Assessment 1 - Establish procedures for the management of payroll
Part A
1. What is the purpose of establishing security procedures in relation to payroll information?
2. What legislative requirements exist and apply in your organization in relation to:
a. Security of payroll information
b. Safeguarding of financial resources
c. Reporting to government authorities
3. Claims for allowances require substantiation documentation. How can procedures guarantee that an employee's claim for an allowance is substantiated?
4. How should organizational requirements relate to legislative requirements concerning the payroll?
5. In your own words provide a definition of what constitutes a record as determined by government legislation in relation to payroll.
a. Identify three different records relating to the payroll that an organization is required to keep for employees and the minimum period that these records should kept.
6. List and briefly describe four control measures that an organization can implement to protect an organization's financial resources.
7. List six security procedures you would expect to find in place for an organization with 150 to 200 employees with a dedicated team of five people operating in the financial support area that includes payroll as one of its key function.
Describe in one or two sentences how you would expect each procedure to operate.
Eduardo has been working in the finance area of a medium-sized clothing company and has been called to the Deputy CEO's office for a meeting. The organization has grown over the last 18 months from a staff of 80 people in a single location in Melbourne to having three outlets in Melbourne and recently opened outlets in Adelaide and Sydney with plans to open in Canberra, Wollongong and New Castle in New South Wales. The current staff profile totals 125 people and is expected to expand to 160 in the next 4 months.
The payroll function has always been outsourced to an external payroll company. With the increase in staff the CEO has asked his deputy that the option of internalizing the payroll function should be considered. Consequently, Eduardo is informed that as the Finance Officer he needs to determine what procedures would need to be established (developed and implemented) to manage the payroll function inside the company. He is also advised that it is critical that the financial resources of the company are protected from potential loss and that the company meets all statutory requirements. Eduardo has a week to provide a briefing to the Deputy CEO for consideration, which is to be forwarded to the CEO. If you were Eduardo what would you advise the Deputy CEO in terms of the following:
- The security procedures that should be established
- The approach to substantiation of claims for allowances both as Part of employment condition and for claims of work-related expenditure
- The safeguards that should be considered to protect the company's financial resources in terms of legislative and organizational requirements
The maintenance and keeping of records being undertaken in order that legislative requirement are met
Provide a briefing of no more than 3 pages using bullet points and options to identify appropriate procedures to establish the management of the payroll function in-house. You should include a comment on procedural issue that may arise with the separated nature of a business across eight locations and the potential for future expression in Sydney to additional locations.
Assessment 2 - Prepare payroll data
Part A
1. In your own words describe the following and how they impact on payroll:
a. A federal award
b. An industrial award
c. A state or territory award
d. An enterprise agreement
e. An employment contract
2. Using bullet points list the key items that are required in order to calculate an employee's gross pay and where you would obtain the required information.
3. Explain difference between Wage & Salary. How actions relating to an employee's wages and/or salary arrangements can impact on an organization. Describe each of the following terms and how and when they can or do impact or an organization in a financial sense:
a. Fringe benefits tax
b. Payroll tax
c. Employer superannuation contributions
d. Salary sacrifice arrangement
4. Identify 4 statutory deductions that can apply to wage and salary earner and provide a brief description of each inclusive of how the amount of each deductions would be calculated or determined.
a. What documentation or authorization is required or could be provided to enable an employer to withhold statutory deductions?
5. Identify 4 voluntary deductions that can apply to a wage and salary earner and provide a brief description of each inclusive of how the amount of each deduction?
a. What documentation or authorization is required or could be provided to enable and employer to withhold voluntary deductions?
6. What are the key timelines in relation to a new employee commencing with your organization?
7. What time lines are relevant to a person leaving the employ of your organization?
Read the case study and then answer the questions that follow.
Cameron works as the Payroll clerk for Wally's Landscape Gardening services
The company has 40 employees on the Payroll including full-time salaried workers (10 people), permanent part-time workers (15 people) and casual employees (15 people).
He receives the weekly time sheets for each of the employees, calculates the number of hours worked and input these plus any listed allowances on the time sheet into the Computer using MYOB as the software package that has been set up for him to use. The pays are automatically produced; cheques are printed and handed to the employees.
His boss Wally asks how he knows that the pay cheques are correct Cameron replies. 'Because they came out of a computer program'.
Wally realizes that he needs to overhaul the payroll system. Wally's staff currently get paid on the following basis:
- $18.00 an hour for 37.5 hours a week
- $27.00 an hour for standard overtime in excess of 37.5 hours (time and half)
a) Using the pay rates listed develop a simple spreadsheet or template that you can demonstrate to Wally as a means of checking that gross pay is correct based on normal time (1x) and time and a half (1 1/2X), using hours worked as:
- 35 standard hours in a week
- 50 hours in a week
b) Provide a step by step guide for Wally on how to access the relevant tax table to determine correct PAYG withholding or how he can use the ATO tax calculator.
Given that Wally pays his 40 staff weekly and that this occurs on Thursday night, provide the necessary time lines with a schedule of actions that need to be completed for Wally to achieve the payment of his employees in the Thursday evening. (Hint: start with the deadline for submission of time sheets and allowance and expense claims)
Resources required for this assessment include:
- access to a computer
- access to the internet
- access to MS Office applications
- access to a printer
- Case study handouts
Assessment 3 - Authorise paymet of salaries
PART A
1. What checks should be performed prior to authorization of running a payroll?
2. What checks does your organization perform? Comment on any differences.
3. What is 'source documentation'? Why might you need to access source documentation ate. performing some payroll checks? Provide an example of where you have done so.
4. What is the purpose of reconciliation between various documents and or records?
5. Outline a procedure you follow when a discrepancy occurs when reconciling salaries, wages or deductions.
PART B - CASE STUDY
Read the case study and then complete the task that follows.
Jacinta is the payroll manager for a legal firm in a metropolitan area and is aware that many of the people working in the company have significant HELP debts. Jacinta herself has a HELP debt from when she completed her tertiary studies a few years ago.
Jacinta is aware that there have been changes in the calculation of the HELP repayment income (HRI) or income level for people with a HELP debt and that this will significantly impact on their individual tax position at the end of the financial year as they will not be able to deduct investment losses to reduce their taxable income. On speaking with her supervisor. one of the law firm.s partners, Jacinta decides that it would be prudent to provide a briefing report on the implications to her staff and send a memo to all employees with a HELP debt indicated on the payroll system.
The key reason for doing this is that many employees are likely to either complain that the staff in payroll did something wrong or want an explanation. Given that the staff are very busy she knows that the memo to the relevant people must be no more than a page and must include the implications of the changes and possible options for minimizing the impact.
Jacinta's approach is proactive in that it may save significant time later when employees approach her office.
a) Investigate the implications of the HELP repayment change at the ATO website using:
www.ato.gov.au/individuals/content.asp?doc=/content/8356.htm or any other sources of information you might find.
b) Who else might you consult to make sure you understand the situation correctly?
c) Draft a one page memorandum to employees in your organization who have a HELP debt, on the implications of the calculation of the HELP repayment income (HRI). Include suggestions that they might consider in terms of voluntary deductions to safeguard or improve their chancE of a tax refund by having an additional tax withheld on the basis of their own calculations or or advice from a tax accountant or financial advisors if appropriate. Make sure you include paragraph on the appropriate form they would need to complete and process they should follow
d) Provide a numerical example as an appendix to the memo if you believe it would assist in you explanation.
Assessment 4 - Administer salary records
PART - A
1. Under what circumstances should an employee complete another TFN declarations from? Provide two examples where you have advised an employee and explain why.
2. What are the timelines for completion and lodgment of the TFN declaration with the ATO? What methods do you use in your organization to ensure these time lines are met?
3. What is the required period for keeping a TFN declaration for an employee? How do you ensure your organization meets these requirements?
4. What files should an organization keep in relation to payroll records? Detail all files your organization keeps, in what format and what security systems are in place to protect these records from misuse.
5. List the agencies or types of nominated creditors that your organization would be required to forward monies to on the basis of deductions withheld from an employee's salary or wages. Indicate the timelines that you are required to comply with in terms of forwarding the monies.
6. Must the monies forward to a nominated superannuation fund be exactly 9 percent of an employee's gross pay? Justify your response and provide an example of a variation (if appropriate).
7. Explain the role of a PAYG payment summary-individual non-business. What time lines are critical in terms of issuing the document to the taxpayer and advising the ATO?
PART - B - Case Study
Read the case study, and then complete the task that follows.
The management of Clancy & Associates issues a directive that says the whole company is to do away with the issuance of cheques and that all the transactions relating to the company are to be done via electronic means.
The board of a management further advises that this is a step towards achieving a policy of 80 per cent paperless administration as a contribution towards the environment by reducing its carbon footprint.
The initial reaction to electronic payment from Quentin the payroll manager is 'Terrific'. It's not an issue', because most of the payments to a nominated creditors are already done electronically.
In addition, Quentin realizes that a significant amount of management and administration of payroll and the associated records revolve around:
- The completion of forms; for example, TFN declaration, allowance claims
- The storage of paper; for example, time sheets
- Production of internal reports for checking and reconciling activities
- Documentation for employees; for example, pay slips and PAYG payment summaries
Use your own organization or use the one in the case study to consider the issue of a paperless payroll function. You are to provide a report to your supervisor outlining the opportunities that could be considered in achieving the goal of a paperless payroll system and highlight the issues that would need to be addressed in terms of an adjustment to policy and procedures. Clearly document any legislative matters that would require the need to maintain a paper-based procedure.
Consult with your staff and or others with experience in managing payroll. Provide a list of at I least three people that you have involved in the discussions to develop this report.
2500 words
5 reference