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UNIT 5: PAYROLL CYCLE - Coggle Diagram
UNIT 5: PAYROLL CYCLE
The payroll expense
Major expenses of an organisation
High risk cycle - cash is involved.
The payment preparation and pay-out function
Only for the hours worked
Wages are paid weekly
To ensure that employees are paid their wages
Usually done on cash basis.
The employee must sign a wage collection register
The payroll preparation function
Deductions from employees – Tax; UIF, medical contributions
Net Pay
Calculates gross wages
The deductions: payments and recording function
portion held by the company does not belong to the company
Statutory requirements, such as Employee Tax
Hold back certain portions of the wages earned
The human resources (HR) function
Matters relating to the personnel department
Deals with aspects of the human capital
Hiring staff
Dismissal
The timekeeping function
employee to pass a clock card.
Swipe through a time clocking device.
Accurate and complete record of valid hours worked
Automatically record the time of either entry or exit
Documents
Payroll
Payslips
Authorised payroll
Pay-packets
Unclaimed wages register.
Weeknesses
No formal clock in procedure that is suitably supervised
No control over the payroll function
No human resources department
Lack of segregation of duties
Internal Controls
There should be proper segregation of duties
A separate human resources department
Automatically record the time of either entry or exi