You will demonstrate your skills and knowledge by completing a scenario-based project.
Task overview and context
You receive an email from Aziz Singh, Finance Manager.
Subject: Temporary move to the finance department
Due to recent growth within the IT team, the financial operations department has been under extreme pressure in getting the payroll checked and salaries and wages authorised within organisational time frames – especially with the end of financial year only two weeks away. I understand that you have some previous experience in managing payrolls so I have requested that you temporarily move to the financial operations department to assist me until we are able to find a suitable applicant to fill the role of Payroll Assistant. Your first task will be to implement three new staff members into the payroll system and reconcile their wages, taking into account ATO requirements and deductions and ensuring that all payments are dispatched to government authorities accurately and in accordance with legislative requirements. I have included the necessary information about the new staff members below. Please document all processes into a report to assist in the training and recruitment of the Payroll Assistant. This information will be used as part of the finance department’s induction process. You will need to access the Australian Taxation Office website to assist you in some of the payroll tasks. I have provided details of what to include in the report in the ‘Instructions to the candidate’ section that follows. I look forward to having you on board and thank you in advance for your valued assistance at this time.
Information about the new staff members
The IT department has employed three new staff members. Please manage the payroll for these three staff. BizOps Enterprises pays full-time staff $19.38 per hour, with overtime paid at time and a quarter on weekdays and time and a half on weekends. Part-time staff are paid $23.46 per hour on weekdays, with overtime paid at time and a fifth on weekdays and time and a quarter on weekends. Casual staff are paid $32.39 per hour as a flat rate.
Task overview and context
Weekly time sheet
Name Employment type Weekdays O/Tweekdays O/Tweekends
Sasha Rose F/T 38.00 2.75
Milan Swift P/T 22.80 6.25
Arna Milt Cas 13.75
Tax withholding deductions for each staff member
9% of any wages for which the Superannuation Guarantee Charge (SGC) applies
Sasha makes a 17% personal contribution to her superannuation each month
Sasha makes a 10% health fund deduction per week
Sasha pays union fees of $29.47 per week
Milan makes a $25 personal contribution towards his superannuation per week
Milan makes a 13% health fund deduction per month
Milan makes a childcare payment of $75 per week
Arna pays union fees of $47.98 per month
Arna makes a Centrelink payment of $23.67 per week
Instructions to the candidate
You will need to access and read the following BizOps Enterprises policies, procedures and templates:
Payroll information and procedures
Information management procedures
Salary payment authorisation form
See the ‘Resources required’ section for how to access these documents.
Complete the following tasks and submit your responses as a collated report. Ensure you use a format and style suited to the context and audience, including the use of appropriate headings. Attach any supporting documents, as appropriate.
Establish procedures for payroll management:
a) Explain the process you used to plan, implement and evaluate routine and non-routine tasks to achieve payroll goals and time lines.
b) Describe the control measures you undertook to safeguard BizOps’s financial resources, including the payroll details of the three new employees, in accordance with legislative and organisational requirements.
c) Explain the statutory obligations that must be adhered to and records that must be kept for the three employees, including the specified periods determined by government legislation.
d) Explain how to identify and interpret information from organisational policies, legislative and industry-related material.
Prepare payroll data:
a) Source and use nominated industrial awards, contracts and government legislation to calculate gross pay and annual salaries for the payroll of the three new employees.
b) Calculate their statutory and voluntary deductions for the weekly pay period using government and employee documentation. Describe the process you used.
c) Explain and prepare specific information that clearly conveys an understanding of outcomes required for the three BizOps employees.
d) Highlight the importance of recording data accurately using relevant format, style and language suited to the context and audience. Provide an example of when you did this while managing the payroll for the three new employees.
Authorise payment of salaries:
a) Explain the processes or steps you undertook to check the payroll and authorise salaries and wages for payment in accordance with organisational policy and procedures.
b) Describe the processes for dealing with salary, wage and related inquiries in accordance with organisational policy and procedures.
c) Provide examples of documents authorising the payment of wages and salaries made to the three new employees.
Administer salary records:
a) Explain the steps you undertook to process declaration forms for new and existing employees in accordance with Australian Taxation Office requirements.
b) Make the appropriate calculations and implement them to ensure work is completed according to predetermined deadlines.
c) Provide details on how you prepared and dispatched payments for the three BizOps employees to appropriate government authorities accurately and in accordance with relevant government legislation.
d) Explain the steps you took to ensure that you created accurate payroll management records for the three BizOps employees.
e) Describe the process undertaken to calculate and transcribe group tax amounts and make payments in accordance with taxation procedures.
f) Assume that the three employees will work the same hours in their second week as they did in their first, and that you have been asked to calculate their payment summary amounts from the two weeks of salary records. Explain the methods you used to prepare and reconcile their payment summaries.
g) What data and calculations did you use to reconcile the three employees’ salaries, wages and deductions in accordance with all legislative and organisational requirements?
Payroll information and procedures © Aspire Training & Consulting Page 1 of 6 Document date: July 2015 Types of Payroll The financial operations department performs the following major payroll functions for BizOps Enterprises. Permanent staff payroll This payroll is BizOps’ major payroll and includes all permanent employees: • Permanent positions based on an hourly rate of pay • Permanent positions based on salary with provision for overtime Payments for this payroll are normally paid on a weekly basis. Casual staff payroll This payroll includes all staff who work on an irregular basis: • contract workers based on an hourly rate of pay • casual appointments based on an hourly rate of pay Payments for this payroll are normally paid on a weekly basis. Payroll requirements for all staff Prior to permanent or casual employees being paid, the payroll team must receive the following information: • An authorised notification of commencement of duty form • An electronic funds transfer (EFT) form for payment directly into nominated bank accounts • A tax file number (TFN) declaration form These forms must be provided as soon as the employee commences duty. Without these three forms being received and processed, no payments can be made for the new employee via the payroll system. Notification of commencement of duty form On the first day of appointment, all employees should complete a notification of commencement of duty form, sign it and have the delegated manager sign the form as confirmation of commencement of work. Preferably, this form should be faxed to the payroll team. This documentation needs to be provided to the payroll team prior to the deadline as outlined on the payroll calendar. Payroll information and procedures © Aspire Training & Consulting Page 2 of 6 Document date: July 2015 Employees commencing after this deadline should forward this form as soon as practicably possible. Forms received after the deadline will be processed in the next available pay. EFT form The EFT form needs to be completed and forwarded to the payroll team, giving authority for the weekly pay to be deposited into an account with a bank or credit union. The account details must be correct, indicating the name of the bank (e.g. CBA), the BSB number (six digits), the account number (maximum 9 digits) and the account name. TFN declaration form This is an Australian Taxation Office (ATO) form that is available from employee induction kits, most major newsagencies, the human resources department and the financial operations department. The TFN declaration form should be forwarded to the payroll team with the forms noted above for permanent and casual staff. This form can be faxed, but the original should also be sent in the internal mail. A TFN declaration only needs be lodged with BizOps once, unless an employee’s taxation circumstances change; for example, where a previously advised HELP debt has been paid off. If a new employee does not have a TFN, they should contact the ATO to make an application. A TFN declaration form should still be completed advising that an application for a TFN has been lodged. The employee then has 28 days to provide the payroll team with their TFN before taxation automatically switches to the highest marginal rate. If this form is not completed and returned to the payroll team prior to a wage or salary payment, then BizOps is obliged, by the ATO, to deduct tax at the highest marginal rate. Permanent and casual payroll processing Permanent and casual pay dates Permanent and casual pays are processed automatically each week on a Tuesday into the employee’s nominated bank account/s. Actual payments are normally sent to the bank on the preceding day (Monday). Where this transfer will be affected by a public holiday or when BizOps is closed during the Christmas break, transfers will be processed on an earlier day. This is to ensure that payment is in the account/s on the Tuesday pay day. Permanent employee pay rates Permanent staff salaries and hourly rates are confidential as they are negotiated individually with each employee through the performance review process. Payroll information and procedures © Aspire Training & Consulting Page 3 of 6 Document date: July 2015 Casual employee pay rates Refer to the enterprise agreement for current casual pay rates. Completion of time sheets Time sheets should be submitted by all staff on a weekly basis so that staff are paid correctly for the number of normal and overtime hours they have worked. Payslips Payslips are prepared and made available to all staff through an internet service with a secure access number. This number will be posted to all staff after commencement of duty forms have been received and processed. Where any factors limit the ability for employees to access their payslips through the internet service, they can opt to receive their payslips by mail by contacting the financial operations department and completing the appropriate form. Deadlines, pay variations and changes to pay dates Deadlines for variations to payroll Any changes to permanent or casual staff’s pay details must reach the payroll team by 12.00 pm Wednesday. Any variations received by this time will be accounted for in the next pay run. Variations that are not received in time will be processed in the following pay. Variations to deadlines and pay dates The payroll team may, at the discretion of the Finance manager, bring forward a deadline or pay date if required; for example, due to holiday periods or public holidays. End of financial year pay dates In order to meet end of financial year commitments, the deadlines for payroll may change. Staff are advised to check the end of financial year guidelines with their manager for details. Payroll information and procedures © Aspire Training & Consulting Page 4 of 6 Document date: July 2015 Deductions General employee deductions Employees may have deductions directed to nominated organisations and institutions on their behalf by the payroll team. These deductions can be detailed on the payroll deductions authority form or advised to the payroll team via email. This guideline is not intended to provide information on the types of deductions that staff may have. Contact the payroll team to discuss any deduction requests. Cancellation of deductions To cancel a deduction, staff must complete a payroll deductions authority form or advise the payroll team via email. Deductions made on behalf of staff From time to time, some government organisations may require BizOps to deduct amounts from an employee’s pay in line with current legislation; for example, for child support. Where such requests are received, these payments will be processed and shown on the employee’s payslip. Amounts forwarded to the ATO in line with the information the employee has provided on their TFN declaration form will be shown on their payslip as a deduction. Taxation Matters Pay-as-you-go (PAYG) tax rates and thresholds PAYG is the taxation that is withheld from wages and salaries and paid by BizOps, on behalf of staff, to the ATO. BizOps is required to tax staff on a weekly basis in accordance with the ATO weekly tax tables and the information provided on the TFN declaration form. Please contact the payroll team or refer to the ATO website for further information and current tax rates. HELP and SFSS debt thresholds Employees who have identified on their TFN declaration forms that they have an accumulated HELP debt are automatically set up with a tax status that indicates this fact. This tax status does not necessarily mean that any HELP debt repayment is deducted. If an employee is below the tax threshold for HELP debt repayment, then taxation is at the standard PAYG rates. Employees who have identified on their TFN declaration forms that they have an accumulated SFSS debt are automatically set up with a tax status that indicates this fact. This tax status does not necessarily mean that any SFSS repayment is deducted. If the Payroll information and procedures © Aspire Training & Consulting Page 5 of 6 Document date: July 2015 employee is below the tax threshold for SFSS repayment, then taxation is at the standard PAYG rates. Payroll procedures 1. Records will be maintained for all BizOps employees showing: – hours worked and rate of pay – gross salary or wages – tax and details of all other payments and deductions – annual, personal, long service and other leave available and taken – allocation of time worked on jobs – superannuation deductions. 2. Salaries and wages will be paid on the basis of hours of attendance recorded on an approved time sheet. 3. Time sheets will be submitted weekly by the employee to their immediate supervisor for authorisation, and then forwarded to the payroll team. 4. All claims for overtime must be authorised by the relevant manager on the time sheet. 5. Hours of work, flexi-time and similar will be paid in accordance with individual and enterprise agreements. 6. All annual leave and long service leave must be applied for in writing by employees and authorised by their supervisor prior to commencement of the leave. 7. All personal leave must be authorised by the relevant supervisor as soon as practical after the period of absence. 8. Additional hours resulting in the accrual of flexi-time or payment of overtime must be approved by the relevant manager or director prior to undertaking the additional hours. 9. A responsible officer shall certify the pay sheets for payments of salaries and wages for each period in the following manner: I certify that: • the persons named on these pay sheets were actually and bona fide employed for the period shown • the rates of pay are correct • the additions and calculations have been checked. 10. Unclaimed or unpaid salaries or wages will be held in BizOps’s general operating bank account. 11. The employment procedures outlined in this document must be followed before new employees are entered into BizOps’s payroll. Payroll information and procedures © Aspire Training & Consulting Page 6 of 6 Document date: July 2015 12. Payroll deductions on behalf of employees will be limited to: – taxation liabilities – voluntary superannuation payments – health insurance – child support agencies – registered banking institutions – social events or clubs (for example, Christmas dinner, X-Lotto Club).