Answers To Payroll Questions – Faultless Fencing Pty Ltd

1 How do you ensure all employees of Faultless Fencing Pty Ltd payment arrangements and relevant documents will be confidential in accordance with organisational policy & procedures?

The mainatainenance of confidentiality is important for effective payroll system. The payroll involves performance of task that is necessary for paying the employee and operating the business legally. The confidentiality involves protecting the financial data of the payroll process.  It is critical to maintain the confidentiality of the payroll data of the employee because if there is a leak then it will jeopardise the financial interest of the employee. In order to maintain the confidentiality it is important that the payroll employee work in a separate location. It is important to provide emphasis that the employee should maintain the secrets. The company should make a confidentiality agreement so that the employee responsible for payroll maintains confidentiality. In order to maintain confidentiality only the employee of the upper management should be given access to the payroll departments. This will ensure that the policy of the company to maintain confidentially of the payroll information is maintained.

2.As a payroll officer, when and how you distribute payroll reports to management and all employees?

The payroll officer is an employee responsible for calculating and distributing payroll to the employees. There are various job titles like payroll manager, payroll administrator or payroll clerk. The duty of the payroll manager is updating and reviewing the changes, exemptions, coverage of insurance etc. The role of a payroll manager is issuing and distributing cheques make deposit, payroll deductions etc.  It is also the role of the payroll officer to report to the management and the employees. The payroll report is distributed to the management at the end of the month after the payroll process is completed. The management verifies the report and approves the payment of the employees that is mentioned in the pay roll report.  The payroll report is distributed to the employees after the management approves it and the payment is made. The payroll report should be distributed electronically.

3.What legislative and regulatory requirements do you need to keep in mind when filling documents (Payroll records) for Faultless Fencing PtyLtd? And how long you need to keep it?

In Australia, it is a legal requirement for the employer to keep records of employments. The specific record keeping requirements differ according to the employees. It is necessary for the employees to keep records electronically or written. It is a regulatory requirement that the record should be in English.  The organisation is required to maintain employment records by keeping the time and wages books. It should be noted that it is the responsibility of the employer to ensure that all the information are made available.  It is necessary that the employer should keep all the employment records for at least 7 years. It is the responsibility of the employer to maintain the records of both the past and current employees. It is necessary to keep the record relating to the long service leave during the tenure of employment and for the seven years after the end of the employment. The requirement for keeping the accurate employment record is the responsibility of the employer. The employer can use the service of third party for management of payroll but it is the legal responsibility of the employer to ensure that all the information is maintained and it is correct.  These legislative requirements should be followed for filing the payroll documents in the Faultless Fencing Pty Ltd. The record is required to be maintained for seven years.

As a payroll officer, when and how you distribute payroll reports to management and all employees?

4.How and what procedures you will follow to provide payroll related Information to external parties in accordance with organisational and legislative requirements?

The personal information that are held by the organisation are generally disclosed to the directors and employees. However, it may be necessary for to disclose the information to the third parties or authority. This information are required mandatorily by law to be disclosed. In this case, the company will follow the policy of providing only the relevant information that are requested by the external party. The information will be shared in a confidential manner so that the information is not leaked to the parties other than the required external party. The law provides that information cannot be disclosed without prior consent so it is necessary to obtain consent before disclosing information. In certain cases, the information can be disclosed without consent if authority or law requires it.

5.If you found an error with an employee’s payroll data, who would you clarify the discrepancy with?

The discrepancies in the payroll database should be clarified in a timely manner. If it is noticed that there is an error in the payroll data of an employee then in that case the discrepancy should be clarified from the senior management and the employee. The procedure that should be followed is with the permission of senior management the information of the employee should be collected. The discrepancies that are noticed in the information should be verified and the necessary changes should be made in the payroll database.

6.Nick Smith is planning on taking leave for a week, and Donna Sullivan (from another branch) has been asked to take over some of Nick’s working hours while he I away, Donna would like to know what Nick’s hourly rate of pay is. When responding to the enquiry:

1. 1. What do you need to consider before responding?
   2. Would it be appropriate for you to give Donna this information?

It is the responsibility of the organization to maintain secrecy of the information of an employee. Therefore, before disclosing the hourly rate of an employee the employer should consider for obtaining consent from the employee. If the employee agrees for disclosing the information then the employer can disclose the hourly rate to another employee.

b. No, it will not be appropriate to disclose information of Donna. It is because if there is a difference in hourly rate it will create a conflict among the employees and this will vitiate the working environment. Therefore, it can be said that it will be inappropriate to disclose the information.

What legislative and regulatory requirements do you need to keep in mind when filling documents (Payroll records) for Faultless Fencing Pty Ltd? And how long you need to keep it?

7.Go to the Tax Practitioners Board website and find answers to the following questions

1. 1. List the payroll services that are deemed to be BAS agent services.
   2. What are the consequences for a contract bookkeeper for performing BAS agent
      services without registration?
   3. What are the qualifications and experiences required for BAS agent registration?

A. The payroll service that are deemed BAS agent service are:

• The BAS agent confirms the withholding tax obligations of the employee for the client.
• The preparation of payment summary report that includes amount of fringe benefits and the employer contribution to superannuation fund.
• The services that are included within the Superannuation Guarantee (Administration) Act 1992 that relates to the payroll function.

B. The Tax Agent Services Act 2009 states that there are various civil penalty provisions that are applicable for providing BAS without proper registering. The penalties are imposed by federal court if the civil provisions are breached.

C. The primary qualification that is required for becoming a registered BAS agent is a certificate IV financial service in bookkeeping or accounting. The agent should qualify board-approved courses GAT/ BAS principles of taxation for registration. In addition to this, it is necessary to have 1400 hours of relevant work experience for past 4 years for becoming a registered BAS agent. However, if the individual has a membership in professional Association then irrelevant work experience of 1000 hours in past 4 years is required for becoming a registered BAS agent

8.The code of professional conduct requires BAS agent to take “reasonable care” in preparation of reports and returns and other processes required of their client. What does “reasonable care” mean? What is regarded as unreasonable?

The Tax Agent Services Act 2009 provides that reasonable care is an important component of professional code of conduct. The reasonable care means that activity should be performed with degree of concern and caution that a reasonable person needs to exercise. The reasonable care means performing the duty with competence. The duty can be performed with competence if the necessary qualifications and trainings are available.

9.Explain the following taxes.

1. 1. PAYG withholding tax
   2. PAYG instalment tax
   3. Fringe benefits tax

A. The pay as you go withholding tax is an amount that is which hold at the time of making certain payments. The withholding tax needs to be deducted from payment made to employees, directors and other office holders. The payments made under labor hire agreement and voluntary agreement requires deduction of PAYG withholding tax.

B. The regular payment made by the taxpayer towards the expected annual tax liability is known as pay as you go installments. The PAYG installment tax is only applicable if the taxpayer makes earnings from business or investment.

C. The tax paid by the employer on certain benefits provided to the employees or family is known as fringe benefit tax. The benefits could be in addition to the salary or part of the salary package. The fringe benefit tax is separate from income tax and is calculated on the value of the benefits provided. The fringe benefit tax is calculated by multiplying the FBT rate with the value of the benefit.

10.What is an Enterprise Agreement? What is a modern Award? Compare Enterprise Agreement with Modern Awards.

The enterprise agreement highlights the conditions of employment for certain group of employees at a particular workplace. It is important to note that a pay rate in the enterprise agreement cannot be less than the pay rate in relevant modern award. The modern awards is occupation and industry based minimum employment standard that is applied over the national employment standard. It can be seen that in most industries there are modern award that covers all employees in that particular sector.

11.What are the principles of workplace privacy?

The principles for workplace privacy are:

• The collection of Limited information;
• The notice should be provided to the individual for collection, use and disclosure of personal information;
• Personal information should be kept accurate and complete;
• It is important to secure the personal information;
• It is important to give access to personal information;

12.What components make up Process payroll 

The payroll process involves the following steps:

• The collection of personal information of employees;
• Entering the detail information in a payroll database;
• The processing of payments;
• The reduction of relevant taxes;
• Maintaining the details of leaves by the employees;
• To make superannuation contribution;
• In case of termination or retirement providing documentation that unnecessary;
• The reporting of government taxes;

13.Calculate the net for a person earning $750.00 per week paying $102.00 tax and a child support payment of $115.00 using the 2011 PEA of $349.13

Earnings (per week)                 = $750

Less: tax                                      = $102

Less: child support payments =$ 115

Net earnings                                = $533

14.Calculate the payment due to an employee, Robyn Brown, based on the following:

 Robyn has a base wage of $19.25 per hour. She worked 38 hours at normal time, three hours at time + ½ and      one hour double time and received a meal allowance of $15.60 (pre-tax). The tax (withholding) on her earnings is $145.00.

Employee	Robyn Brown	Date	19/5/11
	Hours	Rate	Total
Wages	38	$19.25	$731.5
Overt time	3	$19.25	$57.75
Pre Tax Allowances
Meal Allowance			$15.60
Pre Tax Deductions
Pre Tax Earnings			$789.25
Tax			145.00
After Tax Allowances
After  Tax Deductions
Net Pay			644.25

15.Rebecca has a gross income of $75,000 and makes personal superannuation contributions of $3,500 each year. She has adequate private health insurance. She is considering investing $5,000 per year into superannuation via a salary sacrifice arrangement with her employer. However, she wishes to retain approximately the same take home pay.

Calculate and comment on the benefit (if any) arising from the proposed salary sacrifice arrangement, by completing the table below for the 2014/15 tax year.

	Option 1 No Salary Sacrifice	Option 2 Salary Packaging – Salary Sacrifice
Salary	75000	70000
Salary sacrifice contributions		5000
Gross salary	75000	75000
Income Tax Payable	$15922	15922
Medical Levy	318	318
Net salary after tax	58760	58760
Post tax superannuation contributions	5000
Take home salary
Superannuation invested
Rebecca’s contributions	5000	5000
Employer contributions	5000	5000
Total Invested	10000	10000
Less: Contributions tax	1500	1500
Net superannuation invested	$8500	$8500