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Unit: BSBFIM502 Manage payroll

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Assessor’s Name: P. Kavanagh Date:

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 Imagine Education
Student Assessment Cover
Sheet

Course Code SIT60316 Course Name Advanced Diploma of Hospitality Management

Unit Code BSBFIM502 Unit Name Manage payroll

Due Date Assessment Name

Student No. ________________ Student Name _____________________________

Student Phone ________________ Student Email _____________________________

Student Declaration
I declare that this assessment is my own work and where my work is supported by documents from my workplace
placement/employer permission has been granted.

Note: Filling out this coversheet as part of an electronic submission and approving the above information will operate in
the same way as physically signing this cover sheet.

Student name or signature: ___________________________________________

Office Use Only

Date/s Received: ___/___/___ ___/___/___ ___/___/___

Date/s Assessed: ___/___/___ ___/___/___ ___/___/___

Result of Assessment: ___________ ___________ ___________

Entered on Training Plan Moderation Signature

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 Imagine Education

Course Code and Name: SIT60316 Advanced Diploma of Hospitality Management

Unit Code: BSBFIM502
Unit Title: Manage payroll

For this assessment you are required to answer all of the questions. You are permitted to research the
answers by reading your text book, theory notes and accessing the internet. If more room is needed
label each task with the question number and use headings or dot points to make your work clear for
your trainer and assessor.
Please follow the Referencing Guide contained on your Course handbook.
Please attach a student assessment cover sheet to each unit submission. You must complete the cover
sheet in full detail.

Part A Questions

1. What is the purpose of establishing security procedures in relation to managing payroll

information? There are three aspects of this purpose.

The crucial function of the payroll department coupled with the sensitive employee information involved
means security is a key concern. The type of information and the manner in which it is stored plays a role in
how well you keep your employees' financial information, legal issues and personal information protected.
Secure Physical Environment

The physical layout of the payroll department affects the security of the information. Any physical copies of
documents that contain personal information need to be locked up at all times. Filing cabinets with locks work
well for this purpose. Position desks so the computer screens aren't visible from the door or by those walking
nearby. Keep the doors to the payroll office locked with access only to payroll employees and authorized
management. If any documents are stored offsite, choose a location that allows you to keep the documents locked
up with access only by authorized personnel.

Limit Access

In addition to the physical precautions, a company needs to establish guidelines for access to the payroll
information. For example, individual employees are typically able to access their own records, but other
employees should not have access to colleagues' information. Determine who has access to each employee's
records and how access is handled. Bring the specific information to the employee instead of allowing him to
retrieve it. Supervision while the employee is in the payroll department is also key to maintaining security.

Establish Electronic Security

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Since the majority of payroll is handled electronically, the choice of software and the company's electronic
security is essential. Your company needs a firewall to protect your computer systems and databases. Password
protection on all computer stations provides further electronic protection. Work with the information technology
department or with an independent consultant to upgrade your security, and conduct regular checks to ensure
the system works properly.

Standardize External Requests

External inquiries for payroll information leave you open to a potential breach. While creditors, mortgage
companies and other entities with a financial interest may contact you, there is no way to verify who is actually on
the other end of the line. You may get calls seeking to verify income for an employee or from creditors who want
to garnish wages. Create a standard system for inquiring about this information in writing. In the case of a
garnishment, the proper legal channels need to be followed. Train all payroll employees on the proper procedures
for releasing any personal information about employees.

Properly Handle Disposal

A smaller amount of documents and information on hand means less possibility for a security breach. When
possible, limit the number of items kept unless needed for tax or auditing reasons. When you do get rid of
documents, proper disposal is essential. Establish guidelines for handling sensitive documents, which should
include secure shredding of the materials.

2. Claims for allowances require substantiation documentation. Explain how substantiation

procedures guarantee that an employee’s claim for an allowance is substantiated?

3. Identify three (3) different records relating to managing payroll that an organisation is required
to keep for employees and the minimum period that these records must be kept?

1. Personnel Files of Employee Records

2. Payroll Files of Employee Records
3. Medical Files of Employee Records

4. List the key items that are required in order to calculate an employee’s gross pay and where you
would obtain the required information.
1. employee's annual salary
2. any other payments that the employee received
3. Subtract any unpaid time off

5. Identify two (2) statutory deductions that can apply to a wage or salary earner and provide a
brief description of each including how the amount of each deduction would be calculated and
determined.
1. Income Tax (PAYE);
2. Pension Related Deduction (Pen Rel Ded),

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 6. Describe your current job and provide two (2) allowable tax deductions that you could claim to
reduce your overall taxable income. Justify the deductions.
My current jobs is accountant job and the allowable deduction in my taxation are provident
funds and advance tax.
7. Explain three (3) checks that an organisation can perform when reconciling payroll.

1. Reconciling Against Budget

2. Earnings and Payroll Registers
3. Validating Transactions

8. Explain the purpose of a Tax File Number (TFN) declaration and the time lines for completion and
lodgement with the Australian Taxation Office (ATO).
A TFN declaration applies to payments made after the declaration is provided to you. The
information provided on this form is used to determine the amount of tax to be withheld from
payments based on the PAYG withholding tax tables we publish. ... withhold the top rate
of tax from any payment to that payee.

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 9. Log onto the Office of State Revenue Queensland website (www.osr.qld.gov.au) and answer the
following questions relating to payroll tax as a business.

i. What is payroll tax and when does a business need to register?

The taxes you must register for depend on the type of business you're starting. Some tax registrations
apply to all businesses and others may be compulsory depending on your business' size and type. Some
registrations are entirely optional
ii. What is the current payroll tax exemption yearly threshold?
When an employee is exempt from a certain payroll tax, depending on the situation, you or the employee is
responsible for ensuring proper withholding. Exempt means that you don't take the tax out of her wages. To
qualify as exempt, she must meet federal and applicable state and local guidelines. The threshold for exempt
depends on the type of tax.
Federal Income Tax

As of 2013, an employee is exempt from federal income tax if, in the last year, she had a right to all of her federal
income tax withheld because she didn't owe any tax, and if in the current year she anticipates a full refund
because she doesn't foresee owing any tax. She can't claim exempt if her annual income is more than $1,000 and
includes over $350 in unearned income, such as dividends, rental income and taxable interest. She also cannot
claim exempt if someone else can claim her as a dependent on his tax return. The employee is responsible for
filling out the W-4 correctly. If she erroneously claimed exempt on line 7 of the form, which caused you to not
withhold federal income tax, the IRS may send you a lock-in letter to change her withholding to the correct
amount.

Medicare Tax

You must withhold Medicare tax from your employees’ taxable wages at 1.45 percent as of 2013. An additional
Medicare tax of 0.9 percent applies to individual filers who earn more than $200,000 for the year and joint filers
who earn more than $250,000. You must withhold the additional tax from all employees who earn more than
$200,000 for the year, regardless of their filing status. If the employee might owe more taxes than what you
withheld due to self-employment income or her filing status or wages, she may request that you withhold
additional taxes on line 6 of her W-4; otherwise, she must make estimated tax payments directly to the IRS.
Employees who earn below the annual threshold are exempt from additional Medicare tax.

Social Security Tax

Deduct Social Security tax from your employees’ taxable wages at 6.2 percent, up to the annual threshold of
$113,700, as of 2013. Once an employee satisfies the yearly wage limit, she is exempt from Social Security tax
until the start of the next year.

State and Local Income Tax

The threshold for exemption from state and local income tax, respectively, varies by state and local municipality.
The state and local government may have its own form on which your employees may claim exempt. In some
cases, an employee may use her W-4 form to claim exempt from state income tax, or her state tax form to claim
exempt from local income tax. Typically, an employee must not have owed any state income tax in the past year

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 and should not anticipate owing any in the current year to qualify for exemption from state income tax. Specific
rules may apply to active-duty military employees.

iii. What is the current payroll tax rate?

The current tax-free threshold for resident individuals is $18,200, and the highest marginal rate for
individuals is 45%. In addition, most Australians are liable to pay the Medicare levy, of which the
standard is 2% of taxable income.
iv. How often does a business have to lodge a return for payroll tax?

If you are an employer you may have a payroll tax obligation.

Payroll tax is a state and territory tax on the wages you pay as an employer. It's calculated on the amount of
wages you pay each month and payable in the state or territory of Australia where the services were
performed.
Wages liable for payroll tax include:

 Employee wages

 Contractor payments

 Directors' remuneration

 Superannuation

 Allowances

 Fringe benefits

 Bonuses and commissions

 Termination payments

v. When is the return due after the end of the return period?
Tax returns cover the financial year from 1 July to 30 June. If you’re lodging your own tax return
it is due by 31 October.
Lodging with myTax
MyTax is the quick, easy, safe and secure way to lodge your tax return online. It's web-based, so
you don't need to download anything. You can lodge on a range of devices – computer, smartphone or
tablet – just make sure to lodge by the 31 October deadline. To lodge online you need a myGov account
linked to the ATO. MyTax is available to all individuals completing their own return (including sole
traders).
vi. Using the information you have just found on the website, calculate the payroll tax
payable for a Queensland business that has a total payroll of $1 million.

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 Threshold

Financial year

Weekly Monthly Yearly

2012-13 to 2018-19 $21,153 $91,666 $1,100,000

2008-09 to 2011-12 $19,230 $83,333 $1,000,000

10. Provide an explanation of the following terminology and also the importance of each in the
management of a payroll system:

i. Fringe Benefits Tax (FBT)

Fringe Benefits Tax (FBT) is a tax payable by employers for benefits paid to an employee (or an
employee's associate e.g. a family member) in place of salary or wages. This is separate to income
tax and is calculated on the taxable value of thefringe benefits provided.
ii. Higher Education Contribution Scheme (HECS)

Australian citizens (and in some cases overseas professionals completing bridging studies in order to be
accredited permanent residents) are able to obtain interest free loans from the government under
the Higher Education Loan Programme (HELP) which replaced the Higher Education Contribution
Scheme (HECS)
iii. Superannuation

A superannuation is an organizational pension program created by a company for the benefit of its
employees. It is also referred to as a company pension plan. Funds deposited in a superannuation
account will grow, typically without any tax implications, until retirement or withdrawal.
iv. Pay As You Go Tax (PAYG)

Pay as you go (PAYG) instalments is a system for making regular paymentstowards your expected
annual income tax liability. It only applies to you if you earn business and/or investment income over a
certain amount
v. Medicare Levy
Medicare levy. Medicare gives Australian residents access to health care. It is partly funded by taxpayers who pay
a Medicare levy of 2% of their taxable income. Your Medicare levy is reduced if your taxable income is below a
certain threshold. In some cases you may not have to pay the levy at all.

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 11. For each of the following pieces of legislation or codes of practice describe why each is relevant
to the management of a payroll system:

i. Anti –discrimination Laws

The Racial Discrimination Act 1975 was the first major anti-discrimination legislation passed in
Australia, aimed at prohibiting discrimination based on race, ethnicity, or national origin
ii. Ethical principals

The five main principles of ethics are usually considered to

be: Truthfulness andconfidentiality. Autonomy and informed consent. Beneficence.
iii. Australian Accounting and Auditing Standards code of practice

Australian Accounting Standards Board is based on Developing, issuing and maintaining Australian
Accounting Standards and related pronouncements
iv. Superannuation Guarantee (Administration) Act

Superannuation Guarantee (SG) The Superannuation Guarantee(Administration) Act 1992 (SGAA)

was introduced by the Government on 1 July 1992 to ensure that most employees
receive superannuation support from their employer
v. Privacy laws
Privacy law. Privacy law refers to the laws that deal with the regulating, storing,and using of personally
identifiable information of individuals, which can be collected by governments, public or private
organizations, or other individuals.

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 Part B Case Study

1. Case study – a Payroll Manager of a private school in Sydney used five employee codes of past
employees to create fake teachers and had money transferred to her bank account. This
occurred over a period of six years and amounted to over $1 million dollars being stolen from the
school.

Explain five (5) security procedures and control measures that the school could implement to
prevent this from occurring again.

1. Identify your sensitive data, including your product research, intellectual property, financial
statements, customer information, and employee information. This will be the data you will need to
focus your resources on protecting.
2. Identify possible threats. For each category of information that you deem sensitive, you should
identify what kinds of threats are present. While you should be wary of third parties trying to steal
your information, you should also watch out for insider threats, such as negligent employees and
disgruntled workers.
3. Analyze security holes and other vulnerabilities. Assess your current safeguards and determine
what, if any, loopholes or weaknesses exist that may be exploited to gain access to your sensitive
data.
4. Appraise the level of risk associated with each vulnerability. Rank your vulnerabilities using
factors such as the likelihood of an attack happening, the extent of damage that you would suffer,
and the amount of work and time you would need to recover. The more likely and damaging an
attack is, the more you should prioritize mitigating the associated risk.
5. Get countermeasures in place. The last step of operational security is to create and implement a
plan to eliminate threats and mitigate risks. This could include updating your hardware, creating
new policies regarding sensitive data, or training employees on sound security practices and
company policies. Countermeasures should be straightforward and simple. Employees should be
able to implement the measures required on their part with or without additional training.

control measures

1. Assess the likelihood of the risk associated with the hazard causing injury or illness: Is an
accident or incident likely to result from the risk?
2. Investigate the degree of harm that would result if the hazard or risk of the hazard
eventuated: Would an accident or incident result in serious harm or even death?
3. Ask what the relevant workers know about the hazard or risk, and any ways of eliminating or
reducing the hazard or risk: Have you gathered information about the risk and possible ways
of reducing or eliminating it?
4. Evaluate the availability and suitability of ways to eliminate or reduce the hazard or risk: Are
appropriate remedial measures available on the market, or could they be manufactured or
designed? Is there a different work process that could be adopted? (Use the hierarchy of
control for this.)
5. Balance the factors above with the cost of eliminating or reducing the hazard or risk.

2. Scenario – Brett Symthe is a carpenter. He must provide his own tools of trade and had to
purchase an electric drill for use at work. He bought a Makita electric drill for $880 including
GST.
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 Brett bought the drill on the 21st of June 2013 from Bunnings, ABN 33 987 223 120, 5 Nerang
Street, Nerang Qld 4211. He lives at 33 Moore Parade, Southport Qld 4215.

For tax purposes, Brett must keep a tax invoice to substantiate his claims.

Create a tax invoice that Brett could use to claim this purchase in his next tax return.

= 880*15% = 132

3. Scenario – Brett uses his own utility (Volkswagen Transporter, registration IDX 812) for work and
is able to claim the kilometres travelled as an allowable deduction. Details of his working week
are:

Details Odometer reading

Monday, 18th June 2012 – worked on erecting frame on new house 33,345 to 33,375

Tuesday, 19th June 2012 – erecting roof on house 33,412 to 33,442

Wednesday, 20th June 2012 – worked on new kitchen cupboards in western suburbs 33,501 to 33,565

Thursday, 21st June 2012 – cupboards at same house completed 33,610 to 33,669

Friday, 22nd June 2012 – repairs to offices in city 33,680 to 33,725

Brett has completed his logbook below for business travel. He has made three (3) errors. Find
and correct the discrepancies.
Car make Volkswagen Model Transporter Registration number IDX 812
Date trip Date trip Odometer Odometer Business Purpose of Name of
Signature
commenced ended at start at finish km trip driver
18/6/12 18/6/12 33,345 33,375 25 Framing Brett Brett

19/6/12 19/6/12 33,412 33,442 30 Roof Brett Brett

20/6/12 20/6/12 33,501 33,585 64 Cupboards Brett Brett

21/6/12 21/6/12 33,610 33,669 59 Cupboards Brett Brett

22/6/12 22/6/12 33,680 33,725 45 Cupboards Brett Brett

Part C Project

Scenario: You are the Payroll Officer for ABC Fast Foods, a fast food restaurant. Details of the business
are below.
Business details
Address: Shop 5, Australia Fair Shopping Centre,
42 Marine Parade, Southport Qld 4215.
ABN: 12 345 678 910
Withholding payee number: 104
Employer name: ABC Fast Foods
Contact: Your name and mobile phone number
Opening hours
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Mon – Wed/Fri/Sat 9:00am – 17:30pm
Thur 9:00am – 21:00pm
Sun 10:30am – 16:00pm

1. As the Payroll Officer you have been asked to develop a set of policies and procedures for managing
payroll based on the following six (6) points. Include at least three (3) procedures for each point.
Follow the layout instructions below when creating the policies and procedures.

Layout instructions:

 Include a title for your policies and procedures.

 Include a short policy statement of 3 to 5 lines to clarify the intent of the policy and highlight the
commitment of the organisation relating to the policy.
 Include a header on each page with your name and student number.
 Number each policy point (1, 2, 3, 4, 5 & 6) and include an appropriate heading at the start of
each section.
 Include a minimum of three (3) procedures for each policy and ensure they are written as
complete sentences (not in point form).
 Type the report using a computer and print on clean white paper in 12 point Times New Roman
or Arial font.

i. Security to ensure the confidentiality and security of payroll information.

ii. Substantiation of claims for allowances.
iii. Control measures to safeguard the organisation`s financial resources in accordance with
legislative and organisational requirements.
iv. Checking of payroll and authorisation of salaries and wages for payment.
v. Reconciliation of salaries, wages and deductions.
vi. Employee enquiries related to salaries and wages.

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 SOP

1. Pay Periods are every two weeks. All pay checks for two-week pay periods will be
distributed within five working days after the last working day of the pay period.
Paychecks are directly deposited into individual employee checking or savings
accounts.

2. General Policies:

a. All employees of ______ are required to submit a time sheet, which must be
received by the Office Coordinator, by Monday at 10 A.M. following the end of
the pay period.

b. All additions or changes in payroll must be done on the “Employee Data Form”,
signed by the employee and submitted to the Executive Director for signature
and filing in the personnel file. The employee must sign for all changes. This
form is used for all individualized changes to an employee’s status including
salary or wage, job title, working status, address, name or fringe benefits.

c. No advances on salaries or loans to employees will be made. Discrepancies will

be resolved using the regular employee grievance procedure as described in
______’s personnel policies and procedures.

d. Payment to all employees will be based on the approved time sheets.

e. Payroll checks will be direct deposited to employees. Check stubs will be

available within 7 (seven) working days. Employee’s checks will not be given to
anyone except the employee, unless a written consent has been sent to the
Executive Director in advance of the payroll. Note: (The Executive Director
cannot accept verbal permission to distribute an employee’s paycheck to
another party).

f. A new employee will not be put on payroll without the Employee Data Form
signed by the Executive Director and a W-4 Form and an I-9 Form.

g. All payroll will be done on a computerized system. Currently, ______ payroll is

done by _________ Payroll Service.

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3. Procedures:

a. Each employee will complete and submit a signed individual time sheet showing
hours worked, sick time, vacation time and holiday time taken.

b. Each supervisor will review for accuracy and sign time sheets. All time sheets
are to be sent to the Executive Director for approval and signature.

c. If an employee has not yet enrolled for direct deposit, the payroll check will be
distributed to the employee normally, no earlier than 4 P.M. the fifth (5TH)
workday following the close of the pay period.

d. Payroll deductions will be made for F.I.C.A., Federal and State Income Taxes,
applicable health benefits and any other amounts required by State or Federal
law. These accumulated deductions will be submitted to the proper entity on
or before their due date.

e. An accounting of deductions will be given to the employee as part of the payroll

documentation. Staff are instructed to verify that the deductions are correct
and maintain their pay stubs.

2. As the Payroll Officer one of your duties is to manage the weekly pays for the staff. The current
date is the 16th of July 2014 and you must calculate the pays for the week prior. Currently there are
five (5) existing employees employed under the following conditions:

Employee details
Employee #1 Employee #2 Employee #3

Mr John Ryan Mrs Janice Wright Mr Robert Jones

TFN: 789 101 234 TFN: 456 789 101 TFN: 567 891 012

DOB: 19/2/1980 DOB: 2/3/1982 DOB: 23/1/1987

Employment status: Full-time manager Employment status: Full-time Employment status: Casual attendant
in charge of all staff supervisor

(Gr 2)

Employee #4 Employee #5

Miss Mary Jacobs Miss Rebecca Wong

TFN: 345 678 910 TFN: 912 345 789

DOB: 2/8/1995 DOB: 20/6/2000

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 Employment status: Casual attendant Employment status: Casual attendant

Roster details for the week Monday 8th July – Sunday 14th July 2013
Mr John Ryan Mrs Janice Wright Mr Robert Jones

Wed/Fri 9:00am – 17:30pm Mon/Tue/Wed/Fri 9:00am- 17.30pm Mon/Tue 9:00am – 17:30pm

Thu 9:00am – 21:00pm Sat 11:00am – 17:30pm Sat 9:00am – 17:30pm

Sat 9:00am – 17:30pm Sun 11:00am – 14:00pm

Sun 10:30am – 16:00pm

Miss Mary Jacobs Miss Rebecca Wong

Wed/Fri 9:00am – 17:30pm Thu 9:00am – 16:00pm

Thu 16:00pm – 21:00pm Sat 11:00am – 15:00pm

Sat 9:00am – 14:00pm

Sun 10:30am – 16:00pm

*Note that an unpaid 30 minute meal break is given for staff who work between 5 and 9 hours and two
unpaid 30 minute meal breaks if they work over 9 hours. All staffs are required to wear the uniform and
are given a laundry allowance.

i. Research the modern award for the Fast Food Industry (MA000003) and calculate the gross
pay for all five (5) employees as per the roster for the period 8th – 14th July 2014. You must
use the ‘Manage Payroll calculating pays template’ to show your understanding and
interpretation of a Modern Award, as well as your calculations.

ii. Using the current weekly tax tables (NAT1005) calculate the applicable tax for all five (5)
employees.

iii. Complete the payslip below for Mrs Janice Wright (employee #2) only.

ABC Fast Foods Pty Ltd pay advice slip

Employers ABN:

Employee no: Date of payment: Pay period ending:

Employee’s name:Janice Wright

Employment status:FT Supervisor C2

Wages, allowances and overtime Hours Rate Amount

Wages Standard hours 10 30 300

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Wages Overtime rate Sat 5 40 200

Wages Overtime rate 2 0 0 0

Allowance 1 Laundry 1 8 8

Allowance 2

Public Holidays

Gross pay 508

PAYG tax @ Nil

Net pay 508

Superannuation guarantee levy

iv. Complete a TFN declaration form for the following new employee.

 TFN: 100 489 128

 Name: Ms Jennifer Brown
 DOB: 5/6/1988
 Address: 10 James St, Burleigh Q 4220
 Employment status: Casual

v. Prepare the Employee Summary (Group Certificate) for the previous financial year for Mrs
Janice Wright (employee #1). Assume that Janice worked the same shifts every week during
the last financial year.

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 vi. Complete a Business Activity Statement (BAS) based on the following details:

 Collected $15000 in GST (1A on the BAS)

 Paid $9500 in GST (1B on the BAS)

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  Withheld $6500 in PAYG withholdings tax on staff wages (4 on the BAS)
 PAYG Income Tax Installments are $2300 (5A on the BAS)
 Complete 8A and 8B then work out if you have a payment or refund

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