FNSTPB402 Establish and maintain a payroll system 2nd Edition … · Check and create required accounts to process payroll in the Chart of Accounts. Set the payroll calendar Set up

Certificate IV

FNSTPB402

Establish and maintain a payroll system

2nd Edition

Xero

User Guide

FNSTPB402

ISBN: 978-1-925782-97-4

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© Copyright 2019 Learner Link Version 20.01 Xero

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Learner Link cannot attest to the accuracy of this information. Use of a term in this manual should not be

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Software Description

This course has been designed for users of Xero as at December 2019.

The case study in this material uses fictional information.

Xero Learn Content Partner

Kerryn Maguire of Maguire Printing Pty Ltd is a content partner to Xero Learn. Learner Link is a registered

business of Maguire Printing Pty Ltd.

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Contents

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Contents Unit 1 Introduction ............................................................... 1

Purpose of this User Guide ....................................................... 1

Prerequisites ....................................................................... 1

Delivery ............................................................................ 2

Relationship to Competency Standards ........................................ 2

Organisation of this User Guide ................................................. 3

What you will need ................................................................ 3

Conventions used in this User Guide ............................................ 4

Symbols used in this User Guide ................................................. 5

Download Student Data Files .................................................... 6

Access your organisation ......................................................... 7

Check Organisation Details ....................................................... 9

Change User Role to Payroll Admin ............................................ 12

Unit 2 Payroll Legislation and Requirements ........................... 15

Overview ........................................................................... 15

Fair Work .......................................................................... 16

Fair Work Act 2009 ............................................................... 18

New Employment Agreements (after March 2008) .......................... 22

National Employment Standards (NES) ........................................ 23

Award Modernisation ............................................................. 25

Bookkeepers Code of Conduct .................................................. 25

Payroll Tax ........................................................................ 26

Rights and obligations of an Employee ........................................ 26

Employee Information ........................................................... 28

Tax File Numbers ................................................................. 28

Completing a Tax File Number Declaration - Employer ..................... 30

Employer obligations ............................................................. 31

Summary of employer obligations covered in this unit ..................... 38

Work Health and Safety ......................................................... 39

Review of Payroll Legislation ................................................... 40

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Research – Employee Agreements ............................................. 43

PAYG Withholding ................................................................ 47

Paid Parental Leave .............................................................. 48

Eligibility to work in Australia .................................................. 49

Superannuation Eligibility ....................................................... 49

SuperStream ...................................................................... 50

Salary Sacrifice ................................................................... 51

Reportable Employer Superannuation Contribution (RESC) ................ 52

Long Service Leave ............................................................... 53

Lump Sum Payments ............................................................. 55

Terminations ...................................................................... 55

Reference sites ................................................................... 59

Unit 3 Tax Agent Registration and Requirements ..................... 61

Tax Agent Services Legislation ................................................. 62

Registration Requirements ...................................................... 64

Unit 4 Setting up Payroll ................................................... 73

About Hot Bod Yoga .............................................................. 74

The Clerks Private Sector Award 2010 ........................................ 77

Set Up Payroll Accounts in Xero ................................................ 78

Set Pay Calendar ............................................................... 80

Apply a Holiday Group ........................................................... 82

Set Up Pay Items ............................................................... 83

Set Ordinary Hours to be reported at W1 ..................................... 83

Create Overtime pay items ..................................................... 84

Set up Time and Quarter Ordinary Times Earnings .......................... 86

Add Expense Accounts to Chart of Accounts ................................. 88

Add an Earnings Allowance Pay Item: Car Allowance ....................... 90

Add an Earnings Allowance Pay Item: Meal Allowance ..................... 92

Add a Taxable Earnings Allowance Pay Item: First Aid Allowance ........ 93

Determining what to set in an Allowance .................................... 95

Setting up an Allowance taxable but exempt from Super: eg Tools ..... 96

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Pay Items: Deductions ........................................................... 98

Create Liability Accounts for Deductions Payable ........................... 99

Pay Items: Leave .............................................................. 103

Apply Leave Loading to Annual Leave ....................................... 104

Superannuation .............................................................. 105

Add a Superannuation Fund to an Organisation ............................ 106

Setting up Employees .......................................................... 108

Add Employee Contact Details ............................................... 111

Add Employee Employment Details .......................................... 112

Add Employee Super Fund Details ........................................... 112

Enter Tax Details and Leave Loading Eligibility ............................ 113

Enter Leave Entitlements ..................................................... 113

Personal Leave Entitlements .................................................. 115

Set Up Pay Template ........................................................... 117

Add Details for a casual Worker .............................................. 125

Set Up Overtime Earnings for a Casual Employee ......................... 129

Activity Check Employee Details ............................................. 133

Unit 5 Processing Payroll .................................................. 135

Payroll Procedures ............................................................. 136

Notifiable Data Breaches Scheme ............................................ 138

Process Pay Run – Week 1 ..................................................... 139

Check Wage Manually .......................................................... 146

Payroll Reports .................................................................. 148

Leave Balances Report ......................................................... 151

Balance Sheet Report .......................................................... 152

Profit and Loss Report ......................................................... 153

Actually Pay Employees ....................................................... 154

Email Payslips ................................................................... 155

Print Payslips .................................................................... 156

Create an ABA File ............................................................. 158

Entering Employee Wage as a Spend Money Transaction ................. 159


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Check Wage Manually .......................................................... 166

Use Spend Money to record Wage Payments ............................... 168

Process Pay Run - Week 3 ..................................................... 170

Entering Personal Leave: Create Leave Request .......................... 172

Fixing an Error in Posted Pay Run ............................................ 176

Paying an Employee Annual leave – Week 4 Pay Run ..................... 178

Conduct a Bank Reconciliation and Enter Wage Payments ............... 182

Import a Bank Statement ..................................................... 183

Create Transaction during Bank reconciliation ............................ 187

Create a Bank Rule for Wage Payments ..................................... 188

Entering Bank Fees ............................................................. 190

Reconcile Payroll: Payroll Activity Summary ............................... 191

Run the General Ledger Report .............................................. 192

Payroll Employee Summary ................................................... 197

Leave Balances Report ........................................................ 198

Unit 6 Payment of Deductions Withheld ............................... 201

Run Superannuation Accrual Report ......................................... 202

Make payments to Super Funds .............................................. 204

Superannuation Guarantee – a guide for employers ...................... 207

Notes on Payment of PAYG Withholding Taxes ............................ 208

PAYG Withholding Fields on the BAS ........................................ 208

Set the PAYG Withheld Period ................................................ 211

Set up Simpler BAS ............................................................. 211

Paying the PAYG Liability ..................................................... 214

Payment of Donations ......................................................... 215

Run General Ledger Summary ................................................ 216

Unit 7 Process and Manage Payroll ...................................... 219

Change Employee Status ...................................................... 221

Add Saturday Ordinary Hours ................................................. 226

Calculate Long Service Leave Accrued ...................................... 228


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Compassionate Leave .......................................................... 238


Request Compassionate Leave................................................ 242

Add Extra Overtime ............................................................ 244


Activity Check Award Details ................................................. 246

Calculating a Termination Payment ......................................... 250

Unscheduled Pay Run: Enter a Termination Payment ..................... 254


Set up Voluntary Withholding Agreement for Sub Contractors .......... 261

Use Spend Money to Record Withholding Payable ......................... 262

End of Month Reconciliation .................................................. 265

Account Transaction Report: Voluntary Withholding Amounts .......... 269

Run the Instalment Activity Statement ..................................... 271

Pay PAYG Liability including Voluntary Withholding Amounts ........... 273

Set up a Salaried Employee ................................................... 275

Set Salary Amount ............................................................. 279

Set up a Salary Sacrifice Payment ........................................... 280

Child Support Payments ....................................................... 282

Unit 8 Timesheets and Salaries .......................................... 287


Timesheets ...................................................................... 289

Process Pay Run – Week 10 .................................................... 293

Including Overtime in Timesheets ........................................... 294


Dealing with Leave Requests ................................................. 297


Leave for a Salaried Employee ............................................... 301

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Unit 9 End of Payroll Year Procedures ................................. 305

Payment Summaries ........................................................... 306

Run Bank Reconciliation ....................................................... 308

Run Reports ..................................................................... 309

Reconcile Payroll items with General Ledger .............................. 312

Payment Summaries for Employees ......................................... 314

Reconcile Gross Earnings and Tax Withheld ................................ 319

Finalising Payment Summaries ............................................... 320

Single Touch Payroll ........................................................... 323

Setting Up Single Touch Payroll in Xero..................................... 324

Fixing an Error in a STP Submission .......................................... 329

Finalising STP at the End of a Financial Year .............................. 331

Reconcile Gross Earnings from STP & Tax Withheld....................... 333

End of Year Procedure ......................................................... 336

Lock Dates ....................................................................... 337

Unit 10 Payroll Exercise .................................................... 327

Adjust a Leave Request and Pay Run ........................................ 350

Calculate Termination payments ............................................ 358

Appendix A: Elements of Competency and Performance Criteria ... 373

Appendix B: Solutions to Exercises ........................................ 375

Appendix C: Forms ............................................................ 399

Appendix D: Sample Collective Agreement .............................. 407

Appendix E : My Payroll ...................................................... 415

Appendix F: 2 Factor Authentication ..................................... 421

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Unit 4 - Setting up Payroll

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Unit 4

Setting up Payroll

Learning outcomes

On completion of this unit, you will be able to:

Check and create required accounts to process payroll in the Chart of Accounts.

Set the payroll calendar

Set up pay items

Set up superannuation funds

Set up employees

Make changes to employee details and payroll items

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74 © Copyright 2019 Learner Link

About Hot Bod Yoga

In the first part of this user guide, you will be processing the pays for employees of Hot Bod Yoga. This a small business owned and operated by Amelia Fox. Amelia has two employees who assist her in running the business, Esther James and Maggie Thomas. Maggie is a full time employee while Esther works casually when required.

Checking the Payroll year on your company file

Before processing any paycheques, you should check if the organisation file you are using is using the current payroll data. When using Xero, the data entered is automatically processed with tax tables relevant to the date of the transaction.

Information required for Payroll setup

Before processing any pay runs, you also need to set up and enter all the payroll information for the business:

• the accounts that will be used

• the pay calendars i.e. are employees paid weekly, fortnightly, a combination of both, perhaps monthly.

• the pay items

• the employees

• the bank account from which the wages are paid

• expense accounts for: Wages and salaries paid

Superannuation paid

Other expenses

• Liability accounts for: Wages payable

Superannuation payable

PAYG Withholdings payable

Other withholdings apayble

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Employment rules

All employees of Hot Bod Yoga are working under the Clerks – Private Sector Award 2010.

The award is included with your student files.

Please note this exercise is based on the version including amendments up to November 2018.

When you are processing payroll, you must have a copy of the relevant award or agreement on hand.

Below is an extract from the Clerks – Private Sector Award 2010. We will be using this award and looking at it while setting up the payroll for Hot Bod Yoga.

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Hot Bod Yoga General Conditions

Hot Bod Yoga is a small business owned and operated by Amelia Fox. The primary focus of H B Yoga is to run yoga and Pilates classes weekly. A small amount of merchandise is also available to purchase. H B Yoga puts on special events from time to time.

The yoga studio is generally open from 8 am in the morning until 7 pm at night, Monday to Thursday, Friday 9 am to 4 pm and Saturday 8 am until 1 pm. The studio is closed on Sundays unless a special event is happening.

Amelia is usually at the studio whenever it is open, but she is not included in the payroll exercise.

Amelia also engages sub-contractors to conduct some of the classes.

Amelia employs two people to assist her with administration and general customer service.

Maggie Thomas Maggie’s normal hours are Monday to Thursday, 8am to 5 pm and Friday 9 am to 4 pm. Each day she has an hour break for lunch

Esther James Esther usually works her hours in the afternoon when required. Her shifts are usually from 2pm to 7pm whenever Amelia requires her to work.

As part of their duties Amelia requires Maggie and Esther to use their own cars to collect and deliver mail and stock.

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The Clerks Private Sector Award 2010

A copy of this award is included with your student files. We will consider it in detail as we work the book. You may find it helpful to read through some of it, taking particular note of the following items.

Amelia’s employees can earn various allowances and conditions in relation to the following:

• Vehicle allowance

• First aid allowance

• Meal allowance

• Overtime at 1.5x or 2x the ordinary rate

• Time and a quarter, 1.25x for ordinary hours worked on a Saturday

• Double time, 2x for ordinary hours worked on a Sunday

• Annual leave loading

• Personal leave

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Set Up Payroll Accounts in Xero

1. Click on Organisation Name Settings Payroll Settings

2. Click on Add Payroll Accounts (or Edit Payroll Accounts)

Payroll Settings

Settings

Organisation Name

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As a minimum you will need separate accounts to record:

• the bank account from which the wages are paid

• the expense accounts for: Wages and salaries paid

Superannuation paid

• the liability accounts for: Wages payable

Superannuation payable

PAYG Withholdings payable

The first step is to enter the main accounts you are going to use. You will also add others as we work through the setup. In this step we will add the Wages Payable account.

1. Ensure the selected accounts are as shown in the screenshot below.

2. Click on the drop list button and click on the account to be used 824 Wages Payable - Payroll

3. Click on Save

NOTE: Xero automatically uses the current tax tables for the year you are working in.

477: Wages and Salaries 100: NAB Business 825: PAYG Withholdings Payable

478: Superannuation 826: Superannuation Payable

477: Wages and Salaries

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Set Pay Calendar

Employees will be paid weekly by direct deposit. Make the settings as shown here for Weekly pay, Start date is July 2 2018, First Payment Date is July 9 2018

1. Click on the Calendars tab in the Payroll Settings window

2. Click on Add

3. Click on the drop list button for Pay Period and click on Weekly

4. Leave the name as simply Weekly (you could modify if you had various weekly type payments)

5. Click on the Calendar icon for the Start Date

6. Use the Back and Forward button as required and click on the starting date 2 July 2018

Calendars

Add

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7. Click on the Calendar icon for the First Payment Date

8. Use the Back and Forward button as required and click on the first payment date 9 July 2018

9. Click on Add

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Apply a Holiday Group

1. Click on the Holidays tab

2. Click on New South Wales

The standard public holidays are listed. This helps you in assigning days to annual leave accurately. For example, if an employee works 5 days a week, Monday to Friday and takes a week’s Annual leave but a public holiday falls on one of those, Anzac day on a Thursday for example, then the employee actually only uses 4 days Annual leave.

Also in practice in your local area you may have other Public holidays such as Race Days or local Community days.

For your information only: You may also want to delete a holiday listed in the set below – e.g. Bank Holiday on Monday 5 Aug 2019 (just click on Cross beside it to delete then click on Delete again to confirm) if it does not apply to your employees.

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Set Up Pay Items

There are many Pay Items already set up. You can modify these and add your own. Pay items include earnings, allowances, deductions and leave.

1. Click on the Pay Items tab in the Payroll Settings window

This tab is divided in four types of Pay Items: Earnings, Deductions, Reimbursements and Leave.

2. Check that Earnings is displayed – many default Earnings will be displayed

3. Click on Ordinary Hours to view the settings for the standard pay for a full time or part time worker.

This step is important for reporting on the BAS, IAS and STP.

4. Click on the box Reportable at W1 on …

5. Click on Save

Earnings

Ordinary Hours

Reportable as W1

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In this section you will add a new Earnings Item – Overtime Hours 1.5. Overtime earnings are not included in Superannuation calculations or annual leave accrual. You will see that as each item is set up you can make settings here about Superannuation, leave accrual and PAYG calculations.

6. Check you are on the Pay Items tab of the Payroll tab

7. Click on the button Add Overtime Earnings

8. In Earnings Name type Overtime 1.5

9. In Display Name type Overtime 1.5

10. Click on Rate Type and click on Multiple of employee’s …

11. Click on Multiple and type 1.5

12. Click on Expense Account and click on 477: Wages and Salaries

13. Click on the two check boxes Exempt from Super and Reportable as W1 on Activity Statement

14. Check the details for this new item and then click on Add

Add

Overtime Earnings

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15. Click on the button Add Overtime Earnings

16. Add the settings below for the Earnings of Overtime 2.0

17. Click on Add when finished

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Set up Time and a quarter Ordinary Times Earnings

According to the Clerk Modern Award 2010 any employee who works during hours considered normal working hours on a Saturday that is not overtime but part of their 38 working week will be paid at one and quarter their normal hourly rate (or 25% loading).

This is different to overtime in that it is a higher payment for working on a Saturday. The employee is receiving a Penalty payment. The rate will be slightly higher. The other important factor here is that the hours worked are Ordinary Times Earnings so are still included in Superannuation, Annual and Personal Leave accrual calculations i.e. they are NOT Exempt.

1. Check you are on the Pay Items tab of the Payroll tab with Earnings selected

2. Click on Add Ordinary Time Earnings

Add

Ordinary Time Earnings

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3. Make the following settings then click on Add

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Action Panel

Add Expense Accounts to Chart of Accounts

Before we go any further, we will add the expense accounts that will highlight the amounts spent on allowances for each of Car allowance, Meal allowance and First Aid allowance. Using separate accounts provides more detailed information when reporting.

1. Click on tab Accounting Chart of accounts

2. Scroll down the list to the Wages and Salaries account and check for any expense accounts already available

3. Click on Add Account

4. Click on Account Type and click on Expense

5. Click into the Code box and type 479

6. Click into Name and type Car allowances

7. Click into Description and type Employee car allowances as part of salaries and wages

8. Click on the Tax drop list button and click on BAS Excluded

9. Click on Save

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10. Repeat steps 3 to 9 on the previous page to add these two accounts for Meal Allowance and First Aid Allowance

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Add an Earnings Allowance Pay Item: Car Allowance

Allowances are things like a Meal Allowance, Car Allowance, First Aid Allowance, Shift Allowance.

1. Click on the Organisation Name Settings Payroll settings

2. Click on the Pay Items tab if it is not selected

3. Click on Add Allowance

4. Click on the Type drop list button and click on Car – Cents per … (This is to do with Single Touch Payroll and reporting – it will be explained in more detail later)

5. Click into Earnings Name and type Car Allowance

6. Click into Display Name and type Car Allowance

The Commissioner of Taxation determines the rate for cents per kilometre. In the 2018-19 financial year the rate is 68c irrespective of the engine size of the car. Payments are exempt from PAYG. Employers can pay more than this rate but must withhold tax from any amount above 68c (unless the higher rate is part of an award) or employees may have a tax liability when they lodge their tax return. Claims are capped at 5000km per year.

Add

Allowance

Pay Items

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The amount of the allowance must be shown separately in the accounting records. The amount is therefore NOT simply allocated to the Wages and Salaries account; it will be allocated to the Car allowances expense account that you created in the previous section.

The amount set in the Clerks – Private Sector Award 2010 is 78c per km.

7. Click on the Rate Type drop list button and click on Rate per Unit

8. Click into Type of Units and type Kms

9. Click into Rate per Unit and type 0.78 to change the rate to 78c per km as set by the award.

10. Click on Expense Account, scroll down and click on 479: Car allowances

For the purposes of this exercise we will treat this rate as the rate set by the ATO. The payment is exempt from PAYG and Super.

In practice you would have to tax the 10 cents ie 78c is 10c in excess of 68c.

11. Click on the Exempt from PAYG Withholding so a tick appears

12. Click on Exempt from Superannuation … so a tick appears

Car allowance payments are NOT reportable on W1 of the Activity Statement so leave this box blank.

13. Click on Add

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Add an Earnings Allowance Pay Item: Meal Allowance

According to the Clerks award an employee is entitled to either a meal or a meal allowance if they have to work 2 hours or more overtime without appropriate notice. The meal allowance is $15.45. Because it is a Meal Allowance that is part of an award it is not included in wages for PAYG purposes, tax is not withheld, and it is not included in Superannuation calculations. (See ATO for clarification)


2. Click on Add Allowance

3. Click on Type and click on Meals … (required for STP)

4. Type Meal Allowance in the Earnings Name and Display Name

5. Click on the Rate Type drop list button and click on Rate per Unit

6. Type Meals in Type of Units

7. Click into Rate per Unit and type 15.45 to set the rate

8. Click on Expense Account, scroll down and click on 480: Meal Allowance

As this is an award payment the whole amount is exempt from PAYG and Super and NOT reportable at W1.

9. Click on the Exempt from PAYG Withholding so a tick appears

10. Click on Exempt from Superannuation … so a tick appears

11. Click on Add

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Add a Taxable Earnings Allowance Pay Item: First Aid Allowance

You have already looked at a Car allowance and a Meal Allowance. These allowances are not taxable as they are expected to be expended in the course of work. These type of allowances are reported separately on a Payment Summary or when using Single Touch Payroll.

An allowance such as a First Aid Allowance is taxable as it is considered part of Ordinary Times Earnings, like a Shift Allowance. Following on from this it is also part of Superannuation calculations, so it is not exempt.

It is however exempt for Annual Leave and Personal Leave Accrual.

The Award will indicate the amount payable to an employee who is to receive the allowance. In the Clerks 2010 Modern Award July 2018 the First Aid Allowance is listed in Clause 19 Allowances.

The Standard Rate stated above is listed in the Definitions of the Award on pages 4-5.

So, let’s look at Clause 16 for Level 2, Year 1 – the minimum weekly wages are:

Therefore, to calculate the amount payable weekly for the First Aid Allowance:

1.5% x 837.40 =$12.56

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Note: We are using the Clerk 2010 Modern Award July 2018 version included with your student files because we are working in the 2019 financial year. In practice you should use the Award appropriate to your financial year.

Any allowance that is taxable and is just to be included as Gross Earnings at W1 – i.e. does not need to be listed separately, should be set up as Ordinary Time Earnings item. This will ensure that it is included properly as Gross Earnings when creating a Payment Summary or reporting using Single Touch Reporting.


2. Click on Add Ordinary Times Earnings

3. Type First Aid Allowance in the Earnings Name and Display Name

4. Click on the Rate Type drop list button and click on Rate per unit

5. Click in Type of Unit and type Weeks

6. Type 12.56

7. Click on Expense Account, scroll down and click on 481: First Aid Allowance

8. Make sure both Exempt… boxes are clear

9. Click on the box to put a tick in Reportable as W1 on Activity Statement

10. Click on Add

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Determining what to set in an Allowance

So, we have just looked at three allowances: Car allowance, Meal Allowance and First Aid allowance. Two of which are exempt from PAYG and Superannuation calculations, and one that is not even though they are all part of an award. We cannot possibly go through all the allowances in every award in this guide, but we can show you where to look for clarification of the settings to make.

How you set up your allowance on Xero depends on how it is to be reported on a Payment Summary according to the ATO.

Most allowances fall in one of two categories:

Ordinary Time Earning type = Included in Gross Payment at W1

Allowance type = Shown separately in Allowance box on Payment Summary

The full list of allowances can be found on the ATO web site at: www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/Payments-to-employees/Allowances-and-reimbursements/Withholding-for-allowances/

There are two allowances that do not need to be included on a payment summary at all. Consult your Accountant if your business pays either of these.

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https://www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/Payments-to-employees/Allowances-and-reimbursements/Withholding-for-allowances/





In practice there are essentially four different setups for an allowance as summarised in this table:

Setup Allowance type Report at W1

Are you required to withhold?

Include on payment

summary?

Part of OTE? Does SG apply?

1

Part of OTE – set up as Ordinary Times Earning

Yes Yes Yes included in Gross

Yes OTE SG applies

2 Set up as Allowance No Yes Yes as Allowance

No: Exempt from SGC

3 Set up as Allowance No No Yes as Allowance

No: Exempt from SGC

4 Set up as Allowance? No No No Not required

No: Exempt from SGC

Setup 1: Use the First Aid Allowance as an example of an allowance that is OTE and to be included in Gross Payments – this is set up on page 94.

Setup 2: For allowances such as Tools or compulsory uniform or dry cleaning– use the Meal Allowance example but clear the box so it is not exempt from PAYG. Use the Allowance Type indicated in the ATO tables

Setup 3: Use the Meal Allowance as an example of an allowance to be shown separately in an allowance box but where it is not taxable and not included in Super.

Setup 4: These type of payments are not part of payroll

NOTE: A colour coded document Setup for Withholding for allowances is provided in your student files that reformats the tables provide on the ATO website so the various setups above can be applied.

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You should now have the following items set up on the Earnings tab of Pay Items. You may think this is a lot of work, but it makes it much quicker and easier to process employee pays each week when the pay items that the employee is generally entitled to are included from here in the template.

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Pay Items: Deductions

Deductions cater for amounts that can be deducted from an employee’s pay on a regular basis such as Union fees, Social Club contributions, donations to registered charities, child support etc. The nature of the deduction will determine if it is included for PAYG and Super calculations or not.

Charitable Donation Deductions

When an employer deducts an amount for donation from an employee’s pay – the employee is relying on the employer to make that payment to the charity. So, for example most of the employees of Hot Bod Yoga donate to the Cancer Council. Each pay period an amount is deducted from their wage. This amount is recorded into a liability account e.g. Cancer Council Donations Payable. The employer must then on a regular basis make a payment to the Cancer Council on behalf of the employees who have donated funds.

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Create Liability Accounts for Deductions Payable

Hot Bod Yoga will have two deductions in addition to PAYG: the first for The Cancer Council and the second for Social Club contributions. Prior to creating the Pay Items, we will create the liability account for each deduction.

1. Click on Accounting Chart of accounts

2. Scroll down the list to the Wages and Salaries account and check for any liability accounts already available.

You should see that you have an account 825 PAYG Withholdings Payable and 826 Superannuation Payable.

3. Scroll back up and click on Add Account

4. Click on Account Type and click on Current Liability

5. Click into the Code box and type 827

6. Click into Name and type Cancer Council Payable

7. Click into Description and type Employee donations from wages payments

8. Check that BAS Excluded appears in the Tax setting.

9. Click on Save

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Unit 5 - Processing Payroll


Unit 5

Processing Payroll

Learning outcomes

On completion of this unit, you will be able to:

• check payroll data and timesheets

• process pays for full time employees

• process pays for casual employees

• enter personal and annual leave

• correct an error in a pay run

• enter wage payments using Spend Money

• enter wage payments during a bank reconciliation

• run and print payroll reports

• reconcile payroll with accounting reports

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Payroll Procedures Hot Bod Yoga

Preparing payroll within designated timelines

Pay details (timesheets) must be submitted to the supervisor/relevant payroll person to allow time for checking prior to processing payroll.

Employees have a set payday; therefore, the person responsible for payroll must always set aside a time, e.g. Monday morning to process pays.

Payroll security

Wages and salaries are a major expense for businesses, and steps must be taken to ensure that theft or fraud does not occur. Security measures in this business include:

• Completion of timesheets is supervised to ensure each employee completes their own and no one else’s.

• All payroll documents are kept under lock and key and only the person responsible for payroll and management have access to records.

• If possible, the person who prepares the payroll should not be the person who collects or distributes cash wages to employees.

The cash wages, cheques, ListPay or electronic funds procedure may require authorisation by the supervisor.

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Payroll files

All payroll documentation should be kept in a locked filing draw so that personal information is not available to other employees.

The following files should be kept:

A file for each employee in which to store Tax File Number Declaration, superannuation forms and personal information

A file for payroll reports for each pay run

A file for each superannuation fund and payment documentation

A file for each deduction payable, e.g. Cancer Council donation

A file for Awards, Agreements, pay rates, etc.

A file for WorkCover documentation.

Payroll confidentiality

Employees could work under different awards and conditions. Disclosure of pay details is prohibited. Disclosures can cause disharmony among employees, especially if some feel that they are receiving a lower wage than others who they consider to be working at a decreased capacity.

The bookkeeper must be aware of the contents of the Privacy Act 1988 in relation to the storage and security of personal information.

@ Go to www.oaic.gov.au and find the page about the Privacy Act 1988. Save this page in your web browser Favourites for future reference.

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http://www.oaic.gov.au/



The Notifiable Data Breaches Scheme

From 22 February 2018, the Privacy Amendment (Notifiable Data Breaches) Act 2017 established the Notifiable Data Breaches (NDB) scheme. The NDB scheme applies to all agencies and organisations with existing personal information security obligations under the Australian Privacy Act 1988.

The NDB scheme introduces an obligation to notify individuals whose personal information is involved in a data breach that is likely to result in serious harm. This notification must include recommendations about the steps individuals should take in response to the breach. The Australian Information Commissioner must also be notified of eligible data breaches. The OAIC has provided comprehensive information about the NDB scheme at www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme.

Exercise: Recap

In the following exercise you will pay the employees weekly. Hot Bod Yoga employs the following personnel:

Maggie Thomas Customer service Full-time employee 38-hour week

Esther James Customer service Casual – 10 to 20 hours per week

Amelia is the owner of the business and is usually at the studio whenever it is open but she is not included in the payroll exercise.

The yoga studio is generally open from 8 am in the morning until 7 pm at night, Monday to Thursday, Friday 9 am to 4 pm, Saturday 8 am until 1 pm. The studio is closed on Sundays unless a special event is happening.

Maggie’s normal hours are Monday to Thursday, 8 to 5 with an hour break for lunch, Friday 9 to 4 pm.

Esther usually works her hours in the afternoon when required. Her shifts are usually from 2pm to 7pm whenever Amelia requires her to work.

Maggie and Esther both fill out time sheets as shown on the following two pages.

Any instructors working in the studio besides Amelia are paid as contractors with a Withholding agreement.

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https://www.legislation.gov.au/Details/C2017A00012

http://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme

http://www.oaic.gov.au/privacy-law/privacy-act/notifiable-data-breaches-scheme



Process Pay Run – Week 1 – ending 8 July 2018

Maggie has submitted the following timesheet. She has worked her normal hours. She has also used her car to do work for the studio and has entered the Kms on each day.

Maggie is also entitled to a First Aid Allowance.

Timesheet Employee: Maggie Thomas

Week ending date: 8/7/2018

Day Start time

Finish time

Meal break Total Ord

time 1.5 2 Other Meal Kms

Monday 8 am 5 pm 1 hr 8 8 Tuesday 8 am 5 pm 1 hr 8 8 12 Wednesday 8 am 5 pm 1 hr 8 8 Thursday 8 am 5 pm 1 hr 8 8 8 Friday 9 am 4 pm 1 hr 6 6 Saturday Sunday

Total Hours (to nearest 15 minutes) 38 20

Notes First Aid Allowance

Employee Certification: I certify that the above hours are correct, no injuries have been sustained, my job description has not changed. I also understand wages will not be paid unless this timesheet has been authorised by a supervisor and received by the Payroll manager on time.

Employee Signature:

Supervisor Certification: I verify that the hours on this timesheet are correct.

Please ask your supervisor to approve the payment of this timesheet

Supervisor Signature:

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Esther has submitted the following timesheet. She has various hours as required by Amelia. Esther sometimes uses her car to do work for the studio but did not perform any of these duties this week. Because she has worked 5 or less hours in each shift she did not take a meal break.

Timesheet Employee: Esther James

Week ending date: 8/7/2018

Day Start time

Finish time



Monday 2 pm 6 pm 4 4 Tuesday Wednesday 2 pm 7 pm 5 5 Thursday 3 pm 6 pm 3 3 Friday 1 pm 4 pm 3 3 Saturday Sunday

Total Hours (to nearest 15 minutes) 15

Notes


Employee Signature:




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You have done most of the hard work in setting up the Pay Templates.

1. Click on the tab Payroll Pay employees

You may see a notice regarding Single Touch Payroll. We will come back to that later.

2. Click on Remind me later

3. Click on the + Add Pay Run button

4. The next scheduled pay run date will appear – which in our case is 8 July 2018 – click on Next

+ Add Pay Run

Payroll

Pay employees

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Our two employees appear. You will notice that the full wage is already calculated for Maggie. Esther’s earnings are currently 0.00 because we did not enter any standard hours in her pay template because she is casual her hours change from week to week. The -7.00 net pay is because of the deductions for the Cancer Council and the Social Club.

Let’s check Maggie Thomas first.

5. Click anywhere on her row in the employee list to open her pay template with details filled in for this week.

The normal wage applies for Maggie this week except for adding 20 kms travelled for work to pick up some stock.

6. Check that the figures match those in the screenshot on the following page and then click Save.

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Check that Annual Leave and Personal Leave are

accruing correctly.

Enter 20 Kms here

Check 38 hours here

Check First Aid is 1

Check 10 entered for Cancer Council

Check 5 entered for Social Club

Check Super is entered and calculated

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You may have noticed at the top of the screen in the Weeks payroll summary that the total payment is currently $7 less than Maggie’s payment. This is because Esther is currently -$7. Let’s enter her wage so it makes more sense.

Esther worked 15 hours this week.

7. Click on the Employee drop list button above Maggie’s name

8. Click on Esther

9. Click into the Hours box for Ordinary hours and type 15 then press the TAB key to set

Enter 15 hours here

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Check that there is no Annual Leave and Personal Leave.

Check 2 entered for Cancer Council

Check 5 entered for Social Club

Check Super is entered – it is not calculating anything at the moment as the threshold of

$450 earnings per month has not yet been reached.

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Checking the accuracy of Esther’s pay before recording

Let’s check these figures manually to ensure that the payroll for Esther has been set up correctly.

Complete the pay slip below manually and check your figures against the amounts on your screen.

Pay Esther James Week ending 8 Jul 2018

Gross Wages

Base Hourly - 15 hours x $29.10 per hour

Less Deductions

PAYG Withholding

(No Tax-free threshold column – column 3)

-$108.00

Cancer Council Donation

Social Club

Net Wages

3. Click on Save to accept the payroll details.

Solution can be found in Appendix B

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4. Click on the link to the pay run Week ending 08… to return to the summary

5. Notice the Status at the moment is Draft

6. Click on Post Pay Run – this makes the required entries into the journals

7. Click on Yes to the Prompt – the Status will change to Posted

We will look at reports on the next page.

Link to the Summary

Post Pay Run

Status

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Payroll reports

How do you find the Pay Run to do specific reports for that pay run.

1. Click on Payroll Overview

2. Click on Pay Runs to display a list of Pay Runs – we only have one at the moment

3. Click on the Pay run you want to run reports for

4. Click on the View Reports button at the base of the summary

5. Click on Pay Run Journal

Pay Runs

Pay Run Journal

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A new tab will open in your browser with the report.

6. Click on the previous browser tab to return to the Xero window and the Pay Run

7. Click on the View Reports button again and click on Payslips

A new tab will open with a page for each employee displaying their full payslip.

Look through the payslip and check for any errors. For example – incorrect hours, incorrect or missing deductions, accruing leave for a casual employee, if superannuation is missing check why.

8. Click on the previous tab to return to the Xero window and the Pay Run

9. Click on View Reports Payroll Employee Summary

Xero tab Report tab

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10. Click on the Xero tab to return to the Xero window and the Pay Run

11. Click on View Reports Payroll Activity Details

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Leave Balances Report

Other payroll and accounting reports are located in the Reports area of Xero.

1. Click on the tab Accounting Reports

2. Scroll down to Payroll

3. Click on Leave Balances

4. Click on Update – Only Maggie has leave accrued because Esther is a casual employee.

Reports

Leave Balances

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Balance Sheet Report

1. Click on tab Accounting Reports

2. Click on Balance Sheet in the Financial section

3. Click on the Date drop list button and use the backward or forward button to find 31 July 2018 and click on it – or just type in 31/7/18 and press the TAB key

4. Click on Update

5. View the figures under the ‘Liabilities’ heading to check the totals for the highlighted accounts

Update Date

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Profit and Loss Report

1. Click on tab Accounting Reports

2. Click on Profit and Loss in the Financial section

3. Set the date range from 1 Jul 2018 to 31 Jul 2018

4. Click on Update

5. View the figures under the ‘Operating Expenses’ heading to check the totals for the highlighted accounts

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Actually Pay Employees

So, you have posted the pay run, checked all entries and if required received authorisation. Now you are ready to actually pay the employees. You can do this using a batch payment via your bank or you can pay each employee separately using cash, cheque or individual online payments by direct deposit.

You can email payslips directly to the employee if an email address is entered in their Employee details.

1. Click on Payroll Employees

2. Click on Maggie Thomas

3. Click on the tab Details if it is not selected

4. Scroll down and click into the Email box and type your own email address – you will be able to see what is received – in practice you would put the employees email address here.

5. Click on Save

Email

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Email Payslips

Email Payslips

When you are ready to email the payslips

1. Click on Payroll Pay Employees

2. Click on the Pay run to be paid

3. Click on Pay Run Options Email Payslips

4. Notice that only Maggie is listed as she is the only employee that

has provided an email address.

5. Click on Email Payslips

Email Payslips

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6. Now check your email inbox and you should have received an email from Xero with a PDF of Maggie’s payslip attached

Print Payslips

Any employee who does not have an email address can have their payslip printed instead.

1. Click on Payroll Pay Employees

2. Click on the Pay run you need the payslip for

3. Click on View Reports Payslips

Find the payslip for Esther

4. Click on the Print button at the top right of the screen – you should move the pointer up there for the icon to appear

Print

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5. Click into Pages and just enter the specific pages you want to print – in this case page 1

6. Click on Print

Print

Pages

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Create an ABA file

In practice, to create the ABA file to send to the bank.

1. Click on Pay Run Options

2. Click on Download ABA

This will download the ABA file onto your computer. As this is simulated exercise, we cannot physically send the file to be bank.

The ABA file contains the following:

The essential details are:

which employee bank accounts to pay into – BSB details and Account numbers and Name along with the dollar value.

which account to make each of the payments from

DO NOT CREATE THIS TRANSACTION HERE: This is an example only. If you created an ABA file and uploaded it to the bank you would create the following spend money transaction.

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Entering Employee Wage as a Spend Money transaction

To record the wages as paid in Xero we will record each payment as a Spend Money transaction – making sure to use the Account 824- Wages Payable Payroll. We are recording the payment of the wages in Xero, so the wages payable account is reduced as the liability has been paid and the balance of the bank account is also reduced.

It is important to enter the Spend Money transactions using the bank account out of which the wages are actually paid.

1. Click the tab Dashboard

2. Click on the NAB Business Bank Account

3. Click on the + New Transaction button

4. Click into the To box and type Maggie Thomas

5. TAB to the Date box and type 9/7/2018 and TAB

6. Click into the Description box and type Wages for week ending 8 July 2018

7. TAB to Qty and type 1

8. TAB to Unit Price and type 779.88 – the net wage amount

9. TAB to Account and type 824 – the account Wages Payable Payroll should appear – click on it and TAB

10. Check that BAS Excluded appears in the Tax Rate column

11. Click on Save & add another

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1. Click into the To box and type Esther James

2. TAB to the Date box and type 9/7/2018 and TAB

3. Click into the Description box and type Wages week ending 8 July 2018

4. TAB to Qty and type 1

5. TAB to Unit Price and type 321.50 – the net wage amount

6. TAB to Account and type 824 – the account Wages Payable Payroll should appear – click on it and TAB

7. Check that BAS Excluded appears in the Tax Rate column

8. Click on Save

9. Click on the Cancel to close the Spend Money window

Then when you come to reconcile with your actual bank statement the payments will be there ready to match with the physical payments made by the bank. We will work through this at the end of the chapter.

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Process Pay Run - Week 2 – ending 15 Jul 2018

1. Click on the tab Payroll Pay employees

You may see a notice regarding Single Touch Payroll. We will come back to that later.

2. Click on Remind me later

3. Click on the + Add Pay Run button

4. The next scheduled pay run date will appear – which in our case is 15 July 2018 – click on Next

+ Add Pay Run

Payroll

Pay employees

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Let’s process the pay for Esther James first.

5. Click anywhere on her row in the employee list to open her pay template with details filled in for this week.

This week Esther has worked 18 hours, 17 hours at her normal rate and one hour overtime which was unplanned as she had to work later than scheduled on Wednesday evening when an unscheduled staff meeting ran overtime. She also used her car for 42 kilometres.


Week ending date:

Day Start time

Finish time



Monday 2 pm 6 pm 4 4 10 Tuesday 9 am 2 pm 5 5 10 Wednesday 2 pm 7 pm 5 4 1 12 Thursday 2 pm 6 pm 4 4 10 Friday Saturday Sunday

Total Hours (to nearest 15 minutes) 17 1 42

Notes: Originally rostered to work 2 - 6 pm on Wednesday


Employee Signature:




Esther’s normal casual rate applies for 17 hours and she is also paid 1 hour of time and a half for the overtime. You also need to enter 42 kms travelled for work to pick up stock.

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6. Check that the figures match those in the screenshot below and then click Save and Next

Notice that Esther has been paid Super in this pay run as her wages have gone over the $450 minimum for the month

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Maggie worked her normal 38 hours plus two hours overtime on Wednesday evening to attend the unscheduled staff meeting. For two hours overtime she is entitled to a meal allowance. She also used her car for 15 kms.


Week ending date:

Day Start time

Finish time



Monday 8 am 5 pm 1 hr 8 8 Tuesday 8 am 5 pm 1 hr 8 8 Wednesday 8 am 5 pm 1 hr 8 8 5 pm 7 pm 2 2 1 Thursday 8 am 5 pm 1 hr 8 8 Friday 9 am 4 pm 1 hr 6 6 15 Saturday Sunday

Total Hours (to nearest 15 minutes) 38 2 15

Notes: Entitled to First Aid Allowance


Employee Signature:




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Unit 7 - Process and Manage Payroll


Unit 7

Process and Manage Payroll

In this unit we continue to process the Payroll for Hot Bod Yoga, but modifications need to be made for changes in the working structure.

Outcomes

In this unit you will:

Change an Employees status from Casual to Part time

Change an Employees ordinary hours to include time and a quarter

Calculate Long Service Leave Accrued

Setup Long Service Leave Accrual for an employee

Process a Pay that includes Compassionate Leave

Calculate a Termination payment

Set up Sub Contractors with voluntary withholding amounts

Set up an Employee as salaried

Set up an Employee for Salary Sacrifice

Add a Deduction for Child Support Payable

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Amelia’s business is expanding, and she wants both her employees to

work more or varied hours to what they have been. They agreed a month

ago that changes would be happening.

Esther has been working for Amelia for a couple of years as a casual and

her hours have become quite regular, so she has requested to have her

status changed to Permanent Part-time.

Amelia would like Maggie to start and finish later on Wednesdays and to

work on Saturday mornings. Maggie has also reminded Amelia that she

should be accumulating Long service leave as she has worked for her for

over seven years now.

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Change an Employees Details: Change Status

Now you might think this will be a simple thing but there are quite a few settings to change.

1. Click on the tab Payroll Employees

2. Click on Esther James in the list

3. Click on the Taxes tab in the Employment Details window

4. Click on Employment Basis and click on Part-time employment

5. Click on Tax Free Threshold Claimed (Esther has quit her other job)

6. Click on Eligible to Receive Leave Loading. Remember we are not

applying SGC on leave loading in this case study

7. Click on Save Only

8. Click on the Details tab and enter your email address in case you wish to email copies of any payslips.

9. Click on Save

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As a Part time worker Esther is now entitled to accrue and be awarded

Personal and Annual Leave.

10. Click on the tab Leave

11. Click on the button Assign Default Leave Types

The Leave Balances for Annual Leave and Personal/Carer’s Leave appear. Esther does not have any accrued entitlements because she has been working as a casual, so we leave these at 0.

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The next step is to modify the Pay Template for Esther.

12. Click on the Pay Template tab

13. Click into the rate for Ordinary hours and change this to 23.28

14. Click on the X to delete the Overtime Casual 1.5 rate

15. Click on the + Add Earnings Line button

16. Click on the drop list button for Earnings Rate and click on

Overtime 1.5

17. Click on OK

18. Click into Amount for Cancer Council Deduction and type 5.00

19. Check your template is the same as this one then click on Save

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One last thing. Now that Esther will be earning a bit more money, she would like to have some of her wage paid directly to a home loan saving account.

20. Click on the Bank Accounts tab

21. Click on the link Add Another Bank Account

22. Enter the following details: Statement Text: H B Yoga Wages

Account Name: E and A James

BSB Number: 012-623

Account Number: 0054258

Dollar Amount: 200.00

23. Click on Save

24. Double check the settings you have made for Esther:

Leave Accruals have been set up

Leave Loading has been set

Tax Free Threshold claimed

Employment Basis changed to Part time

Pay Template modified

Added an additional bank account

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You may get an email like this one to notify you that there has been a change in payroll details. It is just a check to make sure someone isn’t subtly making unauthorised changes to theirs or another person’s wages.

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Adjust Maggie Thomas Details

Maggie is now to work on Saturday mornings. We covered an employee working ordinary hours on a Saturday on page 86. Go back and read the information again if you need a reminder.

1. Click on tab Payroll Employees

2. Click on the employee Maggie Thomas

3. Click on the Pay Template tab

4. Click on the + Add Earnings Line

5. Click on the drop list button, scroll down and click on Ordinary time and a quarter

6. Click on OK

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The new Earnings Rate will appear on the Pay Template. Maggie will ordinarily be working on Saturday for 5 hours. So that means she will do 5 hours at Ordinary Time and a quarter and 33 Ordinary Hours giving her a total of 38 ordinary hours.

7. Click into Ordinary hours and change to 33

8. Click into Ordinary time and a quarter and change to 5

9. Click on Save

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Calculate Long Service Leave Accrued

Maggie started working at Hot Bod Yoga 7 years and six months ago on 2nd February 2011.

NOTE: Each state has its own rules on how to calculate Long Service Leave – you should check the rules in your own state. Fairwork lists the relevant agency for each state.

www.fairwork.gov.au/leave/long-service-leave

In NSW an employee is entitled to 2 months Long Service Term per 10 years of service where 1 month is deemed to be 4 and 1/3 weeks so that means 8 and 2/3 weeks per ten years or 0.867 weeks per year.

Maggie Thomas is entitled to 0.867 weeks long service leave accrual for each year worked. She has been employed for 7 years and 6 months as of 30 July 2018.

Calculation - hours per week to be accrued:

0.867 weeks per year = 38 × 0.867 = 32.9 hours per year

Per pay period: 52

32.9 weeks = 0.63269 per week

Or as a percentage (used for permanent part-time or perhaps long-term casual – refer to Long Service Leave rules for your State/Territory).

Calculation: 38529.32

× × 100 = 1.665% of Gross Ordinary Hours

Note this is just an example – you will need to seek assistance in the workplace. Calculation – how many hours has Maggie accrued so far:

Maggie has been working for 7 years and six months. To determine how much has accrued:

Years: 7 x 32.9 hours per year = 230.3

Months: 6 months = 32.9 x 126

= 16.45

So, we have 230.3 + 16.45 = 246.75 hours

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https://www.fairwork.gov.au/leave/long-service-leave



Check Long Service Leave Paid Item

Before we apply the Pay Item to Maggie, we need to check how it is set up.

1. Click on the tab Hot Bod Yoga Settings

2. Click on Payroll Settings

3. Click on the Pay Items and the Leave tab

4. Click on Long Service Leave

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5. Click into the Normal Entitlement box and type 32.9 that we

calculated on the previous page

6. Click on Show Balance on Payslip

7. Click on Save

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Assign Leave Type

Leave

8. Click on tab Payroll Employees

9. Click on Maggie Thomas

10. Click on the Leave tab

11. Click on Assign Leave Type

12. In Leave select Long

Service Leave

13. In Leave Calculation

Method enter Based on

Ordinary Earnings

14. In Hours Accrued Annually

enter 32.9 – we calculated

that a couple of pages ago

15. Enter 38 in the Hours in a

weekly pay period

16. In Opening Balance enter

246.75

17. Click in the On

termination unused

balance is: box and click

on Paid Out

18. Click on Save

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Process Pay Run – Week 5 – ending 5 Aug 2018

Maggie’s hours have changed so she now works on a Saturday morning. Because the work is only 5 hours long, she does not take a meal break (although she would be able to take a paid 10 minute rest break). She also works longer on Wednesday but now has all of Friday off.


Week ending date: 5 Aug 2018

Day Start time

Finish time



Monday 8 am 5 pm 1 hr 8 8 10 Tuesday 8 am 5 pm 1 hr 8 8 12 Wednesday 9 am 7 pm 1 hr 9 9 Thursday 8 am 5 pm 1 hr 8 8 15 Friday

Saturday 8 am 1 pm 5 5 @ 1.25

Sunday


Notes First Aid Allowance


Employee Signature:




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Esther’s hours have also changed to be permanent part time. Her new standard roster is shown below.


Week ending date: 5 Aug 2018

Day Start time

Finish time



Monday 2 pm 7 pm 5 5 Tuesday 2 pm 7 pm 5 5 Wednesday 8 am 5 pm 1 hour 8 8 12 Thursday 2 pm 7 pm 5 5 Friday 8 am 4 pm 1 hour 7 7 12 Saturday Sunday


Notes


Employee Signature:



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Appendix A - FNSTPB402 Elements of Competency and Performance Criteria


Appendix A

FNSTPB402 Elements of Competency and

Performance Criteria

Element Performance Criteria Reference

1 Establish payroll requirements

1.1 Assess scope of payroll services that a business activity statement (BAS) agent can provide, and identify need for independent expert advice

Unit 2

1.2 Apply knowledge of legislation in relation to National Employment Standards, and legislative requirements in regard to payroll payments

Unit 2

1.3 Research and identify relevant to relevant state and modern awards, and employee agreements, regarding details to be set up in payroll system for individual employees

Unit 2

2 Record payroll data

2.1 Configure payroll system with complete data provided by employee and employer

Units 3, 4, 7 & 10

2.2 Review payroll data and clarify discrepancies with designated persons

Units 4, 7 & 10

2.3 Enter employee pay period details in payroll system in line with source data

Units 4, 7, 8 & 10

3 Prepare and process payroll

3.1 Conduct payroll preparation within designated timeframes and according to organisational policies and procedures

Units 4, 7, 8 & 10

3.2 Use employee source data to calculate, record and reconcile payroll according to legislative requirements

Units 2, 4, 7-10

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Appendix A - FNSTPB402 Elements of Competency and Performance Criteria


3.3 Reconcile total payments for pay period and review and correct irregularities or refer them to designated persons for resolution

Units 4, 5, 7, 8 & 10

3.4 Obtain authorisation of payroll and make arrangements for individuals’ payments in line with organisational requirements

Units 4, 7, 8 & 10

3.5 Distribute individual pay advice according to organisational and legislative requirements

Units 4, 5, 7, 8 & 10

3.6 Identify legislative and organisational requirements relevant to employment termination processes and payment, and seek advice to interpret requirements as required

Unit 2, 10

3.7 Produce, review and store payroll according to organisational policy and security procedures

Units 1, 4, 7, 8 & 10

4 Handle payroll enquiries

4.1 Respond to payroll enquiries according to organisational and legislative requirements.

Units 4, 7 & 10

4.2 Provide information provided according to organisational and legislative requirements.

Units 4, 7 & 10

4.3 Refer enquiries outside area of responsibility or knowledge to designated persons for resolution.

Units 4, 7 & 10

4.4 Provide additional information or follow-up action within designated timelines and according to organisational policy and procedures.

Units 4, 7 & 10

5 Maintain payroll

5.1 Maintain information and record keeping relating to payroll function according to current legislation and regulatory requirements.

Units 2 & 10

5.2 Prepare and reconcile month-end and year-end payroll records to ensure compliance with legislative and management deadlines.

Units 5, 6 & 10

5.3 Update records and systems in line with salary reviews and other changes in employment status.

Unit 3, 7 & 10

5.4 Establish back-up and disaster recovery systems. Units 1 & 10

5.5 Generate and distribute payroll reports in line with organisational policy.

All units

5.6 Extract and apply BAS and instalment activity statement (IAS) data according to legislation and regulatory requirements.

Units 5 & 10

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Documents

FNSTPB402 Establish and maintain a payroll system 2nd Edition … · Check and create required accounts to process payroll in the Chart of Accounts. Set the payroll calendar Set up