MANAGE PAYROLL RECORDS

1. D1.HFI.CL8.04 D1.HFA.CL7.06 MANAGE PAYROLL RECORDS

2. Introduction • Classroom schedule • Trainer contact details • Assessments • Resources: • Calculator, pen and paper

3. Introduction Getting to know each other: • What is your name? • Where do you live? • Why are you doing this course? • Where do you work? • Have you studied a module or unit similar to this before?

4. Introduction Unit comprises four elements: • Establish procedures for the management of payroll • Prepare payroll data • Authorise payment of salaries • Administer salary records

5. Establish procedures for the management of payroll Introduction • What is payroll? • Salaries and wages • Other payments • What is the payroll system? • Definition

6. Establish procedures for the management of payroll Introduction continued: • Payroll and the hospitality and tourism industry • High payroll costs • High employee turnover • Know your workplace!

7. Establish procedures for the management of payroll Legislative requirements: • Labour laws, employment laws • Unique to each country • ASEAN charter • Privacy and confidentiality • Wage rates and conditions • Taxation rates and requirements • Codes of practice

8. Establish procedures for the management of payroll Payroll information: • Organisational records and information • Payroll register • Passwords and other authorisation details • Back up and storage • Records of hours worked • Reports • SECURE AND CONFIDENTIAL!

9. Establish procedures for the management of payroll Security procedures: • Why are security procedures necessary? • Where do you find details of security procedures? • Internal controls • Privacy and confidentiality

10. Establish procedures for the management of payroll Security procedures (continued): • Audit trail • Authorised access • Back up files and off site storage • Employee details • Access • Secure transfers

11. Establish procedures for the management of payroll Security procedures (continued): • Processing payroll • Numbered documents • Physical location • Storing reports and other data ACTIVITY

12. Establish procedures for the management of payroll Internal control measures: • Internal control systems defined • Objectives of internal control • Safeguard assets • Valid, complete and accurate transactions • Increase efficiencies

13. Establish procedures for the management of payroll Internal control measures: • Principles of internal control • Establish responsibility • Separate duties • Document procedures • Use electronic equipment

14. Establish procedures for the management of payroll Internal control measures and payroll: • The bank account • New employees or changes to employment conditions • Recording and authorizing hours worked • Salary • Wages • Overtime

15. Establish procedures for the management of payroll Internal control measures and payroll: • The bank account • New employees or changes to employment conditions • Processing payroll • Preparing payroll • Processing hours worked • Processing cheque or electronic payments • What about cash?

16. Establish procedures for the management of payroll Internal control measures and payroll: • Distributing payroll • Cheques • Pay advice slips • Reconciling payroll • Total hours • Total amounts paid • Correct errors

17. Establish procedures for the management of payroll Internal control measures and payroll: • Budgetary controls • Standards of performance • Average hourly rate • Average time to complete tasks • Total budgeted payroll costs

18. Establish procedures for the management of payroll Statutory obligations: • Conditions of employment • Labour management relations • Employment of migrant workers • Occupational health and safety

19. Establish procedures for the management of payroll Statutory obligations: • Income tax • Payroll tax • Other deductions and relief ACTIVITY

20. Establish procedures for the management of payroll Records and record keeping: • Types of records • Period of time to retain records • Storage • Destruction

21. Establish procedures for the management of payroll Claims for allowances: • What is an allowance? • Allowance or employee benefit? • Examples of allowances • How are allowances paid • Categories of allowances (continued on next slide)

22. Establish procedures for the management of payroll Claims for allowances (continued): • Set allowances • Condition of employment • Employee assigned relevant allowance code in payroll system • Specific event-linked allowances • Action linked to a standard payroll process • Supervisor approval – timesheet or other record of hours

23. Establish procedures for the management of payroll Claims for allowances (continued): • Specific event or activity claimable allowance • Application and approval process • Standard form • Supporting documentation • Implications for gross pay calculations • Depends on location of business and definition of income

24. Establish procedures for the management of payroll Claims for allowances (continued): • Creating allowances in the payroll system • Unique code • Authorised by payroll manager • Supporting documentation

25. Establish procedures for the management of payroll ACTIVITY Classify the following allowances into the appropriate category and detail the procedures for claiming allowances for each category • Travel allowance • Overtime meal allowance • Tool allowance • Laundry allowance • Relocation allowance

26. Prepare payroll data Prepare payroll data: • Calculate gross pay • Calculate deductions • Provide payroll data for processing

27. Prepare payroll data Introduction: • What is gross pay? Gross pay is defined as the sum of an employee’s wages or salary earned in the payroll period plus any allowances, commissions, bonuses or entitlements before any deductions are made.

28. Prepare payroll data Calculating gross pay: • Employment history records • Appropriate pay structure • Record of hours worked • Overtime • Penalty rates • Allowances

29. Prepare payroll data Calculating gross pay: • Benefits in kind • Leave entitlements • Salary packaging or salary sacrifice • Termination payments • Tips gratuities and service charges

30. Prepare payroll data Calculating gross pay: Activities • Calculate the gross pay for the following situations • An employee works for 8 hours and is paid an hourly rate of XXX per hour for 5 days in total • An employee works for 4 days, 10 hours per day. For every hour worked over 35 hours, the employee received overtime at 1.5 times normal hourly rate. The hourly rate is XXX

31. Prepare payroll data Calculating deductions: • What are deductions? • When are deductions calculated • Categories of deductions: • Statutory deductions • Voluntary deductions

32. Prepare payroll data Statutory deductions: • Income tax • Deducted for every employee, each pay period • Gross pay (inclusions and exclusions) • Progressive taxation systems • Some regions or countries do not deduct

33. Prepare payroll data Statutory deductions: • Relief or rebates • Reduces income tax calculated • Gross pay • Dependants • Other reasons

34. Prepare payroll data Statutory deductions: • Medical insurance • Percentage of gross pay • Pension or retirement funds or schemes • Percentage of gross pay • Other deductions

35. Prepare payroll data Voluntary deductions: • Written authorisation only • Give rise to a rebate or relief • Pay advice slip always states: • Name of deduction • Monetary amount

36. Prepare payroll data Voluntary deductions: • Insurance policies • Health • Life • Donations to charities • Union fees

37. Prepare payroll data Voluntary deductions: • Additional taxes • Means of saving • Social security payments • Pension or retirement fund contributions • Other deductions

38. Prepare payroll data Payroll levies: • Business obligations • Social security • Pension or retirement funds or schemes • Medical insurance • Other taxes

39. Prepare payroll data Providing payroll data: • Nature and size of organisation • Internal preparation • External company • The payroll register

40. Prepare payroll data Preparing the payroll register: • Hours worked • Gross pay • Deductions • Net pay • Cumulative totals

41. Prepare payroll data Key organisational timelines: • Work backwards from day employees need to be paid • Consider types of employees in hospitality and tourism organizations • Weekly, fortnightly, monthly • Distribution of payments – cheques or electronic transfer • Distribution of pay advice slips – post, internally, pick up

42. Prepare payroll data Key organisational timelines: • New employee information • Income tax payments • Other statutory deductions • Other tax liabilities ALWAYS ALLOW FOR EXTRA TIME BECAUSE THINGS CAN GO WRONG!

43. Prepare payroll data ACTIVITY • Provide a timeline for a weekly pay period where employees are expected to be paid on a Friday

44. Authorise payment of salaries Authorising payment of salaries: • Check payroll for appropriate authorisations • Reconcile salaries and wages • Deal with payroll inquiries

45. Authorise payment of salaries Check payroll for appropriate authorisations: • What are source documents • Adjusting information in the payroll system • Checking data • Exceptions and variations • Experience!

46. Authorise payment of salaries Check payroll for appropriate authorisations (continued): • Authorising the payroll register • Appropriately prepared • Error free – reconciliations have been performed • Who performs this task? • Arranging payment • Method of payment • Net pay on the payroll register

47. Authorise payment of salaries Methods of payment (continued): • Electronic transfers • Employee bank account details • Authorised electronic or hard copy payment listing • Cheques • Two authorised signatories • Printed electronically • Written manually

48. Authorise payment of salaries Methods of payment (continued): • Cash payments • CAUTION • Cash analysis sheet • Breakdown of notes and coins • Stored in secure envelopes and collected.

49. Authorise payment of salaries Pay slips or advices: • Formal record of gross pay, deductions and net pay • Details that are included on a pay slip • Electronic or manual distribution Post payroll errors: • Electronic transfer rejections • Monitoring overtime

50. Authorise payment of salaries Reconcile salaries and wages: • What is a reconciliation of salaries and wages? • Internal control measure • Timelines • Authorisations • Standard forms • What reconciliations are performed? (continued on next slide)