Salary and payroll
Payroll cycle: the cut-off, the pay date and the gap
A payroll cycle is the repeating span a business pays for, together with the two dates that close it: the day attendance stops being counted for that span, and the day the money reaches the employee. Most Indian small businesses run a monthly cycle. Where the cut-off sits before the period ends, the last few days of work are paid in the following run.
Last reviewed: September 2026
Also called: payroll cycle, pay cycle, salary cycle, wage period, payroll period
In plain English
The fixed rhythm of paying people. A start date, an end date, a day when attendance stops being counted, and a day when the salary reaches the bank.
How it works in detail
Three dates make a cycle. The wage period is the span being paid for, often the calendar month, sometimes the 21st to the 20th. The cut-off is when attendance and leave are locked so the figures can be worked out. The pay date is when the employee receives the money, and the Payment of Wages Act, 1936 governs how soon after a wage period wages have to be paid. Ask your consultant what applies to your establishment.
The gap between the cut-off and the pay date is where the trouble sits. An absence, an approved leave or an advance taken after the lock rides into the next cycle as an adjustment. Joiners and leavers at the boundary are paid part of a cycle. Moving the cut-off mid-year produces one short period and a month nobody can compare against the last one.
A worked example
The setup
Suppose a printing unit runs its cycle from the 21st to the 20th and pays on the last working day. Neha is on INR 33,000 a month against a 30 day divisor.
The calculation
INR 33,000 / 30 = INR 1,100 per day. She is absent unpaid on the 24th and the 25th, both after the cut-off, so 2 x INR 1,100 = INR 2,200 is held back from the following cycle instead.The result
Neha receives INR 33,000 this cycle and INR 30,800 in the next one, with the two absent dates named on that slip so the drop can be traced.
Common mistakes
- Shifting the cut-off around to suit a busy week. Staff plan their own borrowing and rent against a fixed pay date, and a cut-off that moves makes two months impossible to compare.
- Locking the cycle before pending approvals are cleared, so a leave approved a day later arrives as a correction on the next slip. Set the approval deadline a couple of days ahead of the lock.
- Paying a mid-month joiner for a whole cycle because payroll ran on the full-month figure. The first cycle is part paid from the joining date, using the divisor your policy already names.
How VTClock handles it
Close the month in VTClock and pay builds from attendance fractions, holidays, weekly offs and approved leave. It does not disburse anything; the transfer itself stays with your bank.
Frequently asked questions
Where in the month should the attendance cut-off sit?
Far enough ahead of the pay date to check the register, clear pending leave approvals and settle advance recovery without guessing at anyone's days. A cut-off pushed too close to the pay date forces estimates that come back as corrections; one set too early carries a long tail of days into the next run. Fix the date, write it into the appointment letter, and keep it there.
Can I pay wage staff weekly and salaried staff monthly in the same business?
Yes, and site businesses commonly do, with a weekly settlement for the crew and a monthly one for office staff. Keep the two records separate so a week's wage is never mixed into a monthly figure, and keep each person on one period rather than switching them between the two. The interval allowed between a wage period and payment is worth confirming with your consultant.
What happens to a payroll cycle when somebody resigns halfway through it?
The last cycle is paid up to the final working day rather than as a full period, and anything outstanding is settled alongside it: unused leave your policy pays out, the balance of any advance recovered, and dues held from the previous cycle. Work the part period on the same divisor you use for everyone else, and hand over the settlement statement with the last slip.
Related terms
- Payable daysPayable days are the number of days a monthly salary is spread across, and the number of days in a given month the employee is actually paid for.
- Pro-rata salaryPro-rata salary is the share of a monthly salary an employee earns when they are on the payroll for only part of the month, or on two different salary rates inside it.
- Salary slipA salary slip is the statement an employer gives an employee for one wage period, setting out what was earned, what was deducted and what was paid.
- Net salaryNet salary is what is left of a month's earnings after every deduction the employer is required or authorised to make has come off.
- Salary advanceA salary advance is money handed to an employee before the pay it belongs to falls due, taken back from later salaries.
- Full and final settlementA full and final settlement is the closing payment made when an employee leaves, covering everything still owed in both directions.
Modules that touch this
- SalaryMonthly pay builds from attendance fractions, holidays, weekly offs and approved leave, so there are no side calculations.
- Salary slipsBranded, printable slips with earnings, an attendance summary and advance recovery. Staff see the same figures you print.
- AttendanceGeofenced check-in and check-out near assigned offices, with shift grace, late marks and overnight shifts handled for you.
See how VTClock handles payroll cycle
Tell us how your team is paid and where attendance is recorded today. We will show you what the module does with it.