PAYROLL ACCOUNTING

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					Payroll accounting


                                     PAYROLL ACCOUNTING

LEARNING OBJECTIVES

At the end of this module, the students are expected to be able to:

    1. Compute payroll and prepare payroll sheets
    2. Compute withholding taxes due, SSS, Philhealth and Pag-ibig premiums due
    3. Record payroll entries

MODULE OUTLINE

I – Payroll Concepts
        A. Definition of terms
        B. Classification / Types of employees

II – Computation
       A. Daily rate
       B. Overtime pay and premium
       C. Holiday pay and premium

III – Preparation of payroll sheet
IV – Recording payroll entries


PAYROLL CONCEPTS

Payroll accounting – is the process of computing and recording of disbursement for wages and
salaries and their related statutory deductions such as Withholding taxes, contributions to Social
Security System (SSS), Philhealth, Pag-ibig or Home Development Mutual Fund (HDMF) and
other allowable deductions.

Labor cost – represents the cost of human contribution to production.

Manpower - shall mean that portion of the national’s population which has actual or potential
capability to contribute directly to the production of goods and services

Classification of earners

    1. Fixed monthly earners – are employees with fixed monthly basic pay as basis in
       computing salary.
    2. Daily wages earners – are employees with daily rate as basis for computing wages. The
       concept of “no work no pay” applies to them.




        Maria Corazon Cuadra – Gabayan (03/2011)
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Payroll accounting




Type of employees / Employee status

    1. Regular – are permanent employees who enjoy security of tenure. They are classified in
       the payroll as fixed monthly earners. They are entitled to whatever benefits given by
       employers. Technically, employees who have worked after straight six months are
       recognized by the Department of Labor and Employment (DOLE) as regular employees
       even without the appointment from employers.

    2. Probationary – are employees on trial stage, generally within six consecutive months with
       a hope of becoming regular employees. They may be classified in the payroll as fixed
       monthly earners or daily wage earners depending on the position held.

    3. Contractual – are employees under a series on renewable contracts. They are classified in
       the payroll as daily wage earners.

    4. Seasonal – are hired as employees only every peak season of a company’s operations.
       They are classified in the payroll as daily wage earners.

    5. Learners – are persons hired as trainees in semi-skilled and other industrial occupations
       which are non-apprenticeable and which may be learned through practical training on the
       job in a relatively short period of time which shall not exceed three (3) months. The
       wages or salary rates of the learners which shall begin at not less than seventy-five
       percent (75%) of the applicable minimum wage.

    The types of employees may be visually differentiated through the graph below. The gray
    fill is the period an employee worked.


     Type of employees

     Regular
     Probationary
     Contractual
     Seasonal
     Learners
                                      3             6          9        12
                                          Time (months)
                        Figure 1.

SALARY – is a fixed amount of compensation for services rendered covering a fixed period of
time usually a month. It generally refers to the pay of managerial, administrative and rank and
file employees.



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Payroll accounting


WAGE – is fixed amount of compensation for services rendered covering fixed period of time,
usually hours, or fixed amount of work, usually by piece. It is generally given to skilled and
unskilled labor.

BASIC PAY - Regular pay for work rendered on a regular working day within regular working
hours. In the Philippines, regular working hours is equivalent to eight (8) hours. The basic pay
may be in a form of fixed monthly salary or on a daily wage.

      DOLE required employers with more than 10 employees to pay at least a minimum daily
wage. This varies depending on the region the company is located and the industry it is in.

For fixed monthly salary earners, daily rate is computed as follows:

                     Daily rate   =   Monthly salary x Number of months in a year
                                       Number of regular working days in a year


The number of regular working days varies depending on the company’s regular operations.
Some have a five-day work week (e.g. Monday to Friday) while some have a six-day work week
(e.g. Monday to Saturday).

In the absence of the regular working days in the problem, it may be computed as follows:

Six-day work week
Number of regular working days = 365 days in a year – 52 weeks * – 11 regular holidays
                               = 302

Five-day work week
Number of regular working days = 365 days in a year – (52 weeks x 2)** – 11 regular holidays
                               = 250

* represents 1 rest day per week (e.g. Sundays)
** represents 2 rest days per week (e.g. Saturdays and Sundays)

 Illustration 1
 Mateo Rodriguez has a monthly salary of P12,000. Compute his daily rate assume the
 company has 300 regular working days in a year.

 Solution
 Daily rate = P12,000 x 12
                300

 Daily rate = P480




        Maria Corazon Cuadra – Gabayan (03/2011)
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Payroll accounting


HOLIDAY PAY AND PREMIUM

Types of holiday
       1. special holiday or rest day
       2. special holiday falling on a rest day
       3. regular holiday
       4. regular holiday falling on a rest day

1. Special Holidays – are non working days which require declaration from local or national
government. These include local and national holidays. The following are the most common
national special holidays

                                     Holiday              Date
                               Edsa 1                 February 25
                               All Saints Day         November 1
                               Last day of the year   December 31


Rest days – are non working days declared or set by the employers.


     Labor Code Art. 93. Compensation for rest day, Sunday or holiday work.

     Section 1. Where an employee is made or permitted to work on his scheduled rest
     day, he shall be paid an additional compensation of at least thirty percent (30%) of
     his regular wage. An employee shall be entitled to such additional compensation for
     work performed on Sunday only when it is his established rest day.

     Section 3. Work performed on any special holiday shall be paid an additional
     compensation of at least thirty percent (30%) of the regular wage of the employee.




2. Special holidays falling on rest days

    Labor Code Art. 93. Compensation for rest day, Sunday or holiday work.

    Section 3. Where such holiday work falls on the employee’s scheduled rest day, he
    shall be entitled to an additional compensation of at least fifty per cent (50%) of his
    regular wage.




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Payroll accounting


3. Regular holidays – non working days which do not require declaration from local or national
government.

    Labor Code Art. 94. Right to holiday pay.

     Section 1. Every worker shall be paid his regular daily wage during regular holidays,
    except in retail and service establishments regularly employing less than ten (10)
    workers;

     Section 2. The employer may require an employee to work on any holiday but such
    employee shall be paid a compensation equivalent to twice his regular rate;




        But for casual, seasonal and employees on probation, no work no pay applies to them.

The following are considered to be regular holidays by DOLE.

                                    Holiday                      Date
                       New Year’s Day                       January 1
                       Maundy Thursday                      Movable date
                       Good Friday                          Movable date
                       Araw ng Kagitingan or Bataan Day     April 9
                       Labor Day                            May 1
                       Independence day                     June 12
                       National Heroes Day                  Movable date
                       Eid’l Fitre                          Movable date
                       Bonifacio Day                        November 30
                       Christmas Day                        December 25
                       Rizal Day                            December 30

4. Regular holiday falling on a rest day
       Employees who are required to work on a such holiday which falls on his scheduled rest
day, shall be entitled to time and one hundred sixty percent (160%) thereof for the first eight
hours

The table 1 below shows the summary of holiday pay and premium

                                                    Basic and    Holiday
                                                   Holiday pay Premium
                     Regular working day              100%         none
                     Special holiday or rest day      130%         30%
                     Special holiday and rest day     150%         50%
                     Regular holiday                  200%        100%
                     Regular holiday and rest day     260%        160%
                       Table 1. Summary of holiday pay and premium

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 Payroll accounting


 Other provisions for holiday pay

      Labor Code Art. 93. Compensation for rest day, Sunday or holiday work.

      Section 2. When the nature of the work of the employee is such that he has no regular
      workdays and no regular rest days can be scheduled, he shall be paid an additional
      compensation of at least thirty percent (30%) of his regular wage for work performed
      on Sundays and holidays.

      Section 4. Where the collective bargaining agreement or other applicable employment
      contract stipulates the payment of a higher premium pay than that prescribed under this
      Article, the employer shall pay such higher rate.




 OVERTIME PAY

 Overtime is work rendered in excess of eight hours.

     Labor Code Art. 87. Overtime work.

     Work may be performed beyond eight (8) hours a day provided that the employee is
     paid for the overtime work, an additional compensation equivalent to his regular wage
     plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on
     a holiday or rest day shall be paid an additional compensation equivalent to the rate of
     the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.



 The table 2 below shows the summary of overtime pay in a given holiday

                                  Basic pay         Overtime Pay
                                  (First 8 hours)   (In excess of 8 hours )
Regular working day               100%              Hourly rate x 125% x hours of overtime
Special holiday or rest day       130%              Hourly rate x 130% x 130% x hours of overtime
Special holiday and rest day      150%              Hourly rate x 150% x 130% x hours of overtime
Regular holiday                   200%              Hourly rate x 200% x 130% x hours of overtime
Regular holiday and rest day      260%              Hourly rate x 260% x 130% x hours of overtime

                         Table 2. Summary of overtime pay




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Payroll accounting



 Illustration2:

 Lia Ortega who worked as executive assistant of Waya Inc. has a monthly basic pay of
 P10,000. She worked 2 hours overtime on the following days:
        Case 1 – regular working day
        Case 2 – special holiday
        Case 3 – special holiday falling on her rest day
        Case 4 – regular holiday
        Case 5 – regular holiday falling on her rest day
 Requirement:
        a. Compute for her daily rate. Assume that the company has 300 working
            days in a year
        b. Compute for her hourly rate.
        c. Compute for her overtime pay under each independent cases


Solution(a):
                        Monthly rate                               P     10,000
                        Multiplied by number of months in a year             12
                        Annual salary                              P    120,000
                        Divided by number of working days                   300
                        Daily rate                                 P        400

Solution(b):
                       Daily rate                             P        400
                       Divided by regular working hours                  8
                       Hourly rate                            P         50


Solution(c):

        Case 1 – regular working day
                      Hourly rate                             P     50.00
                      Multiplied by overtime premium                  25%
                      Overtime premium per hour               P     12.50
                      Add: Hourly rate                              50.00
                      Overtime Pay per hour                   P     62.50
                      Multiplied by overtime hours worked            2.00
                      Overtime Pay                            P    125.00

        Shorter solution        50 x 1.25 x 2 = 125




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Payroll accounting


Case 2 – special holiday
                      Hourly rate                            P    50.00
                      Multiplied by holiday rate                   130%
                      Hourly rate on a holiday               P    65.00
                      Multiplied by overtime premium                 30%
                      Overtime premium per hour              P    19.50
                      Add: Hourly rate on a holiday               65.00
                      Overtime Pay per hour                  P    84.50
                      Multiplied by overtime hours worked           2.00
                      Overtime Pay                           P   169.00

        Shorter solution        50 x 1.30 x 1.30 x 2 = 169


Case 3 – special holiday falling on her rest day
                      Hourly rate                            P    50.00
                      Multiplied by holiday rate                   150%
                      Hourly rate on a holiday               P    75.00
                      Multiplied by overtime premium                 30%
                      Overtime premium per hour              P    22.50
                      Add: Hourly rate on a holiday               75.00
                      Overtime Pay per hour                  P    97.50
                      Multiplied by overtime hours worked           2.00
                      Overtime Pay                           P   195.00

        Shorter solution        50 x 1.50 x 1.30 x 2 = 195


Case 4 – regular holiday
                     Hourly rate                             P    50.00
                     Multiplied by holiday rate                    200%
                     Hourly rate on a holiday                P   100.00
                     Multiplied by overtime premium                  30%
                     Overtime premium per hour               P    30.00
                     Add: Hourly rate on a holiday               100.00
                     Overtime Pay per hour                   P   130.00
                     Multiplied by overtime hours worked            2.00
                     Overtime Pay                            P   260.00

        Shorter solution        50 x 2 x 1.30 x 2 = 260




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Payroll accounting


Case 5 – regular holiday falling on her rest day
                     Hourly rate                                     P    50.00
                     Multiplied by holiday rate                            260%
                     Hourly rate on a holiday                        P   130.00
                     Multiplied by overtime premium                          30%
                     Overtime premium per hour                       P    39.00
                     Add: Hourly rate on a holiday                       130.00
                     Overtime Pay per hour                           P   169.00
                     Multiplied by overtime hours worked                    2.00
                     Overtime Pay                                    P   338.00

        Shorter solution         50 x 2.6 x 1.30 x 2 = 338




NIGHT SHIFT DIFFERENTIAL


   Labor Code Art. 86. Night shift differential.

   Every employee shall be paid a night shift differential of not less than ten percent (10%)
   of his regular wage for each hour of work performed between ten o’clock in the evening
   and six o’ clock in the morning.



 Illustration 3:

 Jerome Delgado who worked at SR Inc. has a daily rate of P320. On his first month
 at the company, he worked on a second shift (2pm to 10pm). But now he was
 assigned to work on a night shift (10 pm to 6 am).

 Requirement: Compute for his new hourly rate.


                 Solution
                            Daily rate                           P       320
                            Divided by regular working hours               8
                            Hourly rate on regular shift                  40
                            Night shift differential (P40 x 10%)           4
                            Hourly rate                          P        44




        Maria Corazon Cuadra – Gabayan (03/2011)
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Payroll accounting



 Illustration 4:

 Jerome Delgado who worked at SR Inc. has a daily rate of P320. His regular work
 schedule is on a second shift (2pm to 10 pm). But he was requested to work overtime
 starting 10 pm to 1 am.

 Requirement:

  Compute for his (a) overtime pay and (b) day’s gross pay under each independent cases:

          Case 1 – regular working day
          Case 2 – special holiday
          Case 3 – special holiday falling on her rest day
          Case 4 – regular holiday
          Case 5 – regular holiday falling on her rest day




Case 1 – regular working day

                     Daily rate                                  P   320
                     Divided by regular working hours                  8
                     Hourly rate on regular shift                P    40
                     Add: Overtime premium (P40 x 25%)                10
                     Overtime rate on regular shift              P    50
                     Add: Night shift differential (P50 x 10%)         5
                     Overtime rate on night shift                P    55
                     Multiplied by number of hours overtime            3
                     Overtime pay                                P   165 (a)
                     Add: Daily basic pay                            320
                     Day's gross pay                             P   485 (b)




        Shorter solution        a. (320/8 x 1.25 x 1.1 x 3 ) = 165
                                b. 165 +320 = 485




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Payroll accounting




Case 2 – special holiday


        Shorter solution       a. (320/8 x 1.3 x 1.3 x 1.1 x 3 ) = 223.08
                               b. 223.08 +416 = 639.08



Case 3 – special holiday falling on her rest day

        Shorter solution       a. (320/8 x 1.5 x 1.3 x 1.1 x 3 ) = 257.40
                               b. 257.40 +480 = 737.40




Case 4 – regular holiday

        Shorter solution       a. (320/8 x 2 x 1.3 x 1.1 x 3 ) = 343.20
                               b. 343.20 +640 = 983.20




Case 5 – regular holiday falling on her rest day

        Shorter solution       a. (320/8 x 2.6 x 1.3 x 1.1 x 3 ) = 446.16
                               b. 446.16 +832 = 1,278.16




13TH MONTH PAY

       The Philippine labor code requires employers with more than 10 employees to give 13th
month pay to all employees who have rendered service for at least a month. This shall be paid on
or before December 24. Employees who have rendered a full year will be given an average of a
full month pay. For those who rendered less than a year will have a pro-rated average one month
pay.




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Payroll accounting



 Illustration 5a:

          Samantha Imperial worked a full year. Her fixed monthly salary is P10,000
          starting January up to December. How much is her 13th month pay?

 Answer 5a: P10,000

 Illustration 5b
          Samantha Imperial worked a full year. Her fixed monthly salary as a
          probationary clerk is P10,000 starting January 1 to June 30. On July 1 her
          salary has increased to P12,000 after being promoted as a regular employee.
          How much is her 13th month pay?

 Solution 5b:
                     Monthly rate x months outstanding = Average
                     P10,000              6              P60,000
                      12,000              6                72,000
                     Total                               P132,000
                     Divided by months in year                 12
                       th
                     13 month pay                        P11,000



BONUS
       Bonus is additional compensation given by employers to officer and employees for
superior income during the year. Its main purpose is to motivate employees to be more
productive. This is management’s discretion and is not required by law.


DEDUCTIONS FROM GROSS PAY
     A deduction from gross pay refers to the amount of money withheld from the employees’
pay.

STATUTORY DEDUCTIONS
     The following deductions are required:
     1. Withholding taxes
     2. Social Security System (SSS) Premium Contribution
     3. Philhealth (PHIC) Premium Contribution
     4. Pag-ibig or Home Development Mutual Funds (HDMF) Premium Contribution

OTHER DEDUCTIONS
     1. Union dues
     2. Unathorized absenteeism and tardiness
     3. Employees’ advances /vales
     4. Employees’ retirement fund / pension fund
     5. Credit union/cooperative

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WITHHOLDING TAXES
       Employees earning above minimum wage are income taxable. These income taxes are
withheld by employers and remitted to BIR on the 10th day of the following month.

        Employees’ income taxes may be withheld on a daily, weekly, semi-monthly or monthly
basis depending on the payroll payment schedule of the employer. It is computed with the aid of
the revised withholding tax tables (effective January 1, 2009) or using the annualized method.

Tax type
       S – single
       ME – married
       S1/ME1 – single /married with one qualified dependent child
       S2/ME2 – single /married with two qualified dependent children
       S3/ME3 – single /married with three qualified dependent children
       S4/ME4 – single /married with four qualified dependent children


Personal exemptions

       Each working employee single or married is entitled to P50,000 personal exemption with
an additional P25,000 for every qualified dependent child but not exceeding four children


 Illustration 6
          Charlot Kim, married with one qualified dependent child has a monthly gross
 pay of P15,000. Her salary is paid on a semi-monthly basis.

 Requirement
        a. Compute the withholding tax for one pay period using the tax table
        b. Compute the withholding tax for one pay period using the annualized
           method
        c.
Solution a

                Monthly gross pay                       P    15,000.00
                Divided by pay periods                               2
                Semi-monthly gross pay                        7,500.00

                Fixed tax                                P     354.17
                Variable tax (7,500-6,042) x 20%               291.60
                Total withholding tax for one pay period       645.77

                 Please refer to attached tax table



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Payroll accounting


Solution b
         Monthly gross pay                                               P     15,000.00
         Multiplied by number of months in a year                                     12
         Annual gross pay                                                P    180,000.00
         Less: Personal exemption (50,000+25,000)                              75,000.00
         Net taxable compensation                                        P    105,000.00

           Please refer to graduated tax rates below

           Fixed tax                                                 P          8,500.00
           Variable tax (105,000 - 70,000) * 20%                                7,000.00
           Estimated annual income tax                                         15,500.00
           Divided by number of pay period in a year (12 months x 2)                  24
           Withholding tax for one pay period                                     645.83

There is a difference of P 0.06 (P645.83 - 645.77). The differences are adjusted at year-end such
that total taxes withheld will be equal to taxes due.


Graduated income tax rates:

Not over P10,000                                                5%
Over P10,000 but not over P30,000                   P 500 +     10% of excess over P10,000
Over P30,000 but not over P70,000                   P 2,500 +   15% of excess over P30,000
Over P70,000 but not over P140,000                  P 8,500 +   20% of excess over P70,000
Over P140,000 but not over P250,000                 P22,500 +   25% of excess over P140,000
Over P250,000 but not over P500,000                 P50,000 +   30% of excess over P250,000
Over P500,000                                       P125,000+   32% of excess over P500,000



PAYROLL CYCLE

    1.   Gathering of payroll data
    2.   Payroll computation
    3.   Preparation of entries to be recorded in the books of accounts
    4.   Recording of payroll data after every payday from January to November summarizing the
         following data to facilitate preparation of the Alphabetical Listing of Employees from
         whom taxes where withheld:
    5.   Preparation of remittance schedules and accomplishment of payment returns for each of
         the following government agencies
    6.   Preparation of quarterly collection list for SSS and PHIC
    7.   Making tax adjustments, such that TAXES WITHHELD = TAXES DUE
    8.   Preparation of BIR form 2316 for each employee, and submission of ALPHALIST


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Payroll accounting


COMPREHENSIVE ILLUSTRATION


Konoha Inc. has the following payroll policies and assumptions
      1. Equivalent daily rate is computed using 22 days per month, 250 days in a year
      2. Working days (Monday to Friday – 8 to 12noon; 1-5pm)
      3. Tardiness and under-time is deducted from payroll
      4. Only authorized absences are entitled to payments
      5. Payroll is made semi monthly, every 15th and 30th
      6. Statutory deductions are made every 15th; however withholding tax is deducted every
          15th and 30th.


     Name             Employee status          Position          Rate          Tax type
Naruto Uzumaki           Regular               Manager      15,000 / month       ME
Sasuke Uchiha           Contractual           Sales Clerk      200 / day          S
Sakura Haruno            Regular              Bookkeeper     8,000 / month      ME1
Hinata Hyuga           Probationary            Cashier       7,500 / month      ME2



Name                 Cash              Tardiness SSS loan    Overtime     Hours worked on
                     advance                                 hours        special holiday
Naruto Uzumaki                                        525
Sasuke Uchiha                           30 mins.                               8 hours
Sakura Haruno              200          45 mins.                3 hours
Hinata Hyuga                                                    3 hours        9 hours



Requirements:
       1. Prepare the payroll sheet for the 15th pay period
       2. Prepare the schedule for the following remittances:
              a. HDMF
              b. PHIC
              c. SSS (contribution and loan)
       3. Prepare all the necessary entries




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Payroll accounting




Requirement 1
Konoha Inc.
Payroll Sheet
For the period ______________

Name      Daily      Basic    Overtime     Tardiness/   Grosss pay    Cash      Withholding   HDMF      PHIC     SSS         SSS     Total          Net pay
          rate       pay      pay          Undertime                  Advance   tax                              contrib..   loan    Deductions
Naruto    720         7,500                                7,500.00                  854.17       300   187.50     500.00      525       2,366.67    5,133.33
Sasuke    200         2,260                    12.50       2,247.50                       0        88    50.00     150.00                  288.00    1,959.50
Sakura    384         4,000     180.00         36.00       4,144.00   200             84.63       160   100.00     266.70                  811.33    3,332.67
Hinata    360         3,858     244.80                     4,102.80                       0       150    87.50     250.00                  487.50    3,615.30
  Total              17,618     424.80         48.50      17,994.30   200            938.80       698   425.00   1,166.70     525        3,953.50   14,040.80

Computation for daily rate                                                      Computation for overtime pay
Naruto       15,000 x 12 / 250 = 720                                            Sakura       384/8 x 1.25 x 3 = 180
Sakura       8,000 x 12 / 250 = 384                                             Hinata       (360/8 x 1.25 x 3) + (360/8 x 1.3 x 1.3) = 244.80
Hinata       7,500 x 12 / 250 = 360

Computation for basic pay                                       Computation for tardiness/ undertime deduction
Naruto       15,000 / 2 = 7,500                                 Sasuke       200/8 x 30/60 = 12.50
Sasuke       (200 x 11) + (200 x 30%) = 2,260                   Sakura       384/8 x 45/60 = 36.00
Sakura       8,000 / 2 = 4,000
Hinata       (7,500 / 2) + (360 x 30%) = 3,858
Note: Sasuke’s and Hinata’s basic pay includes 30% holiday premium for working on a special holiday

Computation for withholding taxes
Naruto                                                                          Sakura
       Fixed                                            354.17                           Fixed                                   20.83
       Variable (7,500 – 5,000) x 20%)                  500.00                           Variable (4,180 -3,542) x 10%)          63.80
                     Total                              854.17                                         Total                     84.63

Note: Sasuke has a daily rate which is below minimum wage, therefore he is exempted from tax
      Deduction for tardiness or undertime of Sakura is not considered as deductible for tax purposes


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Payroll accounting


        Requirement 2

        Schedule of Pag-ibig / HDMF Contributions


                          Name           Employee’s       Employer’s    Total
                                           share            share
                     Naruto Uzumaki             300               100           400
                     Sasuke Uchiha               88                88           176
                     Sakura Haruno              160               100           260
                     Hinata Hyuga               150               100           250
                     Total                      698               388         1,086


        Note: Pag-ibig fund contribution

                      Monthly salary                   Contribution
                      P1,500 and below                        1%
                      Exceeding P1,500 to P5,000              2%
                      Exceeding P5,000 (optional)             2%
        For employees with above P5,000 salary, the employer may opt to contribute P100 only.


        Schedule of Philhealth / PHIC Contributions


                          Name           Employee’s       Employer’s    Total
                                           share            share
                     Naruto Uzumaki          187.50           187.50           375
                     Sasuke Uchiha            50.00            50.00           100
                     Sakura Haruno           100.00           100.00           200
                     Hinata Hyuga             87.50            87.50           175
                     Total                   425.00           425.00           850


        Schedule of SSS Contributions and loan


                Name             Employee’s        Employer’s    Total          SSS loan
                                   share             share    Contributions
         Naruto Uzumaki              500.00          1,090.00      1,590.00           525.00
         Sasuke Uchiha               150.00            328.00        478.00
         Sakura Haruno               266.70            575.30        842.00
         Hinata Hyuga                250.00            540.00        790.00
         Total                     1,166.70          2,533.30      3,700.00           525.00


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Payroll accounting




        Requirement 3

                 Salaries Expense                            17,994.30
                         Advances to employees                                     200.00
                         Withholding taxes payable                                 938.80
                         Pag-ibig/ HDMF Premium Payable                            698.00
                         Philhealth/PHIC Premium Payable                           425.00
                         SSS Premium Payable                                     1,166.70
                         SSS loan payable                                          525.00
                         Cash *                                                 14,040.80
                                To record payment of salaries.

        * May also credit the following:
              a. voucher payable - if voucher system is used;
              b. accrued salaries or salaries payable - when salaries are not yet paid;
              c. cash in bank – when check is issued.



                 Pag-ibig/ HDMF Premium Expense                             388.00
                 Philhealth/PHIC Premium Expense                            425.00
                 SSS Premium Expense                                      2,533.30
                        Pag-ibig/ HDMF Premium Payable                                 388.00
                        Philhealth/PHIC Premium Payable                                425.00
                        SSS Premium Payable                                          2,533.30
                               To record employers share.


                 Withholding taxes payable                                  938.80
                 Pag-ibig/ HDMF Premium Payable                           1,086.00
                 Philhealth/PHIC Premium Payable                            850.00
                 SSS Premium Payable                                      3,700.00
                 SSS loan payable                                           525.00
                        Cash in bank                                                 7,099.80
                               To record remittances.



       Note: Withholding taxes remittance to BIR, SSS and PHIC are due every 10th day of the
month following the month the contribution was withheld. Meanwhile, Pag-ibig contribution’s
due date varies depending on the first letter of the company’s name. (please refer to back of the
HDMF remittance form)




        Maria Corazon Cuadra – Gabayan (03/2011)
                                                                                                - 18 -
Payroll accounting




JESS Please attach the following:
      1. revised withholding tax table (2009),
      2. SSS contribution table (2007),
      3. Philhealth contribution table (2007)
      4. BIR form 1601 C
      5. BIR form 2316
      6. SSS R5
      7. SSS R3
      8. PHIC M1A
      9. PHIC quarterly collection list
      10. HDMF remittance form




        Maria Corazon Cuadra – Gabayan (03/2011)
                                                   - 19 -

				
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