Employee Costs

Question 1

Steps to the wages and salaries system?

Answer 1

Calculation of wages, salaries and taxes
Recording in accounting system
Payment

Question 2

What are the controls involved in the calculation?

Answer 2

Starters and leavers authorised by managers/HR
Timesheets/clocking in and out for paid per hour
Personnel files for all employees regularly reviewed
Qualified staff calculate payroll

Question 3

What are the controls involved in recording?

Answer 3

Payroll reconciliations performed using a control account

Question 4

What are the controls involved in payment?

Answer 4

Segregation of duties between preparing and distributing payroll
Cash payments require ID
BACs payments have a review and authorisation prior to payment