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FNST PB402

Establish and maintain payroll systems

Information for Students

 

Unit of Competency: FNSTPB402 Establish and maintain payroll systems

 

 

 

Assessment plan

The following outlines the requirements of your final assessment FNSTPB402 Establish and maintain payroll systems. You are required to complete all tasks to demonstrate competency in this unit.

This unit is assessed through the following:

 

Assessment Requirements	Overview	Due date
1. Written questions	You must correctly answer all questions.
2: Establish and maintain payroll project	You must set up and maintain a payroll system for Oz Office Supplies.
3: Payroll roleplays	You must participate in two payroll roleplays.

All assessments will ensure that the principles of assessment and rules of evidence are adhered to. The principles of assessment are that assessment must be valid, fair, reliable and consistent. The rules of evidence state that evidence must be sufficient, valid, current and authentic.

If reassessment is required, you will be given the chance to resubmit the assessment task. You will have up to three opportunities to resubmit each assessment task. If, after the third attempt, the assessment is still not satisfactory your trainer/assessor will make alternative arrangements for assessment.

Assessment Task 1: Written Questions

Overview

This is an open book test, to be completed in the classroom.

A time limit of 2 hours to answer the questions is provided.

You need to answer all of the written questions correctly.

Your answers must be word processed and sent to the assessor as an email attachment.

 

Required

·        Access to textbooks/other learning materials

·        Computer and Microsoft Office

·        Access to the internet

Assessment criteria

 

All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily.

 

Instruction to students

 

Provide answers to all of the questions below:

 

1.                  List a useful source of information for keeping up to date with Modern Award changes to ensure that your payroll is correctly maintained.  

 

2.                  Bee Enterprises has an enterprise agreement with staff. Assume that in the role of the new payroll officer, you are reviewing employee payments and discover that wage rates are now less than the current award rates, which changed recently. Explain if this is allowed under the Fair Work Act 2009 and give a reason for your answer.

3.                  Outline the payroll category in MYOB that can be adjusted based on an employee’s award or agreement. 

 

4.                  Explain why is important for organisations to have confidentiality/privacy policies and procedures in place and what a payroll officer needs to be aware of when dealing with personal information?

 

5.                  Give at least two payroll actions that a payroll officer would need to get authorisation for.

 

6.                  Explain the term “structure of authority’ as used in organisations in relation to payroll functions within an organisation.

 

7.                  Outline two instances in which a payroll service provider does not need to register as a tax agent or BAS agent, as set out in the Payroll Service Providers Information Sheet issued by the Tax Practitioners Board according to the Tax Agent Services Act 2009.

8.                  Assume that a client of yours is trying to decide whether to continue using their manual payroll system or to upgrade to a computerised system. To help them make the choice, explain the differences between manual and computerised payroll system, including at least two features and two advantages and disadvantages of each type of system.

 

9.                  Explain why it is important for a payroll officer to understand the Fair Work Act 2009 and the National Employment Standards.

 

10.             Under the Fair Work Act, how much annual leave is an employee entitled to. 

 

11.             Explain the superannuation guarantee scheme, including employee eligibility for superannuation under the Superannuation Guarantee Act.

 

12.             What allowances are there for employees with regard to voluntary contributions for superannuation?

 

13.             What tax benefits does payment of voluntary superannuation provide?

14.             Explain the circumstances in which an employer must pay a super guarantee charge.

 

15.             According to the Corporations Act, how long should business records be retained? What happens if a business does not retain required records?

 

16.             Explain the purpose of workplace/occupational health and safety legislation. Give an example of a safe work practice for a payroll officer needs to implement.

 

17.             Explain workers’ compensation and give an example of an adjustment that may need to be made to a payroll system if an employee is entitled to worker’s compensation.

 

18.             Explain why businesses have to pay payroll tax and identify thresholds and rates for businesses for the state or territory in which you are living.

19.             How long does the ATO require small businesses to keep records for? Give two examples of records that must be kept.

20.             Explain the importance of keeping payroll information confidential.

 

21.             Outline three areas that an organisation must address in regard to procedures around collection of personal information of employees to ensure it complies with the Australian Privacy principles.

 

22.             Outline the ATO requirements in relation to repayments of a higher education loan program (HELP).

 

23.             Explain the purpose of the Medicare levy and identify the rate at which it is levied.

 

24.             Explain the purpose of modern awards within the national workplace relations system and give an example of a modern award.

 

25.             Explain the purpose of enterprise bargaining and give an example of an enterprise agreement.

26.             Explain whether an employment contract can provide for less than the legal minimum under the NES.

 

27.             Under the Fair Work Act 2009, how much sick leave are employees entitled to. 

 

28.             Explain the minimum legal requirements for long service leave.  

 

29.             Outline the four main items that must be recorded against an employee’s payroll record when they commence employment with a company to ensure they receive their correct salary and entitlements and their details are reported correctly to the ATO.

 

30.             Explain the purpose of the Australian Bureau of Statistics (ABS) Act and briefly explain how statistics produced by the ABS can be used by a business.

 

31.             List three entities who are entitled to an ABN

32.             Explain an employer’s obligation regarding PAYG withholding tax and outline when PAYG withholding amounts must be paid for small withholders (individual or business that withholds amounts under 25,000), for a medium withholder (individual or business that withholds amounts of $25,0001 to 1 million) and large withholders (individual or business that withholds amounts totalling more than $1 million).  

 

 

33.             Who is responsible for paying fringe benefits tax, and what is the FBT Rate for the financial year ending March 2015 and the financial years ending 2016 and 2017.

 

34.             What is fringe benefit in tax terms and two examples of fringe benefits and two examples of items used for work that would not be classified as fringe benefits.

 

35.             Give three examples of information that is reported on an Instalment Activity Statement (IAS)?

 

36.             In your own words, explain each principle of the TPB Code of Professional Conduct (Code) for all registered tax agents, BAS agents and tax (financial) advisers.

 

37.             What is an Early Termination Payment and when must it be made to be considered as an Early Termination Payment? 

 

38.             How are Early Termination Payment made outside the permitted period taxed?

 

39.             Explain the concept of salary packaging and give two examples of common items that can be salary packaged.

 

Assessment Task 2: Establish and maintain payroll system project

 Overview

This task requires you, in the role of Payroll Officer for Oz Office Supplies, to set and maintain a payroll system using up a computerised payroll system for the company (MYOB).

 

You will be required to produce a number of payroll reports as outlined in the assessment.

 

Your assessor will observe you setting up the system and will use a checklist to record your performance. The checklist is included for your information and you should review it to ensure you understand the criteria against which you will be assessed.

 

This assessment is to be completed in the simulated work environment in the class.

 

Required

·        Access to a computer with MYOB Student Edition and internet access

·        Company Information

·        Employee Information

·        Payroll Preparation Report Template

·        Payroll Policy and Procedures

·        Time Sheet Summary

·        Timesheet

·        Printer

 

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

 

Questions

Complete the following activities:

1.                  Payroll system preparation

Review Company Information and Employee Information so that you are familiar with the information you need to establish and maintain the payroll system.

 

Review the Oz Office Supplies Payroll Policy and Procedures too, as you will need to follow these throughout this assessment.

 

 

 

Conduct research to identify the following:

 

·        Scope of services

Describe the scope of payroll services that a BAS Agent can provide.

Also find out how the services provided by a bookkeeper differs to that of a registered BAS Agent.

 

·        Experts

Locate, and record the details of, at least two local experts who could help if assistance was required with payroll services.

Give the name of the individuals or companies, their contact details, and the services they provide.

 

·        Termination

Name and outline the legislation that covers notice of termination and final pay for Australian workers.

Use the Fair Work Ombudsman website below to help you identify how much notice Oz Office Supplies’ employees must be given if their employment is to be terminated.

List also the company’s payroll obligations to the terminated employee if Oz Office Supplies decides to pay an employee out rather than let them work out their notice period.

 

Write a short (about a page) report that includes the information that you have collected on the above.

Use the Payroll Preparation Report Template to guide your work.

 

 

2.                  Send an email to your assessor.

3.                  The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

4.                  It should introduce and summarise the contents of the attachment.

5.                  Attach your Payroll Preparation Report to the email.

6.                  Set up payroll system

Using the Company Information and Employee Information for Oz Office Supplies, set up the payroll system for the company as outlined below.

 

Before you start this task, find out about annual leave entitlements as set out in the National Employment Standards, based on the employment status of each employee. You will need to use this information when setting up the payroll system and when you are required to explain entitlements to your assessor. 

 

Your assessor will observe you entering all of the information into the payroll system to check that you can do this correctly.

 

Complete all of the following tasks:

a)     Click on the Load Tax Tables button to check that the latest tax tables have been included. Show your assessor how to use the system to check for updates.

b)     Set up payroll information as per the company information provided to you.

 

c)     Assign linked payroll accounts.

 

d)     Review payroll categories included in MYOB and enter the information provided to you. In some cases, MYOB automatically includes the information and you will need to check this.

 

e)     Build the employee list by using the Employee Information provided to you. As you are entering the information about annual leave, explain to your assessor standard employment entitlement for annual leave according to the National Employment Standards.

 

f)      One of the employees, Alice Brown has a salary sacrifice arrangement in place whereby he pays an additional 2% of his salary into superannuation. Enter this amount into MYOB under superannuation.

 

Explain to your assessor what salary sacrifice (sometimes also known as salary packaging) is.

Give at least three examples of salary sacrificed benefits and three important considerations for a salary sacrifice arrangement.

You should also explain Fringe Benefits.

 

Your assessor will make notes on your verbal explanation in the checklist.

 

g)     As stated in the information provided to you, one of the employees is covered by an Award. Ask your assessor about their entitlements in relation to Rostered Days Off. Your assessor will provide these to you. Enter this information into MYOB to allow for rostered days off. If you do not know how to enter rostered days off into MYOB, use the help function to assist you to enter this information or research this information on the Internet.

 

h)     When you have completed entering all of the employee information, open the cards for each employee and check the information you have entered into MYOB for each employee against the employee information provided to you to make sure it is all correct. Edit any errors.

 

i)       Ensure that ensure the security of your MYOB company file according to the Oz Office Supplies Payroll Policy and Procedures. You should also explain to your assessor who may access records according to the policy, how often passwords must be changed and why.

 

7.                  Prepare and process payroll

You are required to process payroll according to the time frame identified in the Oz Office Supplies Payroll Policy and Procedures and according to the Time Sheet Summary

Assume that you are provided the time sheet summaries each week, as set out in the Payroll Policy and Procedures.

 

Complete all of the actions that are required by the Payroll Policy and Procedures to process the payroll for the week ending 7 June 2018, noting that this will also include payment of superannuation (payroll liabilities).

 

8.                  Send an email to the Finance Manager (your assessor).

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should state that the payroll details have been entered into MYOB and seek their approval to process the pays as set out in the Payroll Policy and Procedures.

 

Your assessor, in the role of the Finance Manager, will give their approval, or ask you to make any necessary alterations, verbally.

9.                  Process the payroll.

You are required to process the pay and print the pay slips for Alice Brown, Ben Clark and Chris Dean and prepare electronic payments for the week ending 7/6/18.

Your assessor will check these to make sure you have entered all of the information accurately.

 

10.             Process further payroll periods.

Repeat this process that you carried out in activity 4 for weeks ending 14/6/18, 21/6/18 and 28/6/18 using the information provided to you.

 

It is not necessary for you to email the Finance Manager for their approval for these weeks.

 

Print off the payslips for the three employees and give these to your assessor.

11.             Handle discrepancies

Assume you have received the following email from Chris, one of the employees.

Dear Payroll Officer

 

I have just received my pay slip for the week. I have only been paid for 12 hours, whereas in fact I worked 21 hours. 

Can you please update this, so I can be paid the correct amount?

 

Thanks Chris

 

Review the Payroll Policy and Procedures and follow the correct procedure for handling discrepancies. Assume that your assessor is the Administration Manager.

 

Once you receive approval, you should also demonstrate to your assessor how to make the relevant change in MYOB.

 

12.             Produce payroll records

The Oz Office Supplies Payroll Policy and Procedures state that when you have completed the tasks above, you are required to print off the following end of month reports:

a)     Payroll summary report for June 2018

b)     Payroll register report for June 2018

c)     Payroll activity (summary) report for June 208

d)     Profit and Loss Statement for June 2018

e)     Balance Sheet as at 30 June 2018

f)      Entitlement Balance (summary) report for June 2018

g)     Superannuation accrual by fund (summary) report for June 2018

 

Create a folder and save all of the summary reports you have generated as pdf files.

Follow the Oz Office Supplies policy on storage of electronic files to store all end of month reports under Payroll summary reports for the month in question.

Your assessor will observe you filing the documents.

 

13.             Send an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce and summarise the contents of the attachments.

Attach the payroll records that you created in activity 5 to the email.

14.             Complete checks and balances

This part of the assessment requires you to complete checks and balances as follows:

a)     Check that the payroll activity report and the payroll register report match and that the subsidiary ledger agrees with the control accounts.

b)     Complete the reconciliations of payroll on the June Payroll Checklist as provided.

c)     Reconcile the PAYG withholding.

d)     Pay payroll liabilities including Health Insurance, Union Fees, Superannuation and PAYG withholding to the ATO.

e)     Check the balance sheet as at 30-06-2018 to confirm all payroll liabilities have been paid.

Create and save a copy of each of these reports:

·        Payroll register (summary) report for year ended June 2018

·        Payroll activity (summary) report for year ended June 2018

·        Profit and Loss Statement for year ended June 2018

·        Payroll Summary report for year ended June 2018

·        Print the Entitlement Balance (summary) for the year ended 30 June 2018

·        Print the balance sheet for year ended 30 June 2018

·        As you need to reconcile gross wages and superannuation for the 2017/18 financial year, prepare the payment summaries for the 30 June 2018 financial year for each employee.

 

15.             Send an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

 

It should introduce and summarise the contents of the attachments and advise them of the payroll information from the reports that are to be included in the IAS and BAS The email text should also explain to your assessor at least one cause why reports might not reconcile and how to rectify this.

 

Attach the six reports and the payment summary for each employee from activity 7 to the email.

 

16.             Update records

Assume that Alice Brown has recently had a salary review and his salary has been increased to $59,500.

 

Update his records. Show your assessor that you know how to do this in MYOB.

 

17.             Establish a backup and disaster recovery system. 

Assume that you have been tasked to ensure that there is a strong back up and disaster recovery system in place. Research how to do this for MYOB and then write a simple procedure for back up and disaster recovery.

Create a new Word document and write the procedure in this. Show this to your assessor.

 

Create a backup file and store it as set out in your procedure.

Your assessor will observe you doing this.

Assessment Task 3: Payroll roleplays

Overview

For this assessment task you are required to complete two role-. You will undertake the roleplays with your assessor.

You will play the role of the payroll officer of a company called LPO Consulting and your assessor will play the other roles of the employee in each scenario.

Your assessor will use a checklist to assess your performance.

 

This assessment is to be completed in the simulated work environment in the class.

 

Required

·        Access to textbooks/other learning materials

·        Computer with Microsoft Office and internet access

·        Timesheet

 

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Instructions

Role play 1

LPO Consulting is a small company that writes educational materials for workplaces to purchase. Staff complete their timesheets on hard copy templates that have been printed out from a Word document.

The payroll process is completed using MYOB. It is part of your job to check the time sheets to ensure that the hours worked have been added up correctly.

While looking at an employee Harrison Ewbank’s Timesheet, you realise that some things do not make sense. Print out the timesheet and highlight any errors or inconsistencies you find.

Then meet with Harrison (roleplayed by your assessor) at the time and date advised.

This roleplay requires you to:

·        Liaise with Harrison and ask him to clarify the errors

·        Check that your review of the time sheet matches with what Harrison is advising

·        Demonstrate effective communication skills by speaking clearly and concisely

·        Listen carefully to ensure you get all the information you need

·        Use active listening techniques to confirm understanding

·        Ask questions if you are unsure about anything.

 

You will then need to make adjustments to the timesheet based on the information that Harrison gives you. You will need to do this within five minutes.

Submit the corrected timesheet as part of your assessment.

 

You will be assessed on all of the above.

 

Role play 2

 

Review the following excerpts from the LPO Payroll procedures:

 

Designated bank accounts

Payroll procedures for LPO is that money is always transferred into the bank account specified in the employee details within the payroll system.

Payment can be split between multiple accounts but unless employees advise the payroll officer of these details, payment will always go to the nominated account.

Where employees do advise of multiple accounts, this needs to be in writing and at least 10 days’ notice must be given.

 

Changes to salary arrangements

Where an employee requests an increase in their salary, this is a formal process to be referred to the human resources department as salary increases occur as a result of performance reviews.

Where an employee requests a salary increase, inform the employee of this information and advise them to contact the human resources department. 

 

It is 20 November and Amali, one of your colleagues, comes into your office.

She is upset as she has recently done some overtime but says the money has not been put into her account.

She was counting on the overtime to pay a credit card payment. This payment has now defaulted because the overtime money was not put into her account on time. Amali has now been hit with overdue fees.

Amalie says she wanted the overtime amount to go directly into her credit card account and is blaming you for the problem. She says that she wrote to you via email 2 days ago with the change of details.

Payroll procedures for LPO is that money is always transferred into the bank account specified in the employee details within the payroll system.

Payment can be split between multiple accounts but, unless employees advise the payroll officer of these details, payment will always go to the nominated account.

Where employees do advise of multiple accounts, this needs to be in writing and at least 10 days’ notice must be given.

Your assessor will play the role of Amali and will advise you of the date and time for the roleplay.

At the roleplay you will need to advise Amali of company procedures to explain why the payment was not directed to the account she required.

 

Assume that Amali also advises you at the same meeting that she would like a pay increase. Follow this up as set out in the company procedures and explain this procedure to Amali.