A Step by Step Approach to Establish and Maintain a Payroll System using MYOB AccountRight Plus v19 Copyright Notice: Copyright 2011 Software Publications Pty Ltd. All rights reserved. No part of this material may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying or by information retrieval systems) without permission in writing from Software Publications Originating Author: Marian Brown, Dip Teach [Commerce], MICB BAS Agent Cert IV Training and Assessment, Cert IV in Financial Services [Bookkeeping] MYOB Certified Consultant for 16 years MYOB Accredited Author, MYOB Publisher, MYOB Accredited Trainer Revised by: Leanne Berry, MICB Cert IV Workplace Training and Assessment, Cert IV in Small Business Management, Cert IV in Frontline Management, Cert II in Quality Management MYOB Certified Consultant for 6 years MYOB Accredited Trainer, Member MYOB Partner Advisory Group BAS Agent The Numbers Game leanne@thenumbersgame.com.au www.thenumbersgame.com.au Publishers: Software Publications Pty Ltd [ABN 75 078 026 150] Head Office Sydney Unit 10, 171 Gibbes Street Chatswood NSW 2067 Phone: 1 800 146 542 Web address: www.softwarepublications.com.au ISBN 978-1-921885-41-9 3rd Edition Revised April 2011 FNSBKPG405A Establish and maintain a payroll system Copyright 2011 Software Publications Pty Ltd FNSBKPG405A Establish and Maintain a Payroll System v19 i
Copyright/Trademark Information: MYOB, MYOB AccountEdge, MYOB AccountRight, MYOB AccountRight Plus, MYOB BusinessBasics, MYOB FirstEdge, MYOB M-Powered, MYOB M-Powered Services, MYOB M- Powered Bank Statements, MYOB M-Powered Invoices, MYOB M-Powered Payments, MYOB ODBC Direct, MYOB PowerPay, MYOB AccountRight Premier and MYOB AccountRight Enterprise are registered trademarks or trademarks of MYOB Technology Pty Ltd and their use is prohibited without prior consent. Ceedata, Solution 6 MAS and Xlon are registered trademarks or trademarks of Solution 6 Holdings Limited, a member of the MYOB group. Bpay is a registered trademark of Bpay Pty Ltd, ABN 69 079 137 518. MasterCard is a registered trademark of MasterCard International Inc. Microsoft, Access, Excel, Internet Explorer, Office, Outlook, Smart Tags, Windows and Word are registered trademarks or trademarks of Microsoft Corporation in the United States or other countries. VISA is a registered trademark of Visa International Service Association. Other products mentioned may be service marks, trademarks or registered trademarks of their respective owners. Screen captures from MYOB AccountRight Plus v19 reproduced with permission. Limitations of Liability: This material is designed to provide basic information on how to use MYOB AccountRight/AccountRight Plus v19. Because business circumstances can vary greatly, the material is not designed to provide specific GST or business advice for particular circumstances. Also, because aspects of the GST are complex and detailed, the material is not designed to comprehensively cover all aspects of the GST. Further, the laws implementing GST and rulings and decisions under those laws may change. Before you rely on this material for any important matter for your business, you should make your own enquiries about whether the material is relevant and still current, and whether it deals accurately and completely with that particular matter; and as appropriate, seek your own professional advice relevant to that particular matter. This information is for the general information of MYOB clients and is not to be taken as a substitute for specific advice. Consequently Software Publications Pty Ltd, Leanne Berry and Marian Brown will accept no responsibility to any person who acts on information herein without consultation with Software Publications Pty Ltd. The information in this book is relevant to MYOB AccountRight Plus v19. Earlier or later versions of MYOB AccountRight software could change the instructions in this workbook. References to websites may also change owing to the changing nature of this type of information. Please note: The information in this workbook is accurate at the time of printing [April 2011] only. Because payroll legislation and associated websites are constantly changing, URL S and screen dumps of websites in this workbook may have changed. ii FNSBKPG405A Establish and Maintain a Payroll System v19 Copyright 2011 Software Publications Pty Ltd
Unit 2 Payroll Legislation and Requirements Over the last ten years, Australian workers and Australian businesses have started to change the way they work. As a result, the Australian Government has moved towards one, simpler national workplace relations system legislated by the Fair Work Act 2009 which incorporates elements such as a fair and comprehensive safety net of minimum employment conditions referred to as the National Employment Standards. From January 2010 further changes under the FAIR WORK ACT have been implemented. The purpose of this workbook is to introduce the learner to the basics of payroll to enable the user to process payroll within the changing Workplace Relations framework. MYOB AccountRight Plus v19 is just one software package which enables a business to process the payroll and print required reports. Payroll is integrated into MYOB AccountRight Plus v19 through the Payroll Command Centre. The MYOB Payroll Command Centre can take care of the following: handles hourly or salaried earnings or a mix of both; automatically calculates PAYG tax; handles special pay situations such as time and a half; calculates and tracks sick and holiday leave entitlements; flexible calculation rules mean you can exempt pay items from PAYG calculations; automatically calculates Compulsory Government Superannuation Guarantee; handles employee contributed superannuation; handles different pay periods in the same company - weekly, fortnightly, monthly; prints and emails Pay Advice Slips; prints Payment Summaries; creates Electronic Funds Transfer file to pay employees by direct depositing their bank accounts; absolute security via completely flexible passwords; and extensive Payroll Reports are available. Being integrated means all transactions entered in the Payroll instantly update all other relevant parts of MYOB. Software Publications Pty Ltd 2011 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 9
Printed below is a sample Payroll Summary screen. Tax and Deductions Wages paid to Lorry Watts Net Wages Entitlements Superannuation The PAYROLL for each employee consists of the following parts see above. 1. Wages Includes all moneys paid to an employee: salary hourly wage bonus commission holiday pay personal leave overtime meal allowance car allowance and many more PAYG tax deducted based on the employee s Gross Wages and Tax 2. Taxes Scale. Includes all moneys deducted from gross wages and paid on behalf of the employees: 3. Other Deductions Donations Social Club contribution 4. Net Wage Gross Wage - (Tax + Deductions) 5. Employer Expenses 6. Superannuation 7. Entitlements Expenses paid by the Employer in relation to the employee s wage Superannuation Expenses such as: Award Superannuation Employee contributions Salary Sacrifice Employer Additional Days the employee accrues under the terms of awards/work agreements: Annual Leave Personal Leave Rostered Days Off Accrued Days Off Long Service Leave 10 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 2011 Software Publications Pty Ltd
@ Accessing Payroll Information @ Go to http://www.fairwork.gov.au/pages/default.aspx to access a great deal of payroll information that you need when processing pays (i) A number of templates are available from the Resources tab. Listed below are some of the templates available. (ii) If you have access to the internet, download the Self-audit check list. Software Publications Pty Ltd 2011 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 11
An excerpt is reproduced below. Self-audit check list @ Record Keeping Requirements @ Go to www.fairwork.gov.au. Under the Resources tab, select Fact Sheets. Download the Employee records and pay slips Fact Sheet. Printed on the following page is a list of records for each employee which must be kept, reproduced from this fact sheet, so that you can check the business is complying with the Fair Work Act 2009 and Fair Work Regulations 2009 legislation. 12 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 2011 Software Publications Pty Ltd
List of RECORD-KEEPING REQUIREMENTS General employment records must include all of the following: the employer s name the employer s Australian Business Number (ABN) (if any) the employee s name the employee s commencement date the basis of the employee s employment (full or part-time and permanent, temporary or casual). Records of pay must include all of the following: the rate of pay paid to the employee the gross and net amounts paid and any deductions from the gross amount the details of any incentive-based payment, bonus, loading, penalty rate, or other monetary allowance or separately identifiable entitlement paid. Records relating to hours worked by employees are to include the following: In the case of a casual or irregular part-time employee who is guaranteed a pay rate set by reference to time worked, a record of the hours worked by that employee For any other type of employee, the record must specify the number of overtime hours worked each day, or when the employee started and finished working overtime hours (but only if a penalty rate or loading must be paid for overtime hours actually worked) A copy of the written agreement if the employer and employee have agreed to an averaging of the employee s work hours. If an employee is entitled to leave, the record must include both: leave taken, if any the balance of the employee s entitlement to that leave from time to time. If an employer and employee have agreed to cash out an accrued amount of leave, the employer must keep both: a copy of the agreement to cash out the amount of leave a record of the rate of payment for the amount of leave cashed out and when the payment was made. If the employer is required to make superannuation contributions for the benefit of the employee, the record must include all of the following: the amount of the contributions made the dates on which each contribution was made the period over which the contributions were made the name of any fund to which a contribution was made the basis on which the employer became liable to make the contribution, including a record of any election made by the employee (including the date) to have their superannuation contributions paid into a particular fund. If an employer and employee agree in writing to an individual flexibility arrangement in relation to a modern award or enterprise agreement, a record must include both: a copy of the agreement a copy of any notice or agreement terminating the flexibility arrangement. If an employer gives a guarantee of annual earnings under the Fair Work Act 2009, the employer must make and keep a record of: the guarantee the date of any revocation of the guarantee (where applicable). Where the employment has been terminated, the records must include both: whether the employment was terminated by consent, by notice, summarily, or in some other manner (specifying that manner) the name of the person who terminated the employment. Software Publications Pty Ltd 2011 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 13
List of RECORD-KEEPING REQUIREMENTS (cont.) Where there has been a transfer of business under the Fair Work Act 2009, at the time of transfer, the old employer is required to transfer to the new employer each employee record concerning a transferring employee. If the transferring employee becomes an employee of the new employer after the transfer, the new employer must ask the old employer to provide them with the employee s records. The old employer must give the records to the new employer. Employers must keep these records for each worker for a minimum of seven years. The records should be in plain English and in a legible form that is readily accessible to a Fair Work Inspector. Summary of Employer Obligations - payroll As an employer, the business has certain obligations: 1 Legal obligations - pay correct wages and issue all new employees a Fair Work Statement [see Pages 16 to 18 and Unit 3] 2 Paperwork - keep detailed time and wages records [see Pages 13 to 14]; 3 Staff Health & Safety - [see Page 21]; 4 Superannuation obligations contact Super Funds and register as an Employer and also register employees [superannuation covered throughout this workbook]; and 5 Insurance obligations Workers Compensation and Public Liability needs to be arranged. 6 Taxation obligations - as part of payroll, the business will be required to withhold part of the employees wages as PAYG-W [Pay As You Go] Withholding {Income Tax} and send the amount to the Australian Taxation Office. Some businesses may also be required to pay State Payroll Tax to the respective Office of State Revenue. The business will therefore have to register [Go to www.business.gov.au and select Taxation.] see details on the following page. 14 Unit 2: Payroll Legislation/Requirements FNSBKPG405A Establish and Maintain a Payroll System v19 2011 Software Publications Pty Ltd