s much easier to catch these during timekeeping.

A spreadsheet can handle this for a small team. As headcounts and schedules grow, copying hours by hand every pay period becomes slow and error prone.

What If Payroll Could Start from Your Time Logs?

Many payroll systems ask you to start over, with a new employee file, new pay rules, and a setup period before your first run. But if your team already clocks in on LILO, your attendance data already exists.

That’s the idea behind HRGo, LILO’s payroll solution for Philippine micro and small businesses. Instead of rebuilding your records, it reads from the time logs your team is already creating.

In our next article, we’ll look closer at how it works.

Want to see how LILO works for your team? Book a demo.