Preparing payroll correctly is not just a matter of entering salaries into a software program. Every month, the labour advisory firm needs to receive up-to-date information about the workforce, contractual changes, incidents, absences, hours worked, variable pay, sick leave and any data that may affect salary, Social Security contributions or IRPF withholding.
When that information arrives late, incomplete or scattered across emails, messages and calls, errors occur: corrected payrolls, employees receiving incorrect amounts, contribution discrepancies, problems with tax forms and time lost on reviews. That is why, for any company with employees, knowing what information an advisory firm needs to prepare payroll each month is key to professionalising labour management.
At MGI Àmbit, a firm of lawyers and economists in Barcelona specialising in labour, tax and accounting advisory services for companies, we help HR departments, finance departments and corporate groups organise the monthly payroll process so that it is more agile, reliable and secure.
Quick summary
- What the advisory firm needs: workforce data, contracts, new hires, terminations, changes in working hours, variable pay, absences, sick leave, holidays, garnishments, advances and final validation.
- When to send it: with a clear monthly cut-off date, ideally before the final payroll is calculated.
- Who should validate it: HR, administration or management, depending on the size of the company.
- What this avoids: payroll errors, recalculations, internal claims, contribution discrepancies and withholding issues.
- Objective: for the advisory firm to be able to calculate payroll, Social Security contributions, withholdings and labour reports without last-minute improvisation.
Why monthly information is so important for calculating payroll
Payroll is the result of many variables. Base salary and agreed supplements are only part of the calculation. Every month, changes may arise that alter the final result: one employee starts or ends a contract, another changes working hours, another is on sick leave, another has worked overtime, and another has a wage garnishment or a commission pending payment.
The labour advisory firm cannot calculate payroll correctly if it is unaware of these incidents. Nor can it correctly apply contribution bases, deductions, exempt items or withholdings if it does not have complete information validated by the company.
Payroll connects salary, Social Security and IRPF
Every payslip affects three areas at the same time:
- Employment-related area: agreed salary, collective bargaining agreement, working hours, supplements, leave, holidays and absences.
- Social Security area: contribution bases, contribution periods, registration or deregistration situations, temporary incapacity, overtime and settlement of contributions.
- Tax area: IRPF withholdings, communication of personal and family data, Form 111 and annual summary Form 190.
For this reason, an apparently minor incident can have a chain of consequences. A change in working hours reported late can affect salary, the contribution base, withholding and the labour cost for the month.
The most common mistake: sending only “what has changed” without a structure
Many companies send their advisory firm only the incidents they remember: “this employee worked extra hours”, “this person was on sick leave”, “there is a sales commission”. The problem is that, without an orderly communication system, something is always left out.
Best practice is not to rely on memory, but to work with a monthly payroll checklist. That checklist makes it possible to confirm that all critical areas have been reviewed before closing the month.
Does your company send payroll incidents without a clear system? At MGI Àmbit, we can help you organise the monthly process, reduce errors and professionalise the labour management of your workforce.
Checklist: information the advisory firm needs each month to prepare payroll
The following checklist summarises the information a company should send to its labour advisory firm before the monthly payroll close. Not every company will have all of these incidents every month, but they should be reviewed systematically.
| Information category |
What the company should review |
Why it affects payroll |
| New hires and new employment contracts |
Start date, contract, working hours, salary, position, workplace, collective bargaining agreement, professional group and personal data. |
Allows proportional salary, Social Security registration, initial withholding and labour cost to be calculated. |
| Employee terminations |
Termination date, reason, notice, outstanding holidays, extra payments, compensation where applicable and final settlement. |
Determines the final settlement, the balance and settlement receipt and the deregistration notification. |
| Contractual changes |
Changes to working hours, salary, category, workplace, contract type or agreed conditions. |
May alter salary, contributions, IRPF, the applicable collective bargaining agreement and employment records. |
| Overtime and additional hours |
Number of hours, date, authorisation, type of hours and compensation in cash or time off. |
Affects gross salary, additional contributions and working-time control. |
| Variable pay, bonuses and commissions |
Approved amounts, accrual period, affected employee and payment criterion. |
Increases the payroll for the month and may change withholdings or contribution bases. |
| Absences, leave and holidays |
Days taken, justified absences, paid leave, unpaid leave and outstanding holidays. |
May affect salary, holiday accrual and the proportional calculation of items. |
| Sick leave and temporary incapacity |
Dates of leave, confirmation and return to work, contingency, relapses and available medical reports. |
Determines benefits, collective agreement supplements, contribution bases and company cost. |
| Allowances, mileage and expenses |
Amounts, supporting documents, reason for travel, dates and applicable internal policy. |
Allows salary, non-salary, contributory and non-contributory items to be distinguished. |
| Garnishments and advances |
Garnishment orders, outstanding amounts, advances granted and authorised deductions. |
Affects net pay and must be correctly reflected in deductions. |
| Benefits in kind |
Vehicle, medical insurance, housing, vouchers, training, shares or other benefits. |
May affect salary, contributions and IRPF withholding. |
Initial information the advisory firm should have before it starts managing payroll
Before discussing monthly incidents, there is a set of initial data that the advisory firm must have configured correctly. If this starting information is wrong, errors will carry over into every subsequent month.
Company data
The advisory firm needs to know the company’s legal and employment structure: legal name, tax ID number (NIF), contribution account code, workplace or workplaces, applicable collective bargaining agreement, working calendar, payment method, debit bank account, internal authorisation system and validation managers.
In companies with several entities, subsidiaries or workplaces, this point is especially important. It is not enough to know “how many employees there are”; it is necessary to know under which entity they are employed, which collective agreement applies and what specific features exist at each workplace.
Data for each employee
For each employee, the advisory firm should have a complete employment record. That record should include:
- First name, surname, DNI, NIE or passport.
- Social Security affiliation number.
- Registration date and recognised seniority.
- Contract type and working hours.
- Professional group, category or position.
- Annual or monthly gross salary and payment distribution.
- Workplace and department.
- Bank account for payment.
- Form 145 for communicating data to the payer.
- Special conditions: bonuses, flexible remuneration, supplements, individual agreements or voluntary allowances.
Collective bargaining agreement and remuneration policy
The collective bargaining agreement determines essential items: base salary, allowances, extra payments, annual working hours, leave, temporary incapacity supplements, travel allowances, seniority, night work, public holiday work and other financial rights.
The advisory firm needs to know which collective bargaining agreement applies and whether the company has internal arrangements, collective agreements or more favourable conditions. This information prevents errors in categories, collective agreement back pay, mandatory supplements and final settlement calculations.
Practical advice: if the company changes collective bargaining agreement, opens a new workplace, adds a new activity or changes its salary structure, it should inform the advisory firm before closing the payroll for the month. This is not a minor incident: it may affect the entire workforce.
Monthly information on new hires, terminations and workforce changes
Registrations, deregistrations and data changes are among the most sensitive parts of the process. An incorrect date or late communication can cause contribution errors, incorrectly calculated proportional payroll or issues with Social Security.
New hires
When a new employee joins, the advisory firm needs to receive the information before the employee starts providing services. The minimum package should include:
- Actual start date.
- Personal data and Social Security number.
- Position, duties and professional group.
- Applicable collective bargaining agreement.
- Contract type and expected duration.
- Working hours, schedule and weekly distribution.
- Gross salary and extra payments.
- Probationary period, if any.
- Workplace.
- Bank account and Form 145.
The clearer this information is, the lower the risk of errors in registration, the contract and the first payroll.
Voluntary resignations, dismissals and contract terminations
When an employment relationship ends, the advisory firm needs to know the exact reason, effective date and outstanding items. A voluntary resignation is not the same as the end of a temporary contract, a disciplinary dismissal, an objective dismissal or termination for failure to pass the probationary period.
To prepare the final settlement correctly, the following must be reported:
- Termination date.
- Reason for termination.
- Accrued and unused holidays.
- Outstanding extra payments.
- Outstanding variable pay, commissions or bonuses.
- Notice given or not complied with.
- Compensation, where applicable.
- Company equipment pending return, if it affects internal settlements.
Changes during the month
All changes that do not involve a new hire or termination but do alter payroll must also be reported: changes in working hours, increases or reductions in hours, salary changes, conversion of a temporary contract into a permanent one, changes of position, transfers between workplaces or changes of collective bargaining agreement.
Monthly incidents that directly affect payroll calculation
Most payroll errors are not caused by fixed salary, but by the variable incidents that arise during the month. These are data the advisory firm cannot know unless the company expressly communicates them.
Overtime, additional hours and working-time records
Overtime and additional hours must be properly authorised, recorded and communicated. The advisory firm needs to know how many hours were worked, on which dates, by which employees and how they should be compensated.
For part-time contracts, additional hours require special control because they affect compliance with the agreed working hours. For full-time contracts, overtime may have specific remuneration and contribution treatment.
Commissions, incentives and bonuses
Variable items must be received already validated. It is not enough to send an approximate figure. The advisory firm needs to know:
- Gross amount to be paid.
- Period to which it relates.
- Affected employee or department.
- Accrual criterion.
- Whether it is recurring, one-off or extraordinary.
This information is important for calculating the payroll for the month correctly and avoiding future discrepancies over accrual, payment or contributions.
Holidays, leave and absences
Holidays taken, paid leave and absences must be reported before the close. The advisory firm needs to distinguish between justified absences, paid leave, unpaid leave, holidays, unjustified absences and contract suspensions.
An error in this classification may result in an improper payment or an incorrect deduction. It also affects the monitoring of outstanding holidays and the calculation of final settlements.
Temporary incapacity, maternity, paternity and other protected situations
Sick leave and situations involving suspension or benefits require special attention. The company must inform the advisory firm of the start, confirmation and return-to-work dates, as well as any available medical report and the applicable contingency.
In these cases, it should also be checked whether the collective bargaining agreement requires the benefit to be topped up to a certain percentage of salary. This information can significantly change net pay and the company’s cost.
Financial information that must be validated before payroll is closed
The advisory firm can calculate payroll, but the company must validate variable amounts and internal financial decisions. Otherwise, the calculation may be technically correct but may not match company policy.
Advances, loans and authorised deductions
If the company grants advances or loans to employees, it must communicate the amount, repayment schedule and the item under which it should be deducted. Deductions authorised by the employee or internal agreements that affect net pay must also be reported.
Wage garnishments
Garnishments are a critical incident. The advisory firm needs to receive the complete garnishment order, issuing body, total amount, outstanding balance and any updates. The garnishment calculation must comply with legal limits and be applied correctly to payroll.
Allowances, mileage and travel expenses
Allowances and expenses must be documented. The company should indicate dates, destination, reason for travel, amounts and supporting documents. It is also advisable to distinguish reimbursable expenses from items that actually remunerate the employee.
Flexible remuneration and employee benefits
Medical insurance, meal vouchers, childcare, transport, company vehicle, housing, training or shares may affect payroll, contributions and withholding. The advisory firm needs to know the value of the benefit, who receives it, from what date and under what conditions.
A correctly calculated payroll starts before the monthly close. At MGI Àmbit, we help companies in Barcelona and throughout Spain create a clear system for reporting incidents, validating variable items and avoiding constant corrections.
Tax information required to calculate IRPF correctly
IRPF withholding on payroll should not be improvised. The withholding depends on expected remuneration, contract duration, the employee’s personal and family situation, salary changes and other circumstances reported during the year.
Form 145 and changes in the employee’s personal circumstances
Form 145 allows the employee to communicate to the company personal and family data that influence withholding. The advisory firm should have this document at the start of the employment relationship and receive updates when relevant changes occur.
Changes that must be reported include the birth of children, disability, dependent ascendants or descendants, compensatory pensions or maintenance annuities, changes in family situation and other tax circumstances.
Expected annual remuneration
To calculate the withholding rate, the advisory firm needs to know the expected annual remuneration: fixed salary, extra payments, foreseeable variable pay, bonuses, commissions and benefits in kind. If a salary increase or an unforeseen bonus is approved halfway through the year, the withholding rate should be reviewed.
Employees with several payers or special situations
In some cases, withholding should be reviewed with particular care: employees who join halfway through the year, employees with high variable remuneration, expatriates, directors, working shareholders, internationally assigned employees or people who have had other payers during the tax year.
Employment and documentary information that should be retained each month
Preparing payroll is not just about calculating amounts. It also involves keeping sufficient documentation to justify the result to employees, auditors, the Labour Inspectorate, Social Security or the Tax Agency.
| Document |
Who provides it |
Purpose |
| Working-time record |
Company / HR |
Allows working hours, overtime, absences and schedule compliance to be verified. |
| Sick leave, confirmation and return-to-work reports |
Employee / company |
Used to calculate temporary incapacity and benefits. |
| Authorisation of overtime or additional hours |
Line manager / HR |
Prevents unvalidated payments or subsequent disputes. |
| Supporting documents for allowances and mileage |
Employee / administration |
Allow expenses, allowances and reimbursements to be classified correctly. |
| Communication of variable pay |
Management / sales / HR |
Supports bonuses, commissions and incentives. |
| Garnishment orders |
Public authority / court |
Allow mandatory deductions to be applied correctly. |
| Updated Form 145 |
Employee |
Used to calculate IRPF withholding correctly. |
Recommended schedule for sending monthly payroll information
One of the best ways to avoid errors is to establish a stable schedule. Each company can adapt it to its size and payment date, but the sequence should always be the same: collection, review, calculation, validation, payment and filing.
Between days 1 and 15: collection of incidents
During the first half of the month, HR or administration should record incidents as they occur: absences, holidays, sick leave, new hires, changes in working hours or approved variable items.
Between days 20 and 25: internal incident close
It is advisable to set a deadline for reporting incidents to the advisory firm. Anything received afterwards should be treated as an exception or left for adjustment, except in urgent cases.
Between day 25 and payment: calculation and validation
The advisory firm calculates payroll and sends a draft for review. The company must validate amounts, included employees, net pay, variable items, deductions and terminations. This review is essential: the advisory firm can detect technical errors, but the company must validate that its internal decisions are correct.
After payment: filing, reporting and subsequent obligations
Once payroll has been paid, payslips, supporting documents, labour cost reports and incident documentation should be filed. This information will be used for contributions, withholdings, tax forms, internal audits and future employee queries.
Common errors when sending payroll information to the advisory firm
Most errors recur month after month in companies that do not have a clear procedure. Identifying them helps correct the process before they turn into claims or penalties.
Sending information through too many channels
Email, WhatsApp, calls, Excel sheets, loose notes and forwarded messages create confusion. Ideally, a single channel or monthly incident template should be established so that everything is traceable.
Failing to validate variable items before sending them
Commissions and bonuses must be approved before they are sent. If provisional amounts are sent and later change, payroll has to be recalculated. This takes time and increases the risk of error.
Reporting terminations or new hires late
Registrations, deregistrations and changes have a direct impact on Social Security. Reporting them late may cause administrative incidents and incorrect settlements.
Failing to report changes in working hours or salary
A change in working hours affects salary, contribution bases, holidays, withholding and contributions. If reported late, it may require payroll that has already been paid to be adjusted.
Confusing reimbursable expenses with salary
Not every payment to an employee receives the same treatment. Allowances, mileage, reimbursed expenses, bonuses or supplements may have a different nature. The advisory firm needs to know the reason for the payment and have supporting documents.
Practical template for sending monthly incidents to the advisory firm
A simple template can save many hours of review. Each month, the company should send a document with fixed sections such as the following:
Monthly payroll checklist template
- Payroll month: indicate the period to be calculated.
- New hires: new employees, start date, contract, working hours, salary and workplace.
- Terminations: employees leaving, date, reason and outstanding holidays.
- Changes: working hours, salary, category, workplace, collective bargaining agreement or conditions.
- Variable pay: bonuses, commissions, incentives and extraordinary supplements.
- Hours: overtime, additional hours, night hours, public holiday hours or on-call duty.
- Absences: holidays, leave, justified and unjustified absences.
- Temporary incapacity and benefits: sick leave, confirmations, returns to work and maternity/paternity.
- Deductions: advances, loans, garnishments and other deductible items.
- Expenses: allowances, mileage and reimbursements with supporting documents.
- Validation: responsible person who confirms that the information is correct.
What the company should review before approving payroll
Once the advisory firm sends the draft payroll, the company should not simply look at the total amount payable. The review should be methodical.
| Item to review |
Control question |
| Included workforce |
Are all employees who should be paid included, and have those whose employment ended been excluded? |
| Net pay |
Are the net amounts consistent with the previous month and with the incidents reported? |
| Variable pay |
Have commissions, bonuses, supplements and hours been included correctly? |
| Absences and holidays |
Have days taken or deducted been reflected correctly? |
| Sick leave |
Have the benefit and collective agreement supplements been applied correctly? |
| Withholdings |
Are there relevant changes in IRPF due to increases, variable pay or new circumstances? |
| Company cost |
Does the total labour cost fit the budget and forecasts? |
If every payroll close becomes a race against the clock, the problem is not just the volume of work: it is the process. At MGI Àmbit, we design monthly payroll workflows so that HR, administration and the advisory firm work with clear data and defined deadlines.
How a labour advisory firm can help professionalise the process
A good advisory firm does more than calculate payroll. It also helps the company define what information must be sent, when it must be sent, who must validate it and how it should be retained. This organisational aspect is especially important in growing companies, corporate groups and businesses with high staff turnover or many variable pay items.
Defining the monthly schedule
MGI Àmbit can help establish a closing schedule adapted to the company: incident deadline, calculation date, review date, payment date and report delivery date.
Creating incident templates
A well-designed template reduces errors and prevents omissions. It can be adapted to each company according to its sector, collective bargaining agreement, number of employees, working-time arrangement and remuneration structure.
Coordinated labour, tax and accounting review
Payroll does not affect HR alone. It also has accounting, tax and financial implications. For this reason, working with a multidisciplinary firm makes it possible to connect payroll information with accounting entries, tax forms, cost reporting and cash-flow forecasts.
Support for complex incidents
Long-term sick leave, garnishments, collective agreement back pay, variable bonuses, assigned employees, part-time contracts or workplace changes require technical judgement. A specialised advisory firm reduces the risk of applying improvised solutions.
Conclusion: good payroll starts with good information
Payroll quality depends directly on the quality of the information received. If the advisory firm has complete, orderly and validated data, the monthly calculation will be faster, more reliable and easier to review. If the information arrives late or incomplete, the risk of error increases even if the technical team is excellent.
For this reason, companies that want to professionalise their labour management should work with a clear monthly system: incident checklist, closing schedule, validation managers, supporting documentation and final review before payment.
In an increasingly demanding employment environment, payroll can no longer be managed on an improvised basis. It is a critical part of the relationship with employees, regulatory compliance and the company’s financial control.
Contact MGI Àmbit, experts in payroll management for companies in Barcelona
MGI Àmbit is a firm of lawyers and economists based in Barcelona that offers comprehensive labour, tax, accounting, legal and financial advisory services for companies, corporate groups and self-employed professionals. Our team helps businesses manage payroll, contracts, contributions, withholdings, labour costs and internal procedures with technical rigour and a business-focused approach.
If your company needs to organise monthly payroll information, reduce errors, improve coordination with HR or outsource labour management with confidence, at MGI Àmbit we can help. We analyse your situation, design a process adapted to your workforce and support you month after month so that payroll management stops being a recurring problem.
Would you like your payroll to be prepared each month with fewer errors, fewer urgent issues and greater control? Contact MGI Àmbit and we will help you implement a clear, practical monthly labour management system adapted to your company.
Frequently asked questions about the information needed to prepare payroll
What monthly information does an advisory firm need to calculate payroll?+
The advisory firm needs new hires, terminations, changes in working hours or salary, absences, holidays, sick leave, overtime or additional hours, variable pay, commissions, allowances, advances, garnishments, benefits in kind and any data that affect salary, contributions or IRPF withholding.
When should payroll information be sent to the advisory firm?+
It is advisable to set a monthly cut-off date. Many companies work with an internal close between the 20th and 25th, although this may vary depending on the payment date and workforce size. The important thing is to have a clear deadline known to everyone.
What information is needed when a new employee joins?+
For a new hire, personal data, Social Security number, start date, contract type, working hours, salary, position, professional group, collective bargaining agreement, workplace, bank account, Form 145 and any specifically agreed condition are required.
Which incidents tend to cause the most payroll errors?+
The incidents that generate the most errors are overtime reported late, unreported sick leave, changes in working hours without documentation, unvalidated variable items, incorrectly recorded holidays, advances not deducted and garnishments applied without complete information.
Should the company review payroll before paying it?+
Yes. The advisory firm performs the calculation and technical review, but the company must validate that new hires, terminations, variable pay, hours, absences and deductions match the internal reality. This review prevents errors before transfers and final payslips are generated.
What happens if an incident is reported after payroll has been closed?+
It depends on the incident. Some can be corrected before payment if there is still time; others will have to be adjusted in the following payroll. In sensitive cases, such as terminations, new hires, garnishments or changes in working hours, it is advisable to act as soon as possible to avoid contribution or payment errors.
Can MGI Àmbit handle monthly payroll management?+
Yes. MGI Àmbit provides labour advisory and payroll management services for companies, corporate groups and self-employed professionals. The service can include monthly calculation, incident review, contracts, contributions, withholdings, cost reporting and ongoing labour support.
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