PAYROLL

Document Sample
PAYROLL Powered By Docstoc
					                  PAYROLL
• Payroll is one of the series of accounting
  transactions dealing with the process of
  paying employees for services rendered by
  them.

• It is used and maintained by accounting
  people.
         COMPONENTS OF PAYROLL
• It is necessary to understand the various components of payroll before
  designing or selecting the available payroll software.
• The most common data required to generate payroll are –
    –   Basic pay (fixed salary part)
    –   Dearness allowance (DA) (the allowance for increased cost of living)
    –   House rent allowance (HRA) (for house )
    –   Other allowances (travel allowance, special allowances etc.)
    –   Leave travel allowance (LTA) (for travelling expenses)
    –   Medical allowances (self, family …)
    –   Leaves entitled (CL, SL etc.)
    –   Deductions under various heads (as per tax norms)
    –   Incentives or bonus (for profits they make for company)
    –   Overtime payments (for more than 8 hours a day)
    –   Contribution to provident fund (12% of basic pay; employer adds the same)
    –   Contribution to pension scheme (for a better old age)
    –   Income taxes (Net salary = gross salary - deductions)
      COMPUTERISED PAYROLL
• Payroll can be generated through computers
  by using packages available or outsourcing its
  design as per the requirements of the
  organization.
• Package like : tally
        COMPUTERISED PAYROLL
• Introducing computerized payroll system in the system/
  business or organization can bring positive changes
  saving hours producing and updating physical payroll
  journals and records.

• Computerized payroll system come in the form of
  software packages that let you install on company’s
  computers.

• Whether you are a small/ medium or large
  organization, this type of the system creates efficiency
  as all records can be stored, organized and maintained
  electronically.
SAMPLE PROFORMA
FUNCTIONS OF PAYROLL DEPARMENT
For questions or problems related to-

•   Sick and Vacation Leave balances
•   Workers Compensation claims processing (HR)
•   Workers Compensation benefits (HR)
•   WEB Reporting/Timesheets
•   Lost warrant/stop payment
•   Payments to vendors for withholding taxes, voluntary deductions etc.
•   Voluntary deductions set-ups
•   State Disability Insurance calculations
•   Workers Compensation calculations
•   Enrolling/changing direct deposit
•   Union dues changes
    FUNCTIONS OF PAYROLL DEPARMENT
        – Capturing time efficiently
        – Auditing procedures prior to processing
        – Correcting errors prior to processing
        – Record retention
        – New hires
        – Payroll reconciliation, tax deposits and quarterly
          reporting
        Assignment: write more functions from below link
http://books.google.co.in/books?id=0gwZboBNf44C&pg=PA1&lpg=PA1&dq=FUNCTIONS+OF+PA
YROLL+DEPARTMENT&source=bl&ots=riEYFNFGD0&sig=oRIWuwJBgJKT1dbUhhyzOH3ufO0&hl=
en&sa=X&ei=20EGUZePDYfXrQeN3oGQDg&ved=0CEkQ6AEwAw#v=onepage&q=FUNCTIONS%2
0OF%20PAYROLL%20DEPARTMENT&f=false
    PAYROLL REPORTS GENERATED BY
           PAYROLL SYSTEM
• Pay slip
• Salary sheet/ pay sheet
• Employee’s salary structure
• Annual salary statement (annual sheet)
• Department-wise summary of earnings and
  deductions
• Bank statement
• Cash/ cheque/ DD statement
• Loan balance statement
•   Loan installment statement
•   Leave balance statement
•   Monthly leave statement
•   Bonus statement
•   Bonus provision for the year
•   Gratuity statement
•   Perquisite register
•   Attendance statement
•   Arrears break up report
•   Professional tax cumulative statement
•   Professional tax detailed statement
•   Total man days report
•   Over time payment statement
          OTHER MIS REPORTS
• List of new joinee
• List of employees resigned
• List of employees on rolls etc.
 METHODS OF PAYMENT OF WAGES
• TIME WAGE METHOD:
      – Wages are paid on the basis of the time spent on the job
        irrespective of the amount of work done.

    • ADVANTAGES:
          »   It is the simplest and the old method
          »   It is easy to understand
          »   Earnings of workers are regular and fixed
          »   A worker can show his skills
          »   No pressure of time on worker so quality can be raised
          »   It is an objective method
          »   Learners can concentrate on the learnings
• DISADVANTAGES
     » No incentive for the better performance
     » Guaranteed remuneration makes workers dull and non
       performing
     » Calculation of the labour cost/ unit is difficult as the total
       wage bill does not change
     » In the absence of the motivating and challenging rewards,
       workers performance declines.
     » Control over the labour becomes difficult as they feel
       secured.
• PIECE WAGE METHOD:
      – Under this method the remuneration is based on the total
        work done rather than the amount spent on it.


    • ADVANTAGES
          » There is a direct relation between the effort and the
            reward.
          » The method is just and fair for all
          » Management can distinguish between all types of
            workers.
          » The cost of labour/ unit can be easily calculated.
          » Cost of supervision is low
• DISADVANTAGES
     » It is very difficult to fix rates
     » Employer can also cut at times the work if they find
       employee is producing more.
     » Earnings of the workers are not stable
     » Workers feels insecure and dissatisfied
     » Quality can be compromised in order to achieve the high
       targets
     » A feeling of jealous can be there between performing and
       non performing workers
     » Trade unions don’t like it.
  Final exam oriented assignment on
        Payroll system (UNIT - 3)
1. What are the different reports generated by
   payroll system.

2. Describe various items that should be
   considered for developing a payroll program.
                       or
   Explain the various inputs requirements for
   payroll system.
3. “payroll system is customer specific”. Do you
  agree with the statement.

4. Design a screen for entering data related to
  employees in master file.
                        OR
   Design a suitable computerised wage
  accounting system for a large firm employing
  various types of labour.
5. Basic functions of pay roll department.

6. What is meant by pay roll ? Explain the process of
   computing gross income, pension and gratuity. What
   are the precautions which should be kept in mind
   while making the wage payment?
7. Explain the process of computerisation of pay
  roll.

8. Explain time wage and piece wage system of
  wage payment. Explain the advantages and
  disadvantages of each method.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:5/15/2013
language:Unknown
pages:21
yaofenji yaofenji
About