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The document discusses the key steps in payroll accounting including time reporting, pay computation, benefits and paid leave, tax computation and submission, and pay distribution. It covers pre-payroll processing, net vs gross payroll, post-payroll processing including generating earnings and pay statements, issuing payments, and posting payroll. It also discusses taxation and year-end activities like reconciling employee data, wages, taxes, and benefits.

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Siraj uddin
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9 views5 pages

Presentation 2

The document discusses the key steps in payroll accounting including time reporting, pay computation, benefits and paid leave, tax computation and submission, and pay distribution. It covers pre-payroll processing, net vs gross payroll, post-payroll processing including generating earnings and pay statements, issuing payments, and posting payroll. It also discusses taxation and year-end activities like reconciling employee data, wages, taxes, and benefits.

Uploaded by

Siraj uddin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Payroll Accounting

Time Reporting Pay Computation Benefits and Paid leave Tax Computation + Pay Distribution
Submission
•Liaise with internal tax •Generate Direct deposits
•Setting and amending employee •Summarizing wage dues •Assessing 401k Plans, other
team on UK tax liability and send to banks and
database with Payroll journals •Reimbursements and investment accounts or paid
and changes in HMRC tax other agencies eg:-
•Bifurcating Permanent and Bonuses vacations
rules loading prepaid credit
Temporary Employees •Accounting for changes •Vouchers & Other benefits
•Calculate gross pay, tax, cards
•Collecting, Verifying and to pay deductions ex:- PF, •Fulfil any ad hoc duties when
national insurance, SSP, •Print payroll registers
Assessing Timecard Information Medicals etc. required
SMP, other non-statutory showing employees
and Bank details •Arriving at Gross-pay
deductions and net pay gross-to-net wages for
•Payroll controls are completed
•Submit tax reports to the current payroll
each month a week before pay-
bank on timely basis •Distribute pay reports
dates
and tax reports to
employees and related
departments
Pre-payroll Processing
• Pre-Payroll Processing is the first step which begins with payroll ID
identification to access the time reporting of the employee for
calculation of no. of hours worked subject to error correction. This also
includes employee database maintenance

Details to check:-
• Work Dates
• Cheque Date
• Period Number
• Company Number
• Pay Cycle Group Code
• Bank Account Number
• Minimum Cheque Amount
• Denomination Minimum
• Process Calendar Month Basis
Net vs. Gross Payroll
• Gross payroll refers to the total amount of money the company
pays out for its employees during a pay period, net payroll
refers to the money that employees receive from the company
after it deducts the required withholdings
•A company uses its gross payroll to determine the total amount of money it
must pay out for labour expenses during a given period, but it uses its net
payroll to determine the amount of money it will pay directly to its employees.
The company then pays the money it withholds to other recipients
Post-payroll Processing

• Generate earnings
– You can automatically generate earnings for salaried positions, for positions that use a schedule, and for recurring earnings, premium earnings,
and retroactive earnings

• Release earnings
– To process payments for workers, you must release the earnings.

• Generate pay statements


– When you generate pay statements, all worker deductions and employer contributions for benefits and taxes are calculated, benefit accruals are
processed, and the worker’s net pay is determined. Completed pay statements are used to issue worker payments

• Issue worker payments


– When you submit pay statements, an invoice is created and posted to the general ledger for the sum of the worker’s net pay for the vendor. A
payment journal that has lines is created, which lets you generate and post payments

• Post payroll and generate vendor invoices


– This process combines the amounts from all the pay statements that were posted for the period, and uses the benefit and tax setup information to
create an invoice for each vendor. The totals and their corresponding accounting distributions from the original pay statement lines are used to
create the invoices
Taxation and Year-end Activities
• Check employee and employer indicative data
– Assess discrepancies in employee database against permanent,
temporary and terminated employees
• Check wage, tax and benefits data
– Compute compensation, insurance, medicals, other benefits,
retirement contribution and tax. Compare total wages reported for
each tax; reconcile any differences.
• Check for special procedures
– Reconcile pay dates, bonus payrolls.

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