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FACULTY OF BUSINESS & COMPUTING Process Payroll – Learner Guide

BSBFIA302A

Table of ContentsSECTION 1 - Introduction.....................................................................................................................3

Terms of Employment........................................................................................................................3Salary or Wage?................................................................................................................................3PAYG Withholding Tax......................................................................................................................4Tax Offsets (Formerly Rebates)........................................................................................................4Voluntary Deductions.........................................................................................................................4Payment Methods..............................................................................................................................5Superannuation Guarantee – What is this?.......................................................................................5Holiday Pay....................................................................................................................................... 5Glossary of Terms............................................................................................................................. 5

SECTION 2 – Manual Payroll Activities................................................................................................8ACTIVITY 1 – Nappy Days P/L..........................................................................................................8ACTIVITY 2 - Bright Buttons............................................................................................................11ACTIVITY 3 - Dogs on the Run.......................................................................................................13ACTIVITY 4 - Westerway Ceramics................................................................................................15

SECTION 3 – MYOB Payroll...............................................................................................................17Using this Learner Guide.....................................................................................................................17How to open MYOB.............................................................................................................................18MYOB Command Centre....................................................................................................................19

Correcting errors..............................................................................................................................20Payroll Options....................................................................................................................................21Payroll Cards Set Up...........................................................................................................................22

ACTIVITY 5 – Nappy Days Pty Ltd – Week 1..................................................................................22Card Command Centre....................................................................................................................22

Setting up an employee’s record.........................................................................................................23Payroll Information.............................................................................................................................. 24Superannuation...................................................................................................................................25Entitlements........................................................................................................................................ 25Deductions.......................................................................................................................................... 26Taxes.................................................................................................................................................. 27Standard Pay...................................................................................................................................... 28Payment Details..................................................................................................................................29Processing the Weekly Payroll............................................................................................................30Select and Edit Employee’s Pay.........................................................................................................31

Editing an Employees Pay...............................................................................................................32Completing the Weeks’ Pay................................................................................................................33Payroll Weekly Report.........................................................................................................................34Editing Functions.................................................................................................................................35

Deleting a transaction......................................................................................................................35ACTIVITY 6 – Nappy Days Pty Ltd – Week 2..................................................................................36ACTIVITY 7 – Bright Buttons – Week 1...........................................................................................37ACTIVITY 8 – Bright Buttons – Week 2...........................................................................................37ACTIVITY 9 – Dogs on the Run – Week 1......................................................................................39

Entering an employee’s Payment Details............................................................................................39Processing Holiday Pay......................................................................................................................40Electronic Payments............................................................................................................................41Additional Employees – Dogs on the Run...........................................................................................44

ACTIVITY 10 – Dogs on the Run – Week 2....................................................................................45ACTIVITY 11 – Dogs on the Run – Week 3....................................................................................46ACTIVITY 12 – Colouring World - Comptency.................................................................................55

Faculty of Business and Computing Page 1 of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

On successful completion of this unit you will be able to maintain financial records of a business using both manual accounting processes and computer accounting software.

Specifically, you will be able to: Record payroll data Prepare payroll Handle payroll enquiries

This learning program comprises the following:

Manual Tasks explanations and some procedures for entering information in the payroll system practice exercises worksheets

Computerised Tasks explanations and some procedures for entering information in the MYOB payroll system MYOB practice exercises worksheets

Evidence of the following is essential to demonstrate competency in this unit: Performing payroll calculations Applying knowledge of organisational guidelines relating to security and confidentiality of

information

This evidence will be gathered from completed competency tasks included in this pack as well as demonstrated techniques observed when completing in-class tasks and case studies. Your teacher may also use direct questioning to gain additional evidence of knowledge of accounting procedures and techniques.

Please ensure that you have your log sheet signed by your teacher after completing each exercise as evidence that you are progressing satisfactorily through the unit. This will be retained by your teacher on completion of the unit as evidence of your learning progression.


SECTION 1 - IntroductionProcessing a payroll involves the calculation, preparation and payment of salaries and wages to employees. It also involves calculating related employer expenses.

Terms of Employment Full time – employee receives full weekly payment at the normal full time rate. Entitlements

are those available for working a full week eg sick pay, holiday pay Part time – employee works a regular number of hours each week at an hourly equivalent of

the normal full time rate. Receive benefits of a full time employee at a pro rata rate. Casual – employee works on an hourly or daily basis at a rate higher than the normal full time

rate. The rate is higher to compensate for the employee not being eligible for full time entitlements.

Piecework – employee is paid for work produced Commission – amount of pay is directly related to the value of the work done Bonus/allowance – amount paid made in addition to normal payment as recognition of

performance

Salary or Wage? Salary – payment is calculated on a yearly basis regardless of the number of hours worked.

Can be paid weekly, fortnightly or monthly. Wage – paid on an hourly basis for a fixed number of hours per week eg 40 hour week. Hours

worked beyond normal hours are paid at an additional overtime rate.

PAYG Withholding Tax A tax file number is issued by the Australian Taxation Office to an individual once an application is lodged. An employee is required to give this tax file number to their employer so that the correct amount of tax can be deducted from the employee’s pay.

When an employee commences work, they are required to complete a tax file number declaration form (a copy is in Section 3) that provides the employer with information such as their TFN and if the employee wants to apply for a rebate on their tax or claim the tax-free threshold. The tax free-threshold, currently $18,200, can be claimed from one current employer only.

The amount of tax to be deducted is calculated using a PAYG Withholding Tax Weekly Schedule . This is available from a newsagency or can be downloaded from the ATO website.

A copy of the 2013/14 tables are included in Section 3.

To determine how much tax must be withheld using the schedule:

Column 1 – employees’ total weekly earnings Column 2 – employee claims tax free threshold Column 3 – no tax free threshold 46.5% of the gross wages must be withheld if no tax file number is provided.

Once calculated, the tax is deducted from an employee’s gross pay and is forwarded by the employer to the ATO (usually monthly). At the end of the financial year, a PAYG Summary is prepared showing the total tax deducted and the gross amount of earnings for the year.


Tax Offsets (Formerly Rebates) The amount of income tax paid can be reduced by specific tax offsets (rebates) that an employee may be eligible to claim. The main ones include:

Offset/Rebate Rebate Amount

Weekly Tax

ReductionSpouse (no dependent children) - only applies to a spouse born prior to 1st July 1971

$2,355*

Parent, spouse’s parent $1726*Invalid relative $864*Housekeeper/child housekeeper – no dependent children $1,919*Housekeeper/child housekeeper - dependent child(ren) $2,299*

These can be claimed over the 52 weeks as a weekly reduction in tax or as a lump sum in a tax return completed at the end of the financial year.

Please refer to your Australian Taxation Office Weekly Tax Tables you will find the Ready Reckoner please use scale to work out the weekly tax reduction. Please see your Facilitator for assistance. (*current figures – these figures are maximums and can be reduced by separate net income (sni)

Voluntary Deductions Employees can nominate to have their employer pay some of their regular bills directly from their after-tax earnings. Examples include additional superannuation payments, trade union subscriptions, savings plan contributions and health insurance. The employee needs to provide their employer with the necessary details.

Payment Methods Employees can receive their payment either:

as a direct deposit to a nominated bank account by cheque by cash

Superannuation Guarantee – What is this? Superannuation contribution that an employer must make on behalf of any employee that earns

over $450.00 per month It is calculated currently at a rate of 9% of ordinary time earnings (excludes overtime, leave

loading) It is an expense to the employer and does not affect an employee’s earnings Payment can be made to the employer’s fund or alternatively the contribution can be made to a

fund nominated by the employee

Holiday Pay Holiday pay is based on the number of hours worked in a normal working week. The normal entitlement of holidays is four (4) weeks per year. If an employee is entitled to annual leave loading it is calculated at a percentage (17.5%, 20%,

25%) of the normal weekly wage and added to the gross holiday pay amount. The percentage changes within different industries dependent on the agreement which the employees work under.

Taxation to be withheld is based ONLY on the weekly GROSS amount.


Glossary of Terms Allowances Allowances are amounts paid by employers to cover anticipated costs or

as compensation for conditions of employment.

Assessable income Gross income including salary and wages, dividends, interest and rent before any deductions are allowed. Assessable income also includes net capital gains, ETP and other amounts that are not ordinarily classed as income.

ATO Australian Taxation Office

Australian Business Number (ABN)

Your ABN is your identifier for certain dealings with the ATO and other government departments and agencies.

Contract workers Independent contractors or contract workers generally provide for their own income tax liability by paying PAYG instalments. Individual contract workers can, if they meet certain conditions enter into a voluntary agreement to have an amount withheld, with their payers. Payments subject to withholding under a PAYG voluntary agreement are not included in PAYG instalment income for paying PAYG instalments.

Deductions Money you spend to enable you to earn income - allowable deductions only - such as stationery, equipment, rent, electricity, telephone and tools. The value of the deduction is subtracted from assessable income to calculate your taxable income.

Dependants People who need your financial support and who you look after, such as children.

Employee A person who receives salary or wages.

Employer A person (or group) who pays people salary or wages.

Exempt income Income which is not taxable.

Family Tax Assistance This is tax assistance administered by the Australian Taxation Office. It increases your tax free threshold. This means that if you have dependant children and earn under the income limit, you will pay less tax. You can choose to have less tax taken out of your pay or to reduce your tax through your tax return at the end of the income year.

Gross salary The amount of money earned before tax is deducted.

Gross tax The tax on taxable income before tax offsets are taken into account.

Higher Education Loan Programme (HELP)

Higher Education Loan Programme (HELP) is a system which was introduced to supplement funding of the Australian education system.

Income The amount of money earned from personal exertion and investments.

Income tax The amount of income paid to the Commonwealth Government which is used to meet its expenses.

Medicare levy An amount payable by most taxpayers to cover some of the cost of the public health system.

Notice of Assessment The notice that is sent to you on receipt of your tax return advising you of the tax you owe or of your refund entitlement.

Pay As You Go (PAYG) A single, integrated system for reporting and withholding amounts and tax on business and investment income.

Payroll The amount of money an employer pays in wages to their employees.Faculty of Business and Computing Page 5 of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

Tax File Number (TFN) A unique number issued by the ATO to individuals and organisations to increase the efficiency in administering tax and other Commonwealth Government systems such as Income Support payments.

Tax File Number declaration This form helps an employer work out how much tax to withhold from payments made to employees. It replaces the Employment Declaration

Tax Free Threshold If the employee is an Australian resident for taxation purposes $18,200 of their yearly income is not taxed. This is called the tax-free threshold. They may claim the tax-free threshold from one employer only. Non-residents cannot claim the tax-free

Tax return A form containing a person's income tax details which taxpayers, or their legal representatives, must complete and lodge with the ATO.

Taxable income Is gross income minus business deductions.

Withholding declaration This document helps an employee calculate an entitlement to a family benefit or tax offset and to authorise the employer to reduce the amount of tax withheld from payments.

Withholding Tax Tax that is deducted at the source: on interest, dividend and royalty payments made to non-residents, and certain investments or payments to residents where the recipient has not provided their Tax File Number.


SECTION 2 – Manual Payroll Activities

ACTIVITY 1 – Nappy Days P/L

Company Policy

Nappy Days pay a weekly wage to all employees. They are required to work a 35 hour week, Monday to Friday. Time-and-a-half is paid for overtime on weekdays, double time for work done on Saturdays and triple time for work done on Sundays.

Payment date is 2 days after payroll period. Superannuation Fund is TAFE Learner Super.

The Employees

Name Tax

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Billy Boston 123 456 001 27/10/69 25.00 4587 9826 35 Yes 100.00 18.00

Sally Grasso 123 456 002 04/05/70 20.00 4587 9827 35 Yes Spouse 5.00 10.00

Julie Jenkins 123 456 003 16/07/56 25.00 4587 9828 35 No 5.00

Matt Morris No TFN 27/03/75 25.00 4587 9829 35 5.00 8.00

Tan Myas 123 456 004 11/01/85 15.00 4587 9830 35 Yes Invalid Relative 25.00 5.00 5.00 10.00

Faculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

The Working Week

Each employee records their starting and finishing times for each day they work on a CLOCK CARD or time sheet. At the end of the working week this information is collected and the time worked at the normal hourly rate and the hours that must be paid at overtime rates determined.

Calculating the PayTo calculate the pay due to each employee for the time worked during the week, a WAGES CALCULATION CARD is completed.

1. Transfer the total hours worked at normal time for the week into the first row in the Actual Hours column. Then transfer the overtime hours into the appropriate row in the actual hours column.

2. Extend the actual hours of overtime into the Adjusted Hours column by multiplying the actual hours worked by the overtime rate (1.5, 2 or 3). Multiply normal hours and the adjusted overtime hours by the hourly base rate of pay to find the dollar value of each item, and insert this in the 'amount' column.

3. Add the figures in the 'amount' column and insert the total in the GROSS PAY row.

4. Using the PAYG Withholding Tax Weekly Schedule find the PAYG income tax that must be deducted and insert the tax as indicated in the wages calculation card. To find the appropriate amount for each employee you need to refer to the employee’s information.

5. Enter total offsets (rebates) and deduct from the tax.

6. Refer to the employee information for details of voluntary deductions and enter on the wages calculation cards.

7. Total the Deductions for each employee, insert as indicated, and subtract total from the gross pay. The result is the NET PAY, which is the amount of money the employee will actually receive as their pay.

8. Calculate the superannuation guarantee contribution by the employer for each employee. This is 9% of ordinary times earnings (ordinary, sick, holiday pay, etc – does not include overtime and leave loading)

Change AnalysisWhere wages are to be paid in cash, a CASH ANALYSIS TABLE needs to be completed so the correct quantity of each denomination of notes and coins to be used in paying the staff can be determined.

Usual policy in paying employees with cash is to use the minimum number possible of each denomination, but not to use $100 notes except for holiday pay or amounts above $500.

You complete the cash analysis table by first inserting the names of the employees and the net pay of each. Then, beginning with the first employee, you insert the value of the maximum number of $50 notes (up to $550.00) you can use in this pay, and make up the remainder with the highest denomination notes and coins possible, inserting the value of each as indicated.


Example Net Wage above $500.00

Joe Blogs has a net wage of $835.95.

$100.00 $300.00$50.00 $500.00$20.00 $20.00$10.00 $10.00

$5.00 $5.00$2.00 $0.00$1.00 $0.00$0.50 $0.50$0.20 $0.40$0.10 $0.00$0.05 $0.05

Cheque & Change DocketWhen several employees are being paid in cash, it is usual for one cheque to be prepared for the total of the net wages. The cheque is made out to CASH and is taken to the bank accompanied by a CHANGE DOCKET, which explains how the cash is to be split up. The information for the change docket is obtained from the cash analysis table, and the total on the docket should equal the total net wages on the table and the cheque.

Payment by Direct Deposit & ChequeThe most commonly used method for paying employees is that of Direct Payment to an employee’s bank account via an electronic funds transfer. For this method it is important that details of an employee’s BSB and Bank account number are accurately collected, recorded, and filed according to the organisation’s policies and procedures.

Pay SlipsAll employees must receive a pay slip detailing their gross pay, deductions, and net pay.

It is important to remember that an employee’s pay slip is issued based on the frequency that they are paid and reflects the time period for which they are paid eg if an employee is paid weekly then their pay slip will reflect their earnings for the week, an employee paid fortnightly will be issued with a pay slip showing 2 weeks earnings etc.

TASK - Pay Slips for CompletionYou should complete the pay slips for Nappy Days P/L employees Sally Grasso and Matt Morris for the week ending July 2.


ACTIVITY 2 - Bright Buttons

Company Policy

Bright Buttons pay a weekly wage to all full-time employees; they are required to work a 40 hour week, Monday to Friday. Payroll is paid two days after payroll week ending. Time-and-a-half is paid for overtime on weekdays and for work done on Saturdays and double time for Sundays. One employee, Keli Young is employed as a casual. Superannuation Fund is Spectrum Superannuation. Bright Buttons uses electronic funds transfer for the payment of wages.

Name Tax

File

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Keli Young 25 Smith St NEWCASTLE 2300 123 456 001 8/08/85 30.00 9827 6543 C Yes 100.00 18.00

Susan Lee27 Harry St CHARLESTOWN NSW 2290

123 456 002 11/03/68 20.00 9827 6544 40 Yes Spouse 5.00 10.00

Tomas Bull29 Long St BROADMEADOW 2292

123 456 003 18/07/90 20.00 9827 6545 40 No 5.00

Paul Lewis 31 Bright St HAMILTON 2303 999 999 999 1/04/88 20.00 9827 6546 40 No

TFN 5.00 8.00

Sharm Hui33 Barge StNEW LAMBTON 2305

123 456 004 25/06/84 15.00 9827 6547 40 Yes Parent 25.00 5.00 5.00 10.00

Wendy Tin 88 Lake Rd LAMBTON 2299 123 456 005 16/10/58 15.00 9827 6548 40 Yes Spouse 15.00


TASK – Bright ButtonsUsing the employee information supplied and the PAYG Withholding Tax Weekly Schedule:

Complete the clock cards to show the hours worked at the various pay rates. Have these hours checked by your supervisor and make any corrections before continuing. Complete the wages calculation cards for all employees. Complete the Direct Payment Schedule Complete the employee pay slips.


ACTIVITY 3 - Dogs on the Run

Company Policy

Dogs on the Run has six full-time employees who are paid a weekly wage (for 37.5 hours Monday to Friday) plus overtime at time-and-a-half for weekdays and double time on Saturdays. The company policy is to close for four weeks from January 2. All employees take their annual leave at this time.

All employees are paid by electronic funds transfer. Superannuation Fund Spectrum Super.

Name Card ID Date of Birth

Address BSB A/C No HolidayLeave

SickLeave

Spaniel, Colin E 001 08/08/85 25 Smith St NEWCASTLE NSW 2300 650000 246802 200 80

Collie, Brad E 002 11/03/68 27 Harry St CHARLESTOWN NSW 2290 084222 775689 200 80

Dane, Greg E 003 18/07/90 29 Long St BROADMEADOW NSW 2292 068445 0124537 200 80

Poodle, Lois E 004 01/04/88 31 Bright St HAMILTON NSW 2303 083567 789567 200 80

Terrier, Simon E 005 25/06/84 33 Barge St NEW LAMBTON NSW 2305 650000 1214578 200 80

Shepherd, Gwen E 006 16/10/88 88 Lake Rd LAMBTON NSW 2299 650000 1234567 200 80

Name Hourly Rate

Tax File Number Provided

Tax Free Threshold Claimed

Tax offset (Rebate) Super Number

Super-annuation

Savings Plan

Trade Union

Health Fund

Spaniel , Colin 45.00 123 456 001 Yes

HouseKeeper – No dependent

children 5656 9001 100.00 25.00Collie , Brad 45.00 123 456 002 Yes Spouse 5656 9002 100.00 25.00Dane , Greg 35.00 123 456 003 No 5656 9003 100.00 5.00Poodle , Lois 35.00 123 456 004 Yes 5656 9004 100.00 5.00 5.00 10.00Terrier , Simon 30.00 123 456 005 Yes Parent 5656 9005 25.00 5.00 5.00 12.00Shepherd , Gwen 30.00 No Number N/A 5656 9006 50.00 25.00 5.00 7.00


TASK – Dogs on the Run Complete the clock cards (overleaf) to show the hours worked at normal time and at overtime

rates. Have these hours checked by your supervisor and make any corrections before continuing. Complete the wages calculation cards for all employees for the current week Calculate the holiday pay due to each employee, including the 17½ % annual leave loading with

appropriate tax and other deductions. Complete the Direct Payment Schedule, the wages cheque for the week, and the employee pay

slips. Complete the pay slips for the employees G Dane & G Shepherd, providing separate details for

the current week and for the holiday pay.

Holiday Pay CalculationsHaving calculated the paid hours on the clock cards, the wages calculation cards need to be completed:

1. Transfer the hours for the current week to the top section of the wages calculation cards for each employee, then extend the hours and calculate their gross pay, tax, other deductions and net pay.

2. Next, insert the number of weeks annual leave to which each person is entitled in the first line of their HOLIDAY PAY CALCULATION.

3. Holiday pay is calculated at the normal rate of pay ie normal hours times the normal pay rate multiplied by the number of weeks leave being paid.

4. Annual leave loading gives each employee an extra 17½ % gross pay while they are on holiday. You should find the relevant amount, insert it as indicated and calculate the gross holiday pay.

5. Next, you calculate the holiday tax payable and divide this by the number of weeks of leave being taken. This gives you the WEEKLY LEAVE LOADING, which is added to the normal weekly wage. This WEEKLY TAXABLE HOLIDAY PAY is the figure you seek on the PAYG tax schedule to find the weekly tax payable. Multiply this by the number of weeks of leave to find the TOTAL HOLIDAY TAX.

6. Other deductions are entered (times weeks of leave) to find the net holiday pay. The other calculations and records are completed as before.


ACTIVITY 4 - Westerway Ceramics

This task is only for extra revision and is not scheduled as part of class work.

Company Policy

Westerway Ceramics has three full-time employees and two casuals on their payroll. The full-time staff are paid a weekly wage (35 hours, Monday to Friday) plus overtime at time-and-a-half for weekdays and double time for Saturdays. The casuals are paid an hourly rate. Superannuation Fund Spectrum Super

Employees

Name Tax

File

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Free

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(reb

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Que Chan 987 654 321 05/02/86 18.00 0724 6987 35 Yes

Housekeeper

dep. child

50.00 15.00

Ross Glenn 987 654 322 29/02/56 18.00 0724 6988 35 Yes Spouse 5.00 5.00 10.00

Kristy Hold 987 654 323 15/09/75 18.00 0724 6989 35 No 10%gross 5.00

Damien Ro 999 999 999 30/06/79 35.00 0724 6890 C 5.00 8.00

Verna Moss 987 654 324 30/04/79 35.00 0724 6891 C Yes 5.00 10.00


TASK - Time & Wages Cards, Direct Payment Schedule, Pay Slips Complete the time cards to show the hours worked at the various rates of pay for full-time and

casual staff.

Complete the wages calculation cards to show the income for each employee, the appropriate deductions and their net pay. Sick pay is paid at normal rate.

Complete the Direct Payment Schedule, the wages cheque for the week, and the employee pay slips.

Complete the pay slips for each employee.

Repeat the above tasks for the second week.


SECTION 3 – MYOB PayrollWe will build on the exercises that we completed using the manual payroll. Note that the main emphasis in MYOB will be the correct set up of the payroll and employees, as we have already learnt how to interpret time sheets and process a payroll.

When you process a payroll you will have to check your work against the result achieved when processing the employees manually. However there will be a difference in taxation as the MYOB is accessing 2011/12 tax rates rather than the latest rates 2012/2013.

Using this Learner GuideThis guide is designed to be used in conjunction with the exercises completed in your manual Learners Guide.

MYOB files have been created for you to process the payroll for each business. On completion of each exercise, you are required to check your work agains the result achieved when processing the employees manually. Once this has been done, ask your facilitator to check this work and sign the completed column on your Log sheet. Do not print any hard copy reports unless requested to do so.

At the end of each exercise there is an additional home revision task if you want to consolidate your learning. No class time has been allocated for the completion of this extra work.

If you want to complete exercises outside of class you can book computer time in the library. Alternatively, a 30 day trial copy of MYOB can be downloaded from their website or a Student edition CD (which is transaction limited for educational purposes only) purchased online or from selected MYOB retailers.

This guide and its contents are subject to copyright under the laws of Australia and, through international treaties, other countries. The copyright is owned by TAFE NSW, or in the case of some materials, third parties. You must not reproduce, transmit (including broadcast), adapt or otherwise exercise the copyright in the whole or any part of this guide, except as expressly permitted by TAFE NSW’s prior written consent.


How to open MYOBMYOB has to be opened using the Desktop Icon or Start Programs. It CANNOT be opened using the double click on the file itself as you can with Word etc.

The files you are using are located on the TAFE Campus Drive and direction will be given on the board. These files should be copied to your TAFE student drive or your USB if you have one. The files cannot be opened on the Campus Drive as they are copy protected for students.

Double Mouse click on the MYOB Icon to open the MYOB Program

This will open the program – next you need to select OPEN your company file. Create to setup a new Company file or Explore to tour the sample company.

Open Nappy Days Pty Ltd. myo

MYOB can have a password Assigned for security, at thisWindow click OK

MYOB Command CentreThe MYOB Command Centre is the initial screen presented when you open MYOB.Faculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

At the following screen select No

Title Bar and Company Name

Module Areas

Work Area

Task Bar

Some tips for using MYOB

Checking the current financial year

When completing class exercises it is important that the transactions are processed in the correct financial year.

MYOB will automatically default to the date and financial year of your computer system. As the exercises are set for a particular month, you need to make sure that the dates entered for transactions are for the month given and reflect the relevant financial year.

The check the current financial year:

Setup (top tool bar) Company Information

Conversion month – beginningMonth for computerised transactions i.e no entries enteredcan be entered prior to this time

Correcting errors

In a business, best practice principles have the security settings on MYOB for transactions with accounting errors to be reversed, not deleted. This provides an audit trail.


Current financial year June 2013 i.e transactions can only be from conversion month 07/10 to last month of financial year 06/13

For learning purposes, settings have been altered to allow transactions to be deleted in accounting errors occur.

If amendments are required for data entry errors, transactions may be altered to reflect the correct information.

The most common method of finding the details of transactions processed to-date is to use the Transaction Journal – located at the Command Centre.

You need to make sure that you have the correct date range entered. Remember, MYOB will automatically default to the current range as per your computer system.

To make changes, click on the white arrow to the left of the transaction. If a transaction is to be deleted follow the steps above to open the original entry. Once the screen opens, go to the top tool bar and click on Edit. A range of choices will appear. Select Delete to erase the original transaction.

MYOB Applications

This part of the Command Centre gives access to all the modules in MYOB. With Payroll we will be using the following-

Payroll – for setting up and processing payroll Card File – for setting up employee pay records and files.

Set up with your name

On the top menu bar select SETUP

And then select COMPANY INFORMATIONAnd insert Your Name in front of “Nappy Days”. This will then show on printed reports.

Payroll OptionsProcess Payroll – Nappy DaysFaculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

Use this option to process payroll after setting up employee cards. This option is used when hours are already calculated for employees.

Enter TimesheetsUse this option to process payroll by initially recording daily times directly into MYOB – start and finish

Transaction JournalUse this option to review work processed, and correct when necessary.

Payroll CategoriesUse this option to set up different payroll categories (overtime, deductions, super).

Print Payment SummariesThis option is used to print Employee PAYG Summaries each year.

Print Electronic Payments – Print Paycheques This option is used to print paycheques or to create a file to send to the bank to pay all employees

Print/Email PayslipsUsed to Print or Email Payslips – the pay advice to employees

Pay Liabilities / Pay SuperannuationUsed to process and pay liabilities associated with payroll to respective organizations usually at end of each month – (eg PAYG Tax, Superannuation, deductions such as Health, Union)

Payroll Cards Set Up

ACTIVITY 5 – Nappy Days Pty Ltd – Week 1

Brief payroll cards have already been set up for you. Let’s look at Billy Boston

Card Command Centre Access Card Command Centre

And select Cards List


Double Click Billy Boston OR Click on White Arrow OR Select as above and choose EDIT.

You can now review how an employee’s record has been set up.

Setting up an employee’s recordNote card type has to be Employee to work with Payroll – as such the designation has to be Individual (Not Company)

When entering a new card the name is entered and TAB or ENTER key used to make additional information available.

Enter payroll information through the Payroll Details tab

Date of Birth – Enter as dd/mm/yyyy

Gender - Choose Male / Female

Start Date - Essential to produce a pay – Enter as dd/mm/yyyy

Termination Date - Enter as dd/mm/yyyy – when this field is used a pay cannot be produced

Employment Basis - Choose Individual (Not Labour Hire)

Employment Category - Choose Permanent or Temporary (Casual)


Employment Status - Choose Full Time / Part Time / Other / Casual Employment Classification - Used to identify further the employee in a business if required Pay Slip Delivery - Choose ‘To Be Printed”. Pay Slip Email – Used if pay slip to be emailed.

Payroll InformationWith “wages” choose the type of wage category that applies to the individual employee.

Pay Basis - This is critical for correct set up. The options are Salary OR Wages

Annual Salary - This is used for employees who are “Salary” – becomes unavailable when “Hourly’ chosen

Hourly Rate - This is used for employees who are “Hourly” – becomes unavailable when “Salary’ chosen. Enter Billy Boston rate of $25.00 – NOTE – it is not necessary to enter the “.00” for cents – DO NOT enter a “$” in a value field as it will not be recognized. MYOB will automatically enter it.

Pay Frequency - Choices - Weekly – Fortnightly – Twice a Month – Monthly. Enter Billy Boston as WEEKLY

Hours in Weekly Pay Period - Enter appropriate hours – for Billy Boston 35

Wages Expense Account - Wages and Salaries expense account for Nappy Days is 6-5130

Wage Categories - Choose the wage categories that apply to the individual employee. For Billy Boston

Base Hourly – Should be already ticked Holiday Leave Loading Holiday Pay Overtime (1.5x) Overtime (2x) Overtime (3x) Sick Pay


SuperannuationSuperannuation allows the set up of BOTH the employer contributions and the employee deductions (should not be included as a deduction in the deductions tab). There are additional types of employer deductions, if needed.

Superannuation Fund - Choose TAFE Learner Support – default.

Employee Additional - Choose this category for Bill Boston

Superannuation Guarantee - Choose this category for Bill Boston

EntitlementsEntitlements set up the leave balances and accrual amounts by which entitlements increase each period.

For Billy Boston choose both Holiday Leave Accrual and Sick Leave Accrual (HINT – left mouse click “tick” in blue line to choose all

Holiday Leave Accrual – Enter 80 Hrs for Holiday Leave Accrual of carry over entitlement

Sick Leave Accrual – Enter 25 hours of carry over entitlement


DeductionsBilly Boston has 2 deductions Superannuation and Health Fund.

Superannuation CANNOT be added here as it is part of the Superannuation Category.

We need to select Health Fund


TaxesThis Wage Category sets up the correct PAYG tax deductions. Use Current Tax Offsets (Rebates) for 2013/14

Tax File Number - Enter Billy’s Tax File Number 123 456 001. If no tax file number is entered choose tax scale “No Tax File Number Resident “ to ensure MYOB automatically defaults to a tax rate of 46.5% for all income. If No Tax File Number – Enter as 999 999 999

Tax Table - Choose the appropriate tax table for Billy Boston – Tax Free Threshold – this means he has a tax free threshold claimed and has leave loading when on holidays.

Total Rebates – You need to enter the annual rebate amount here for example if employee claiming Spouse the amount would be $2355.00

For other employees choose appropriate combinations Tax Free Threshold No Tax Free Threshold (2nd Job etc) HECS or HELP (Help Loan Debt Repayment) FS – Financial Supplement Debt No Tax File Number Resident No Tax File Number Foreign Resident

Standard Pay


This sets up how the employee is to be paid.

What you see on this screen is what you are able to pay Billy Boston.

Check to ensure that all payroll information calculated is correct from your initial employee details.

Base Hourly - Billy Boston works a 35 hour week – Base Hourly equal 35 hours and the Amount 875.00 is 35 hrs @ $25. This should be checked as we enter each employee.

Base Salary - This would show for a Salary Employee – not Billy

Other Hours Fields - These default to zero hours and should be left as such unless an employee has those hours as a standard pay. NOTE – for casuals to be available to select for Process Payroll at least 1 hour field should contain a value – either base hourly or a casual rate field.

Deduction – User Entered Filed - Health Fund has a different amount for each employee. Enter deduction AS NEGATIVE amount (-18.00)

Deduction – Calculation equals Dollars Per Pay Period - This deduction method is for deductions that have the same amount deducted for all applicable employees eg Union Fees.

Superannuation – Employee Additional - Superannuation deduction has a different amount for each employee. Enter deduction AS NEGATIVE amount (-100.00)

PAYG Withholding - Note cannot enter anything here – suppressed “calculated” – means MYOB calculates each pay period. Make sure field is included

Superannuation Guarantee - Note cannot enter anything here – suppressed “calculated” – means MYOB calculates each pay period. Make sure field is included for all employees.

Savings plan is a set $5.00 per pay period for each relevant employee.

Union Fee - is a set $5.00 per pay period for each relevant employees

Payment DetailsUse this screen to enter the method of payment Faculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

Cash Cheque Electronic

Billy Boston is paid by cheque.

Using the steps above set up payroll information for: Sally GrassoJulie JenkinsMatt MorrisTan Myas

Note: All full time employees have an annual leave carry over balance of 80 hours and a carry over balance for sick leave of 25.

You are now ready to calculate a weekly payroll.

Processing the Weekly Payroll

Select Process Payroll


Select

Payroll Period Setup Screen

The payroll for a week is usually paid the following or the day after, depending on the employer and employment conditions. The pay is worked out the day following the end of the pay week. Use the payment date 2 days after the end of the pay week for all exercises.

Process all weekly employees - Choose this option to process all employees for a full payroll run

Process individual employees - Choose this option to process an adjustment for an employee or a holiday pay. Address in a later exercise

Payment Date - Choose a date 2 days after end of pay week (Check conditions of employment or company policy)

Pay Leave in Advance - Only to be used when paying annual leave

Pay Period Start - Start of the pay week – in this exercise choose 15th July. There is also a calendar available to use.

Pay Period End - Last day of pay week – 21st July – make sure the dates are a week and NOT 8 days

Select and Edit Employee’s Pay


This allows you to edit each employee to input payroll information for this particular week.

The screen for each employee is a direct result of the Wages and Standard Pay set up from their Card File. If an option to pay is not available or incorrect you need to cancel the pay for the week and correct the Standard Pay in the Card Command Centre. Check ALL employees first and note corrections required.

Click on NEXT to process Billy Boston’s pay and then you can complete the other pays.

Select Billy Boston by any of the following means

Left mouse click in the white arrow

Double Left Mouse click on the employee line

Do NOT choose RECORD until ALL employees are complete.

Not Paying an employee - simply remove the TICK against the employee and a pay will not be produced

Paying an Employee - edit the employee and once all pays are correct for each employee choose RECORD.

Editing an Employees Pay


The screen you see is generated by selections in Standard Pay. To produce the pay for Billy Boston enter HOURS in the hours field (do not override the amount fields generated by hours). Because Billy has been setup with 35 Hours this has automatically entered. These hours can be changed if necessary (say sick), with hours entered in the overtime and sick or leave categories. ALL deductions should be correct. If not, you will need to change the Standard Pay so all future pays are correct.

NOTE – Tax and deductions are NEGATIVE.

Using the clock card on your manual Learners Guide you need to enter the overtime for Billy Boston.

Enter 5 into the hours column against triple time remember to TAB or ENTER as no calculation is made while MYOB is waiting for you to complete the entry in the cell.

If you have set up Billy correctly, then the result should match your manual answers.

Make sure that amounts have been calculated for Superannuation. If these do not show – change in Standard Pay.

When Billy’s Pay is correct click OK.

Complete processing the pays for the remaining 4 other employees.

Correcting a Pay before completing payroll – initial week

Where an employee’s pay has to be corrected we need to CLOSE the weekly payroll and adjust the Standard Pays.

You will need to re-enter ALL EMPLOYEE HOURS for the week.

Completing the Weeks’ PayOnce all payroll information has been entered, select RECORD if correct.

A confirmation shows confirming payment – select CONTINUE if correct


Click OK and proceed

Do not print paycheques

Proceed to the NEXT screen

Payroll Weekly ReportHaving finished the payroll a weekly payroll report should be run

Reports can be selected from the Menu Bar, or from the Command Centre

Choose the Payroll Reports, and Select

ACTIVITY SUMMARY, the first payroll report.

CUSTOMISE the report for the required dates 23/07 remembering that the dates used are payment dates not payroll dates.

Select ALL EMPLOYEES, DISPLAY.

The Payroll Activity Summary Report is displayed for the week. The reporting is based on the date paid.


Editing FunctionsDeleting a transaction

If a transaction has been recorded incorrectly it can be deleted UNLESS the employee has already received the pay.

To delete a transaction locate it using the TRANSACTION JOURNAL in the Command Centre and EDIT the transaction.

Edit the date range is correct.

Select the White Arrow to the left of the transaction to open the payment information screen.

From this screen select the EDIT item on the TOP MENU BAR then delete the transaction


ACTIVITY 6 – Nappy Days Pty Ltd – Week 2

Using the information below, process the payroll for employees of Nappy Days P/L for the week ending 28/7.

Produce the following reports for the week Payroll Activity Summary Pay Advice for Billy Boston

Name

Normal Hours

Overtime Time &

Half

Overtime Double

Billy Boston 35 2 5Sally Grasso 35 4 3Julie Jenkins 35 2 4Matt Morris 35 4Tan Myas 35


ACTIVITY 7 – Bright Buttons – Week 1

Open the file Bright Buttons.myo. Add your name to the company name by clicking on Setup, Company Information.

In this exercise you will

1. Create cards for the 6 employees2. Process pays for the week ending 09/09/XX using the timesheets from your manual learners

pack.3. View reports and check the accuracy of your work (reports on following pages). Make any

necessary corrections.4. When payroll balances. View a pay advice for Sharmi Hui and an Activity Report Summary.

ACTIVITY 8 – Bright Buttons – Week 2

5. Using the information below, process the payroll for employees of Bright Buttons for the week ending 16/09/XX

6. Display and review the following reports for accuracy. Make any adjustment/corrections as necessary. View the following reports:

Payroll Activity Summary – Week 2 Pay Advice for Susan Lee

Name

Normal Hours

Overtime Time &

Half

Overtime Double

Keli Young 25Susan Lee 40 4 3Tomas Bull 40 2 3Paul Lewis 40


Sharm Hui 40 3Wendy Tin 40


ACTIVITY 9 – Dogs on the Run – Week 1

Open the file Dogs on the Run.myo. Add your name to the company name by clicking on Setup, Company Information

Review the General Payroll Information.

Brief profile cards exist for all employees. You are required to enter Payroll Details and Payment Details using the information from your manual pack.

Leave Entitlements

Dogs on the Run pay employees 37 ½ hours a week, and full time employees receive 4 weeks annual leave a year and 10 days sick pay.

Entitlements

Remember to add the Carry Over annual and sick leave when entering data into the employees cards

Payment Details

Need to change in each of the employees card that the payment details. Change to Electronic and add BSB.Bank Account Details and Bank Account Name will be the name of employee.

Entering an employee’s Payment DetailsAfter you enter an employee’s Payroll Details click on the Payment Details tab.

All employees of Dogs on the Run are paid electronically so you need to select Electronic (click on blue drop arrow)

Enter the following information:Faculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

BSB Number Bank Account Number Bank Account Name Statement Text – Deposit Wages

Click OK to save and close.

Processing Holiday PayAll employees of Dogs on the Run are taking leave for the month of January. You need to process their holiday pays so that they are paid on the same day as the pay for the previous week.

Do the Weekly Payroll first and complete, and THEN process the Holiday Pays.

In payroll Command Centre select PROCESS PAYROLL

In Select Pay Period TICK PAY LEAVE IN ADVANCE

Payment date is 3rd JanuaryLeave period is 2nd January to 29th

January

As this is Holiday Pays only, Weeks of standard pay should be 0; Weeks of Leave in Advance should be 4.

Enter Holiday Pay

Select NEXT to enter SELECT & EDIT EMPLOYEE’S PAY and edit Colin Spaniel

Enter 150 Hours in Holiday Pay and also Holiday Leave Loading


Enter 0 Hours in Base Hourly

Note the amount of tax and that deductions are 4 times a weekly pay.

Remember you will need to change the PAYG Withholding manually to match your manual records.

After editing all payrolls press Record and then at the next screen refer to notes on Electronic Payments.

Electronic PaymentsPayroll can be paid electronically to the bank by the use of a Bank ABA file (extension).

Payment can be processed as part of the Process Payroll routine or later using the Payroll Command Centre – both options “Prepare Electronic Payments”.

For the first week you processed 2 payrolls – the first for the weekly payment and the second for the holiday pays. Prepare Electronic Payments in the Payroll Command Centre will be used to pay all the pays for both ordinary and holidays in the one transaction.

When you have confirmed all reports are correct – select PREPARE ELECTRONIC PAYMENTS. A list of all employees to be paid electronically will appear.

Tick the pays to be processed – for Dogs on the Run, this will be ALL.

On the next screen that appears, choose either the Payroll cheque account or Bank account (depending on information provided) as the account from which the payment will be made.

Check the date is the payment date and all details are entered according to organisational guidelines.

Tick the employees to be transferred


Select appropriate account Check data

Click on BANK FILE button

at the bottom of the screen You get a message to say

that this transaction will be recorded before the file is created select OK

This takes you to the Save As box – you can save the .ABA file to your USB but for this exercise we will not be saving.


Click cancel for exercises (in organisation would save file to appropriate location)

When you check your ‘Bank Register’ report—the electronic clearing account should have a zero balance.


Note zero balance

Produce an Activity Report Summary on screen for 3rd January. This report will include both the ordinary pay week run and the holiday pay run totals.

Additional Employees – Dogs on the Run


George Trainer is the Manager. Payroll has been requested to now include his details on the payroll (he was previously paid through Head Office) and transfer his sick and holiday entitlements.

George is on salary and paid $2,000.00 per week for nominal 37 ½ hours – no overtime. He contributes $150.00 to super, and $25.00 to Health Fund. His sick leave entitlement carried over is 25 hours and annual leave entitlements 155 hours.

Other information Tax File Number is 123 456 789 Claims the tax free threshold Address is 10 Supervisors Ave, Charlestown 2290 Date of birth 10/12/1973 Start date 30/01/2013 Employee ID E007 Bank Account 111222 BSB 802 800 Super Fund Number 5656 9007

Create a new employee card for George

Peter Pup is a new casual employee, paid $30.00 per hour.

Create a new employee card for Peter. Other information

Tax File Number is 123 456 888 Claims the tax free threshold Address is 10 Catfree Ave, Charlestown 2290 Date of birth 10/12/1988 Start date 30/01/13 Employee ID E008 Bank Account 111333 BSB 802 800 Super Fund Number 5656 9008

Create a new employee card for Peter.


Process the weekly payroll from the following time sheet entry for week ending 05/02.

Name Ord Hours T ½ hrs DT hrs Sick HrsFaculty of Business and Computing of 57BSBFIA302A Process Payroll – Learners Guide Version 5 - 8 July 2013

C Spaniel 30 3 7 ½B Collie 22 ½ 15G Dane 30 3 7 ½L Poodle 37 ½ 2 2S Terrier 37 ½ 1 2G Shepherd 15 22 ½G Trainer SalaryP Pup 10

To enter in sick leave of 7.5hrs for Colin Spaniel as below – note that the base hourly needs to be changed to 30hrs. The base of 30hrs plus sick leave of 7.5 equals 37.5hrs for the week

Produce an Activity Report Summary for 5th February.

Note – As Peter Pup has earnings of less than $450.00 so far this month no super will calculate. An adjustment will be next week.



Process the weekly payroll from the following time sheet entry for week ending 12/02.

Name Ord Hours T ½ hrs DT hrs Sick HrsC Spaniel 37 ½ 3B Collie 37 ½ 2 2G Dane 37 ½ 1 2L Poodle 37 ½S Terrier 37 ½G Shepherd 15 22 ½G Trainer Salary 7 ½P Pup 15

Produce an Activity Report Summary for 12th February.


Review your Bank Register Report from 1st January 20XX to 14th February 20XX on screen (from the Banking module reports) to check that all payments have been processed.



Note zero

balance

Produce a Payroll Employees Register Detail on screen from 1st January 20XX to 14th February 20XX. Reports, Payroll, Employees, Register Detail customise dates.


ACTIVITY 12 – Colouring World - Comptency

You are about to complete your competency task. In order for you to successfully complete the task it is essential that BEFORE you begin; you speak to your facilitator and collect additional information

Please ensure your log sheet has been signed and dated by your facilitator for all tasks to this point


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