Final Project - Payroll Administration

Student Name: Devi Kiran Donga

This project is worth 30% of your final mark.The purpose of this project is to give you the opportunity to demonstrate what you have learned within this course, and that you have the knowledge to apply your learning in a practical way (such as working in an actual payroll department).

In order to complete thiss project you will need to answer the questions below in the spaces provided.You are required to type the answers within the boxes provided, hand written answers in the boxes with not be accepted.This project is broken into four separate parts.

Part A - Short answers

Part B - Essay

Part C - Case Study

Part D - Short answers

You will see the grading for each question in the column on the right. For calculation questions you will be marked on your final answer.It's important to remember that when it comes to paying people, it may not necessarily matter how you got their pay correct, only that it is correct.Rounding will be taken into consideration.The case study will require you to use the Payroll Schedule provided with the project.

Part A

Question #1

List 6 taxable benefits that you learned about during this course. (6 marks)

Taxable Benefit

Mark

Company vehicle for personal purpose

/1

Boarding and lodging

/1

Childcare expenses

/1

Gym membership

/1

Medical expenses

/1

Transit passes

/1

Total Marks

/6

Question #2

List the statutory deductions in order of requirement. (6 marks - to receive marks you must list all 6 and they must be in the correct order)

Statutory Deductions

Mark

Employment insurance

/1

Canada pension plan

/1

Income Tax

/1

Canada Savings plan

/1

Charitable Donations

/1

Long term disability

/1

Total Marks

/6

Question #3

You have just joined the payroll department as the newest Payroll Administrator.Everyone else on the team has been there for a number of years, so the Payroll Manager is excited to have a fresh pair of eyes.The Payroll Manager has assigned the following task to you to help you become more familiar with the company.

She would like you to review all the pay codes set up in the payroll system to ensure the correct taxes are being applied.

Enter a Yes or No under each column to determine if it is taxable, pensionable and/or insurable.Each code will be worth 1 mark, there will be no partial marks awarded.

Pay Code

Tax

CPP

EI

Mark

Car allowances ($500 paid each month through payroll to eligible employees)

yes

No

/1

Partial reimbursement of cell phone bills (employee owned phones used for business)

/1

Taxable benefits for company cars (non-job related vehicles)

/1

Gift valued at $300 awarded for work anniversary gifts

/1

Group term life insurance policies - employer-paid premiums - non-cash

/1

Meals - reimbursements for business travel

/1

Parking - scramble parking available to all staff

/1

Parking allowances ($200 paid each month to eligible employees)

/1

RRSP contributions - (no employer match, employees eligible to withdraw at any time)

/1

Training provided onsite for all employees on policy related issues

/1

Total marks

/10

Part B

Question #4

As a payroll administrator, identify which of the following you feel is the most important payroll document or guideline you have/available to you.

A signed and dated TD1 and TD1ON

Collective Agreement

Signed employee contract

Employment Insurance Act

Record of Employment Guide

Employment Standards Act

Pick one from the above list.

1.Define what information it provides.

2.Why you feel this is important.

3.How it relates to the processing of payroll.Provide 3 reasons to justify your choice.You must have at least 3 ses in each paragraph.

4.Your answer must be in proper essay format:introduction, content and conclusion.

Marking Rubric:

10 Marks

1 mark - selecting a topic

3 marks - for your three reasons why you think this document is important to a payroll administrator

3 marks - for your full explanation of the importance of this document

3 marks - for correct essay format as explained above

The topic I am selecting is Signed employment contract.

Here, let me share three reasons why a payroll administrator is relevant, these are as mentioned below:

-Payroll administrator must conduct multiple tasks to start each employee's pay or benefits. Employees are charged here for the total hour worked using hourly rate, these hourly rate details will be contained in Signed Employment Contract, Payroll administrator can use Signed Employment Contract for each employee as a guide to learn about the hourly rate. Using the hourly rate not all workers are paid. These are workers who will be paying fixed salary on a monthly basis and up to a certain portion of the fixed amount as an incentive. Only specific compensation details can be found for every employee in the Signed Employment Contract. This data is used by the payroll administrator to process their data officially.

- Payroll administration must conform with the corporate processes and requirements, these standards and requirements are outlined in the Signed Employment Agreement, for example: procedures should be established in the agreement because workers will be paying their wages on or before the twentieth of each month and all bonuses would be compensated at the end of the financial year. There, Payroll administrator is to obey these procedures. Maintaining such a bond of signed work as ref. Payroll administrator can remove inconsistencies between different programmes.

- Signed Employment Contract will provide supplementary compensation provisions such as overtime payment details, holiday benefits, etc. It will also contain certain terms and conditions such as violation of honour code and wrongdoing that may result in firing of the employee, Payroll Manager may consider Signed Employment Contract as ref. for paying the employee some extra amount and Payroll Manager as well. They will obey Signed Work Agreement here and will not pay the employee.

There are many reasons for keeping the Signed Employment Contract. Here, as mentioned below, these are:

- Signed employment contract establishes a court-enforceable agreement and all parties have a obligation to perform as specified in it. Therefore, we can mitigate severe degree of any disagreement with the creation of such a contract.

- The contract also contains terms and conditions, exit provision, pay summary, work requirements, and so the sides must obey these details and adhere to prevent conflicts.

- Approved work contract should also provide methods for conflict settlement, using these strategies; we will settle conflicts either jointly or by legal assistance.

Topic Selection/1

3 reasons why you think it is an important document/3

Full Explanation of 3 reasons/3

Correct Essay format/3

Total Marks/10

Question #5

Payroll tends to be the hybrid position between Human Resources and Finance.

List 3 ways that payroll interacts with each department.

6 Marks total

1 mark for each listing of how Payroll interacts with HR and/or Finance

1 mark for each explanation of the importance of the interaction

3 ways Payroll Interacts with HR and/or Finance

Importance of interaction

Mark

1. Legal Compliances-This is the first and most critical aspect that HR and Finance connect with the payroll. There are several tax codes that refer to workers who may be related to pay incentives or to disclose and store sensitive details such as numbers in social security. A collective effort by all is needed for ensuring these legal compliances. HR and payroll hold and shop employee records including compensation estimates and department of finance assists with financial compliances such as tax deductions.

Interaction here is very relevant as the finance department is largely reliant on the data generated by HR and payroll for the purposes of estimating legislative deductions and other tax compliances. When there is no clear cooperation between all teams, the business can end up faced with legal repercussions.

/2

2. Salary disbursement-This is another critical way both divisions communicate with each other again. In most companies the monthly payroll disbursement sheet is assembled by the combined initiative of Payroll and HR, which the finance department eventually accepts for reimbursement.

Each employee expects to get their pay on time and with the appropriate number. There has to be good coordination between HR, accounting and finance to ensure that nothing occurs. HR and payroll must supply Finance with the disbursement sheet immediately for review, so that they have adequate time to prepare and make the payment on schedule.

/2

3. Actuarial value Acturial Value refers to the value of different employee-related compensation such as gratuity, short-term unpaid absences or plans for quitting encashment. That is something that is prescribed by the rules of accountancy and taxation and this is performed by each company by an actuary. There the leave info, entering date, termination date etc. relating to staff are provided by the HR while the compensation amount specifics are given by the payroll and the Finance is the one who communicates with the actuary to agree on the decisions to be made for determining the payment amounts and also for publishing those payment amounts eventually in their account books.

The allowance estimates in relation to the financial statements arising from an acturial assessment are of considerable significance. There will be serious repercussions for the business if that figure winds up being incorrect.

It is the area where departmental coordination is most critical, as the Finance team depends solely on the details generated by the HR and payroll staff. If the data is inaccurate, otherwise actural estimation would end up false. Therefore strict checks must be in place to ensure good cooperation for the acturial cycle between the agencies.

/2

Total Marks

/6

Part C

Case Study

In this you wil be required to calculate the gross to net pay for three employees.You will also be required to calculate other employer costs based on the information provided.This case study will demonstrate that you know how to use what you have learned in this course.

Majic Corporation sells phone cases to public and private companies.They are located at 123 Locus Rd, Toronto, ON M1H 4S3.They employ 200 full time employees who work in sales, customer service and office support roles.

They have had an annual remuneration of over $1,000,000 for the past several years therefore their EHT rate is 1.95%.

Pay period #1 for those paid bi-weekly started December 22, 2019.

The first pay day for these employees is Friday Jan 10, 2020.

They have three staff in the Customer Service Department answering questions from clients and the general public.

A)

Marijke has been with Majic for 5 years and is the Customer Service Supervisor.She earns $2000.00 bi-weekly working 35 hours per week.

Her employer provides the following:

Health and Dental - fully paid for by the employer at a monthly cost of $469.00

Group Term life insurance - 2x her annual salary at a cost of $0.69 per month per $1000 of coverage

AD&D - $50,000.00 at a cost of $0.19 per month per $1000 of coverage

She has the following personal deductions from her pay:

$5.00 per pay donation to the United Way

Federal and Provincial income tax - she is claiming maximum tax (Claim Code 0) plus an additional $10.00 per pay

Pay Period 3

Answer

Mark

Gross Pay

$2200

/1

Gross taxable income

$162

/1

CPP contributions

$4.31

/1

EI premiums

$1.36

/1

Federal and Provincial taxes

$30.35

/1

Group term life insurance

$13.15

/1

AD & D

$0.3653

/1

United Way

/1

Net pay

$151.63

/1

Employer health tax

$0.814

/1

Total Marks

/10

Pay Period 4

Answer

Mark

Gross Pay

$2200

/1

Gross taxable income

$162

/1

CPP contributions

$4.31

/1

EI premiums

$1.36

/1

Federal and Provincial taxes

$30.35

/1

Group term life insurance

$13.15

/1

AD & D

$0.3653

/1

United Way

/1

Net pay

$151.63

/1

Employer health tax

$0.814

/1

Total Marks

/10

B)

Neema has been with Majic for 3 years and answers calls specifically from clients.

She earns $18.25 per hour and works 35 hours per week and receives overtime per ESA.

Her employer provides the following:

Health and Dental - 50% paid by the employer and 50% paid for by Neema at a cost of $469.00 per month

Group Term life - $50,000.00 at a cost of $0.45 per month per $1000 of coverage

She does not receive AD&D

She has the following deductions:

Federal and Provincial taxes - she is claiming basic tax (Claim code 1) plus an additional $5.00 per pay

Calculate the following for Neema:

Pay Period 3

Answer

Mark

Gross Pay

/1

Gross taxable income

/1

CPP contributions

/1

EI premiums

/1

Federal and Provincial taxes

/1

Health and Dental Cost

/1

Group term life insurance

/1

Net pay

/1

Employer health tax

/1

Total Marks

/9

Pay Period 4

Answer

Mark

Gross Pay

/1

Gross taxable income

/1

CPP contributions

/1

EI premiums

/1

Federal and Provincial taxes

/1

Health and Dental Cost

/1

Group term life insurance

/1

Net pay

/1

Employer health tax

/1

Total Marks

/9

C)

Roger started with Majic this year.His first day was January 6, 2020.He was hired on a temporary basis to cover an employee who was off on maternity leave.He earns $16.50 per hour.He is covered under the Employment Standards Act of Ontario. He works 7 hours per day and receives 4% vacation pay on each pay cheque.He does not receive any benefits.He has not taken any days off and received stat pay for the following holidays:

Family day he received 7.28 hours of stat

Good Friday he received 7.28 hours of stat

Victoria Day he received 7.28 hours of stat

He has the following deductions:

Federal and Provincial taxes - he is claiming basic tax (Claim code 1)

He has found a full time job and his last day to work will be June 26, 2019

Pay Period 3

Answer

Mark

Gross Pay

/1

Gross taxable income

/1

CPP contributions

$2

/1

EI premiums

$1

/1

Federal and Provincial taxes

$464

/1

Net pay

$1326

/1

Employer health tax

$0.47

/1

Total Marks

/7

Pay Period 4

Answer

Mark

Gross Pay

$1617

/1

Gross taxable income

$1226

/1

CPP contributions

$3

/1

EI premiums

$1

/1

Federal and Provincial taxes

$464

/1

Net pay

$1686

/1

Employer health tax

$0.59

/1

Total Marks

/7

D)

Now that you have calculated the net pays for each of these employees, calculate the totals for all three for following:

Pay Period 3

Answer

Mark

Total Gross earnings for all 3 employees

/1

Total employee portions for CPP

/1

Total employer portions for CPP

/1

Total employee portions for EI

/1

Total employer portions for EI

/1

Total Federal and Provincial taxes

/1

Total employee portion of Health benefits

/1

Total employer portion of Health benefits

/1

Total for United Way

/1

Total EHT

/1

Total Marks

/10

Pay Period 4

Answer

Mark

Total Gross earnings for all 3 employees

/1

Total employee portions for CPP

/1

Total employer portions for CPP

/1

Total employee portions for EI

/1

Total employer portions for EI

/1

Total Federal and Provincial taxes

/1

Total employee portion of Health benefits

/1

Total employer portion of Health benefits

/1

Total for United Way

/1

Total EHT

/1

Total Marks

/10

E)

Journal Entries for Pay Period 3 and 4

Using the grid below complete the journal entry for the month of February using the amounts you calculated in Section D.

Account

Debit

Credit

Mark

Wage Expense

/1

CPP Expense

/1

CPP Payable

/1

EI Expense

/1

EI Payable

/1

Fed & Prov tax payable

/1

Health expense

/1

Health payable

/1

United Way payable

/1

Net Pay

/1

Total

/1

Total Marks

/11

F)

As previously mentioned Roger has decided to leave Majic.His last day worked will be June 28^th.He will require a Record of Employment.

Complete the boxes below with the correct amounts that should be included in each of the sections.

Box

Amount

Mark

Box 10

/1

Box 11

/1

Box 12

/1

Box 14

/1

Box 15 A

/1

Box 15 B

/1

Box 16

/1

Box 22

/1

Total Marks

/8

G)

Year End

In this question you will need to complete the boxes for a T4 for Marijke using some of the following information.Enter your answers in the grid provided below the copy of the T4.This would be her 2019 T4.

1.Gross earnings = $50700.00

2.Her taxable benefit for Group term life insurance was $81.50

3.Her taxable benefit for AD&D was $16.25

4.Her employer paid Health and Dental was $440.00

5.Her Taxes were $8825.33

6.Her donations to a charity were $104.00

7.You will need to calculate her CPP and EI deductions using 2019 rates.The 2019 rate for CPP is 5.1% and EI is 1.62%.

Description

Answer

Mark

Company

/1

Year

/1

Box 10 Province of Employment

/1

Box 14 Employment Income

/1

Box 16 Employee's CPP contributions

/1

Box 18 Employee's EI premiums

/1

Box 22 Income Tax deducted

/1

Box 24 EI insurable earnings

/1

Box 26 CPP/QPP pensionable earnings

/1

Box 46 Charitable Donations

/1

Other Information Code 40 Other Taxable Allowances and Benefits

/1

Total Marks

/11

Part D

WSIB - In the boxes provided please include the frequency of the WSIB payment and the date it would be due.

Assessable Earnings

Frequency of Payment

Due Date

Mark

$65,400.00

/2

$551,500.00

/2

$103,600.00

/2

$1,395,200.00

/2

$2654.00

/2

Total Marks

/10

Total Marks

/150

Grade Percentage - 30% of final grade

%