HRIS Payroll Made Simple: Tracking Other Income and Deductions

Managing employee payroll is one of the most critical—and complex—functions in any HR department. Between calculating salaries, bonuses, allowances, and deductions, HR teams often spend countless hours on manual adjustments and cross-checking spreadsheets.

That’s where a Human Resource Information System (HRIS) comes in. Modern HRIS solutions simplify payroll processing by automating calculations, including “other income” such as bonuses or allowances, and deductions like taxes or loans. The result? Faster payroll runs, fewer errors, and happier employees.

In this article, we’ll explore how HRIS payroll systems make managing other income and deductions simple, accurate, and efficient.

What Is “Other Income” in Payroll?

In HR and payroll terms, other income refers to any earnings an employee receives outside their regular basic pay. These can include:

• Bonuses and incentives
• Overtime pay
• Commission or performance-based pay
• Allowances (e.g., travel, meal, housing, clothing)
• Reimbursements
• Profit sharing or gratuities

Tracking these components manually can be error-prone. An HRIS payroll module automates the entire process—ensuring that all forms of income are accurately reflected in each pay cycle.

Understanding Deductions in HRIS Payroll

Just as “other income” adds to an employee’s pay, deductions are subtractions that need to be carefully calculated and documented. Common deductions include:

• Tax withholdings (income tax, VAT, etc.)
• Social security contributions
• Health insurance premiums
• Loan or cash advance repayments
• Late or absentee deductions

With an HRIS, these deductions are automatically computed based on predefined rules and government regulations. This ensures compliance and eliminates repetitive manual calculations.

How HRIS Automates Payroll Computation

An integrated HRIS payroll system streamlines income and deduction tracking through automation. Here’s how it works step by step:

1. Employee Data Integration
   The HRIS stores all relevant employee information—salary structure, benefits, and tax status—making payroll processing seamless.
2. Automatic Income and Deduction Calculations
   Once attendance and performance data are entered (or synced automatically), the system applies rules to calculate salaries, other income, and deductions.
3. Real-Time Validation
   HRIS payroll modules check for inconsistencies (like missing attendance or duplicate bonuses) before finalizing payroll.
4. Payslip Generation
   Employees receive digital payslips with a detailed breakdown of earnings, taxes, and deductions—reducing queries and increasing transparency.
5. Compliance and Reporting
   HR teams can generate government reports (e.g., tax filings, contribution summaries) directly from the HRIS, saving hours of manual work.

Benefits of Tracking Other Income and Deductions via HRIS

1. Improved Accuracy
   Automation minimizes human error, ensuring each payroll cycle is precise and consistent.
2. Time Savings
   HR staff can complete payroll processing in minutes instead of hours or days.
3. Compliance Assurance
   Built-in tax and contribution formulas help meet local labor and tax regulations automatically.
4. Employee Transparency
   Digital payslips and self-service portals allow employees to view their income and deductions anytime, improving trust.
5. Centralized Data Management
   All payroll data is stored securely within the HRIS, reducing paperwork and improving record-keeping efficiency.

Key Features of an HRIS Payroll Module

To effectively manage other income and deductions, an HRIS should include:

Feature	Purpose
Configurable Payroll Components	Define different income and deduction types (bonuses, taxes, etc.)
Automated Payroll Rules	Apply formulas and tax tables automatically
Employee Self-Service Portal	Allow employees to view payslips and income details
Compliance Reports	Generate tax, benefits, and contribution reports easily
Audit Trail	Track payroll changes for accountability and transparency

Real-World Example

• Let’s say an employee earns a basic salary of ₱30,000 per month.
• They receive ₱2,000 as a performance bonus and a ₱1,000 transportation allowance.
• They also have ₱3,000 in mandatory deductions for tax and social security.

Without HRIS: HR manually adds each bonus, allowance, and deduction—risking errors.
With HRIS: The system automatically calculates gross and net pay:

This ensures accuracy and consistency with every pay period.

Best Practices for Payroll Automation

• Define clear payroll policies before implementation
• Regularly update tax tables and deduction formulas
• Integrate attendance and performance modules for seamless data flow
• Test payroll scenarios (new hires, bonuses, deductions) before full rollout
• Train HR staff and employees on how to use the self-service features

Conclusion

A modern HRIS payroll system takes the complexity out of managing salaries, other income, and deductions. By automating these processes, HR teams gain accuracy, speed, and compliance—while employees enjoy transparency and trust in every paycheck.

Whether cloud-based or on-premise, implementing HRIS payroll automation is one of the smartest investments for improving efficiency and employee satisfaction in any organization.