In this tutorial, I am going to show you the step-by-step procedures on how to make a **payroll system** in **Microsoft Excel** with a payslip. You can use these steps for any type of dataset to generate simple and reusable payrolls. Throughout this tutorial, you will also learn some important excel tools and techniques which will be very useful in any excel related task.

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## Download Practice Workbook

You can download the practice workbook from here.

## Step-by-Step Procedures to Make a Payroll System in Microsoft Excel with Payslip

We have taken a concise dataset to explain the steps clearly. The dataset has approximately **6 **rows and **8 **columns. Initially, we are keeping all the cells in **General **format and the cells with monetary values in **Accounting **format. For all the datasets, we have **8 **unique columns which are **Employee, Pay/Hour, Total Hours Worked, Overtime/Hour, Total Overtime, Gross Pay, Income Tax,** and** Net Pay**. Although we may vary the number of columns later on if that is needed.

### Step-1 Creating Base Dataset of Payroll System

In this first step, we will create our starting dataset which we will use to make a complete **payroll system** in Microsoft **Excel** with a payslip.

- First, insert the
**Employee**names in the first column. - Then, create
**4**more columns for**Pay/Hour**,**Total Hours Worked**,**Overtime/Hour,**and**Total Overtime**as in the image below. - Next, type in the necessary data values in the appropriate columns.

**Read More: ****How to Calculate Hours and Minutes for Payroll Excel (7 Easy Ways)**

### Step-2 Finding Net Pay

Here, we will be applying some simple formulas to find the **Gross Pay**, **Income Tax (15%),** and **Net Pay.**

- To begin with, go to cell
**G5**and insert the formula below:

`=C5*D5+E5*F5`

- Now, press
**Enter**and copy this formula down using**Fill Handle**.

- Next, navigate to cell
**H5**and enter the formula below:

`=0.15*G5`

- Then, press the
**Enter**key and copy this formula down to other cells.

- After that, type in the formula below in cell
**I5**:

`=G5-H5`

- Then, press
**Enter**and also copy this formula to the cells below.

**Read More: ****How to Make Payroll in Excel (with Easy Steps)**

### Step-3 Calculating Necessary Sum Values

Let us now perform the necessary calculations to find out the total values of all the fields in the dataset.

- To begin this step, go to cell
**D11**and type in this formula:

`=SUM(D5:D10)`

- Now, navigate to the cell
**F11**and type in the following formula:

`=SUM(F5:F10)`

- After that, insert this formula inside cell
**G11**and press**Enter**:

`=SUM(G5:G10)`

- Next, type in the formula below in cell
**H11**and again press**Enter**to confirm:

`=SUM(H5:H10)`

- Now, double-click on cell
**I11**and type in this formula:

`=SUM(I5:I10)`

**Read More: ****How to Create Payroll Calculator in Excel (with Easy Steps)**

### Step-4 Creating Employee Payslip

Now, in this final step, we will make a simple payslip for a sample employee which you can extend to other employees.

- For this, type the starting fields as
**Employee Name**,**Gender**,**Earnings**,**Paid Days**, and**LOP Days**as in the image below. - Then, enter the values for the individual employee. Here we have considered
**Daniel Smith**as a sample employee.

- Next, enter the values for
**Basic pay**,**Overtime Hours**, and**Overtime Rate**. - Now, go to cell
**C10**and insert the following formula:

`=C8*C9`

- Then, type in this formula in cell
**C11**:

`=C10+C7`

- Next, insert the
**Salary Advance**and**Other Deduction**fields with their respective values.

- Then, insert the
**Tax**and**Loan**fields as well as their monetary values.

- Now, go to cell
**E10**and type in the following formula:

`=SUM(E6:E9)`

- Finally, enter the
**Net Pay**formula inside cell**E11**and press**Enter**:

`=C11-E10`

**Read More: ****How to Calculate Payroll Overtime with Formula in Excel**

## Conclusion

I hope that you were able to apply the methods that I showed in this tutorial on how to make a **payroll system** in **Microsoft Excel** with a payslip. As you can see, it involves quite a few steps to achieve this. So carefully follow these while applying them to your own dataset. If you get stuck in any of the steps, I recommend going through them a few times to clear up any confusion. Lastly, to learn more **excel** techniques, follow our **ExcelDemy** website. If you have any queries, please let me know in the comments.