Payroll Processing Term Paper
Content
DATA BASE MANAGEMENT SYSTEM
TERM PAPER
SUBMITTED TO PROF.SARTAJ SINGH
SUBMITTED BY Manpreet singh Roll no E3004A84 ClassM.C.A(1STSEM)
ACNOWLEDGEMENT
I would like to express my gratitude to all those who gave me helping hand incompleting this term paper. I want to thank my teacher MR.SARTAJ SINGH for helping me whenever I needed it the most. My friends have also supported me in my work. I want to thank them all for their help, support, interest and valuable hints.
INDEX
SRNO 1. 2. 3. 4. 5. 6. 7. 8. 9. CONTENTS Introduction Payroll administration Manual system Payroll system Objective of payroll Advantage of payroll process Example of an organization Flow chart ER Diagram PAGENO 4 5 6 7 7 8 8 14 17
PAYROLL PROCESSING
INTRODUCTION
Payroll is defined as a method of administrating employees salaries in the organizations. The term 'payroll' encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. All of these different payment methods are calculated by a payroll specialist and the appropriate paychecks are issued. The process consists of calculation of salaries and tax deductions of the employees, administrating the retirement benefits and disbursements of salaries to employees. It can also be called as an accounts activity, which undertakes the salary administration of employees in the organization. It identifies risks such as entering incorrect.employee information into the system and making unauthorized adjustments to employee hours. Administrating the employees’ salaries is not an easy task, the HR and accounts department work together to calculate and disburse the salary to the employees. Thus, payroll management can be further subdivided into two sub processes, i.e. Payroll accounting and payroll administration PAYROLL ACCOUNTING: Payroll accounting involves calculations of employees’ salaries and tax deductions. It also undertakes the activities such as preparation of tax returns, maintaining the payroll records, etc. Payroll accounting includes reporting of payroll, fringe benefits, and the payroll-related accounts of a typical company on its income statement and balance sheet. Payroll and benefits include items such as: Salaries Wages bonuses & commissions to employees overtime pay payroll taxes and costsPAY Social Security Medicare
federal income tax state income tax state unemployment tax federal unemployment tax worker compensation insurance employer paid benefits holidays vacations sick days insurance (health, dental, vision, life, disability) retirement plans profit-sharing plans Many of these items are subject to state and federal laws; some involve labor contracts or company policies. PAYROLL ADMINISTRATION: Payroll administration encompasses all the tasks involved in paying an organization’s employees. It typically involves keeping track of hours worked and ensuring that employees receive the appropriate amount of pay. It also includes calculating taxes and social security as well as ensuring that they are properly withheld and processed. Depending on the company in question, a full range of other deductions may be calculated, withheld, and processed as part of payroll administration. Additionally, the processing of contractor payments may fall under the umbrella of payroll administration. Handling payroll-related problems are part of payroll administration as well. If an employee is paid an incorrect amount or a direct deposit fails to go through, both things are payroll administration issues. Likewise tax filing and deduction errors are payroll administration matters as well. Payroll administration is an important task which most companies and business establishments find it difficult to cope with. To efficiently perform this task, it requires tedious paper work, records maintenance, salary and loan administration, providing up-to-date information to employees, superannuation, tax compliance, deductions, reimbursements, and so on
calculation of gross salaries and deductible amounts is a tedious task which involves risk. Some of the organizations use the traditional manual method of payroll processing and some go for the advanced payroll processing software. An organization opts for any of the following payroll processing methods available. Manual System Manual payroll system is the traditional payroll system which involves pen and ink, adding machine, spreadsheet, etc instead of computers, software and other computerized aids. The process was very popular when there were no computerized means for payroll processing Now-a-days it is only few small scale organizations in the remote areas that use the manual payroll. Sometimes the construction industry and manufacturing industry also use the manual payroll systems for the contractual labour, consuming as and theses risky contracts as it are is on more daily/weekly prone to basis. errors. There is full control in the hands of owner. But the process is tedious, time
Figure: Various Payroll Processes
Accountant Accountant is a professional having a degree/diploma course in finance/accountancy. He/she is responsible for all the activities related to payroll accounting. He/she has the sound knowledge of accounting principles and globally accepted standard The process adds costs to the organization. It involves paying someone who is responsible for calculating the salaries of others. The financial control regarding salary goes in Payroll Software In today’s computerized environment, payroll system has also developed itself into automated software that performs every action needed by the payroll process. It the hand of accountant.
helps in calculating the payable amounts and deductions very easily. It also helps in generating the pay slips in lesser time. Automated calculations result in no errors. Data is validated automatically by the software. It needs professionals to make use of the software for its efficient working. Payroll Outsourcing Payroll outsourcing involves a third party (an outsourcing company) in the calculations of salaries and deductions. The outsourcing organization is responsible for all the activities of the payroll accounting. It saves time and cost for the organization. If there is more number of employees (say more than 900-1000) in the organization, payroll outsourcing would be very much.
Objective of payroll processing:
To speed up the task of maintaining employee records,such as their personal information ,their job profile and the salary thereof, by computerizing the whole scenario so that the task can be performed in a better ,efficient an cost effective manner. To facilitate easy and user friendly interface for entry of records pertaining to employees as well as for generation of payslips thereof . To facilitate maintaince of proper record of attendance for each and every employee so that appropriate reports could be generated as and when required for the ease of higher authorities. To provide an automated system of payslip generation, so that useful reports grouped according to employees or month could be generated out of the system. To sum up the the objective of building this project is to avoid the unnecessary wastage of time and money that is caused due to manual procedure that was being followed for maintaining the records of employees and salary information in organization.
Advantages of pay roll processing:
Un-authorized access:
In computer system we have a password
facility,so no body can access our data.
Data consistency: It computerized system data is consistent because it
cannot be changed by anyone.
Easy to access data: It can be accessed in this system as it is arranged in
proper table.
Reduce human effort: By use of packages large amount of human effort is
saved.
High speed: as the computer can perform all function so the speed is vary
high.
Accuracy: As all the work is done on computer,so data is very accurate. Time saved: Computer is vary fast processinh device.so working on it save
time.
Query services: The same reports in the proposed system give the
information regarding the query to user.
Removing data redundancy: Here delicacy is not a wise and store
Example of an organization : In an organization there is need to maintain the all
records of employee personal record, attendance records, leaves records, overtime records, salary maintain with all options.
Table Name: personal_info
Primary Key: - employee_id Foreign key: - NILL
Purpose: - This table contains the personal information of the employee.
Table Name: department_info
Primary Key: - dept_id Foreign key: - employee_id references personal_info(emp_id)
Purpose:employee.
This table contains the department information of the
Table Name: salary_deduction
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the deductions the employee.
Table Name: salary
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose: - This table contains the salary details.
Table Name: allowances
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the allowances of the employee.
Table Name: attendance
Primary Key: - emp_id and day Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the attendance record of the employee.
FLOW CHART
Add new employee
Employee code and pf code generated
Name, father name, DOB etc
Age calculated
,file etc.
Add, contact no, basic pay no, pan no, date of joining
Date of retirement calculated
Allowance
Saved in “personal_info”
Do u want to add more or not
Emp salary
salary
Return
Is employee On probotion
Employee detail from “personal_info”
Employee detail,from”persona l_info” and allowance
Input deduction amounts
Salary calculated
Saved in salary
RETURN
Employee leave Leave
Employee name,father name,department,designatio n,from”personal _info” ,total Saved in “employee leave,leaves taken uo to leaves” previous month from
Leave taken
Calculate leaves
return
ER DIAGRAM
Designation department allowance deduction
code
Prov.fund Input, basic salry Salary calc. Income tax Pf_loa incre n ment Pf increment salary loan
Old detail
Promo ted emp
emp Advance granted
Database
Over time
For
advance
code mon th pay men t c.lea ve
payroll
labour nam e addr ess cont act salar y
city Salary(probated employees)
TERM PAPER
SUBMITTED TO PROF.SARTAJ SINGH
SUBMITTED BY Manpreet singh Roll no E3004A84 ClassM.C.A(1STSEM)
ACNOWLEDGEMENT
I would like to express my gratitude to all those who gave me helping hand incompleting this term paper. I want to thank my teacher MR.SARTAJ SINGH for helping me whenever I needed it the most. My friends have also supported me in my work. I want to thank them all for their help, support, interest and valuable hints.
INDEX
SRNO 1. 2. 3. 4. 5. 6. 7. 8. 9. CONTENTS Introduction Payroll administration Manual system Payroll system Objective of payroll Advantage of payroll process Example of an organization Flow chart ER Diagram PAGENO 4 5 6 7 7 8 8 14 17
PAYROLL PROCESSING
INTRODUCTION
Payroll is defined as a method of administrating employees salaries in the organizations. The term 'payroll' encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. All of these different payment methods are calculated by a payroll specialist and the appropriate paychecks are issued. The process consists of calculation of salaries and tax deductions of the employees, administrating the retirement benefits and disbursements of salaries to employees. It can also be called as an accounts activity, which undertakes the salary administration of employees in the organization. It identifies risks such as entering incorrect.employee information into the system and making unauthorized adjustments to employee hours. Administrating the employees’ salaries is not an easy task, the HR and accounts department work together to calculate and disburse the salary to the employees. Thus, payroll management can be further subdivided into two sub processes, i.e. Payroll accounting and payroll administration PAYROLL ACCOUNTING: Payroll accounting involves calculations of employees’ salaries and tax deductions. It also undertakes the activities such as preparation of tax returns, maintaining the payroll records, etc. Payroll accounting includes reporting of payroll, fringe benefits, and the payroll-related accounts of a typical company on its income statement and balance sheet. Payroll and benefits include items such as: Salaries Wages bonuses & commissions to employees overtime pay payroll taxes and costsPAY Social Security Medicare
federal income tax state income tax state unemployment tax federal unemployment tax worker compensation insurance employer paid benefits holidays vacations sick days insurance (health, dental, vision, life, disability) retirement plans profit-sharing plans Many of these items are subject to state and federal laws; some involve labor contracts or company policies. PAYROLL ADMINISTRATION: Payroll administration encompasses all the tasks involved in paying an organization’s employees. It typically involves keeping track of hours worked and ensuring that employees receive the appropriate amount of pay. It also includes calculating taxes and social security as well as ensuring that they are properly withheld and processed. Depending on the company in question, a full range of other deductions may be calculated, withheld, and processed as part of payroll administration. Additionally, the processing of contractor payments may fall under the umbrella of payroll administration. Handling payroll-related problems are part of payroll administration as well. If an employee is paid an incorrect amount or a direct deposit fails to go through, both things are payroll administration issues. Likewise tax filing and deduction errors are payroll administration matters as well. Payroll administration is an important task which most companies and business establishments find it difficult to cope with. To efficiently perform this task, it requires tedious paper work, records maintenance, salary and loan administration, providing up-to-date information to employees, superannuation, tax compliance, deductions, reimbursements, and so on
calculation of gross salaries and deductible amounts is a tedious task which involves risk. Some of the organizations use the traditional manual method of payroll processing and some go for the advanced payroll processing software. An organization opts for any of the following payroll processing methods available. Manual System Manual payroll system is the traditional payroll system which involves pen and ink, adding machine, spreadsheet, etc instead of computers, software and other computerized aids. The process was very popular when there were no computerized means for payroll processing Now-a-days it is only few small scale organizations in the remote areas that use the manual payroll. Sometimes the construction industry and manufacturing industry also use the manual payroll systems for the contractual labour, consuming as and theses risky contracts as it are is on more daily/weekly prone to basis. errors. There is full control in the hands of owner. But the process is tedious, time
Figure: Various Payroll Processes
Accountant Accountant is a professional having a degree/diploma course in finance/accountancy. He/she is responsible for all the activities related to payroll accounting. He/she has the sound knowledge of accounting principles and globally accepted standard The process adds costs to the organization. It involves paying someone who is responsible for calculating the salaries of others. The financial control regarding salary goes in Payroll Software In today’s computerized environment, payroll system has also developed itself into automated software that performs every action needed by the payroll process. It the hand of accountant.
helps in calculating the payable amounts and deductions very easily. It also helps in generating the pay slips in lesser time. Automated calculations result in no errors. Data is validated automatically by the software. It needs professionals to make use of the software for its efficient working. Payroll Outsourcing Payroll outsourcing involves a third party (an outsourcing company) in the calculations of salaries and deductions. The outsourcing organization is responsible for all the activities of the payroll accounting. It saves time and cost for the organization. If there is more number of employees (say more than 900-1000) in the organization, payroll outsourcing would be very much.
Objective of payroll processing:
To speed up the task of maintaining employee records,such as their personal information ,their job profile and the salary thereof, by computerizing the whole scenario so that the task can be performed in a better ,efficient an cost effective manner. To facilitate easy and user friendly interface for entry of records pertaining to employees as well as for generation of payslips thereof . To facilitate maintaince of proper record of attendance for each and every employee so that appropriate reports could be generated as and when required for the ease of higher authorities. To provide an automated system of payslip generation, so that useful reports grouped according to employees or month could be generated out of the system. To sum up the the objective of building this project is to avoid the unnecessary wastage of time and money that is caused due to manual procedure that was being followed for maintaining the records of employees and salary information in organization.
Advantages of pay roll processing:
Un-authorized access:
In computer system we have a password
facility,so no body can access our data.
Data consistency: It computerized system data is consistent because it
cannot be changed by anyone.
Easy to access data: It can be accessed in this system as it is arranged in
proper table.
Reduce human effort: By use of packages large amount of human effort is
saved.
High speed: as the computer can perform all function so the speed is vary
high.
Accuracy: As all the work is done on computer,so data is very accurate. Time saved: Computer is vary fast processinh device.so working on it save
time.
Query services: The same reports in the proposed system give the
information regarding the query to user.
Removing data redundancy: Here delicacy is not a wise and store
Example of an organization : In an organization there is need to maintain the all
records of employee personal record, attendance records, leaves records, overtime records, salary maintain with all options.
Table Name: personal_info
Primary Key: - employee_id Foreign key: - NILL
Purpose: - This table contains the personal information of the employee.
Table Name: department_info
Primary Key: - dept_id Foreign key: - employee_id references personal_info(emp_id)
Purpose:employee.
This table contains the department information of the
Table Name: salary_deduction
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the deductions the employee.
Table Name: salary
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose: - This table contains the salary details.
Table Name: allowances
Primary Key: - emp_id Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the allowances of the employee.
Table Name: attendance
Primary Key: - emp_id and day Foreign key: - emp_id references personal_info(emp_id)
Purpose:- This table contains the attendance record of the employee.
FLOW CHART
Add new employee
Employee code and pf code generated
Name, father name, DOB etc
Age calculated
,file etc.
Add, contact no, basic pay no, pan no, date of joining
Date of retirement calculated
Allowance
Saved in “personal_info”
Do u want to add more or not
Emp salary
salary
Return
Is employee On probotion
Employee detail from “personal_info”
Employee detail,from”persona l_info” and allowance
Input deduction amounts
Salary calculated
Saved in salary
RETURN
Employee leave Leave
Employee name,father name,department,designatio n,from”personal _info” ,total Saved in “employee leave,leaves taken uo to leaves” previous month from
Leave taken
Calculate leaves
return
ER DIAGRAM
Designation department allowance deduction
code
Prov.fund Input, basic salry Salary calc. Income tax Pf_loa incre n ment Pf increment salary loan
Old detail
Promo ted emp
emp Advance granted
Database
Over time
For
advance
code mon th pay men t c.lea ve
payroll
labour nam e addr ess cont act salar y
city Salary(probated employees)
