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Payroll Cycle - Coggle Diagram
Payroll Cycle
Characteristics
- The payroll cycle consists of five functions which will be explored throughout this module
These functions are:
- The Payroll Preparation Function
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- The Deductions: Payments and Recording Function.
- The Human Resources Function
- The Payment Preparation and Payout Function
- Accounts affected by this cycle:
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Tax (PAYE) and Other Contributions by the employer on behalf of the employee are also recorded at each month-end as deductions, creating a liability.
A typical journal for deductions will be DR. PAYE/medical aid/pension fund and CR. SARS/Discovery Health.
A typical journal entry to be processed every month at month-end includes DR. Salaries and wages and CR. Bank (Payables?).
When payment is made to the payable, the liability is then reversed as DR. SARS/Discovery Health and CR. Bank.
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