Payroll Flashcards
Define the term “payroll”
Payroll encompasses all the expenses associated with the wages and salaries of a business.
Explain how wages/salaries are set in Australia.
In Australia, state and federal laws govern matters pertaining to conditions of employment, which are negotiated by employers and employees and enforced by an industrial tribunal. These laws include the Industrial Relations Act, and unfair dismissal and privacy legislation. In addition, awards set out most of the rules by which employers must abide with relation to conditions of employment and remuneration levels.
Define Gross Pay
The total amount of an employee’s earnings before any deductions are calculated. It can be determined by an award or enterprise bargaining agreement.
List what may be included in the calculation of Gross Pay.
Gross pay may include remuneration for hours worked - normal and overtime, bonuses, remuneration by annual salary, leave payments, leave loading, travel time and associated expenses, uniform/clothing expenses and meal allowances.
Explain the difference between a wage and a salary.
A wage is an hourly rate of remuneration, varying dependent on hours worked in a pay period. Wage earners are entitled to overtime payments. Whereas, salaries refer to an annual rate of remuneration which do not include overtime payments.
Discuss the term “enterprise bargaining”
When employers and employees negotiate the conditions of employment, although such new conditions cannot reduce any award entitlements.
State the tax-free threshold when calculating tax?
$18 200 or $350 per week.
Referring to the retail awards, explain the difference between part-time and casual.
According to the retail award, a part-time employee refers to a person who has a minimum of 12 and maximum of 32 working hours per week; overtime is payable for any time worked in excess of 8 hours on any day and or 64 hours in any fortnight. Whereas, a casual employee is engaged for no more than 30 hours in a week. Overtime is payable for any time worked in excess of 8 hours on any one day.
List the compulsory deductions
Income tax, Higher Education Contribution Scheme (HECS), financial supplement debt, Postgraduate Education Loans Scheme (PELS) and court-order payments.
List the voluntary deductions.
Superannuation, medical insurance, insurance premiums, union fees, loan repayments, social club and savings deposits
When is the TFN Declaration form filled in? By Whom? How is it used?
The TFN must be completed by the employee and countersigned by both the employer and employee and logged with the ATO within 14 days of the employee starting work. The employee requires a tax file number prior to completing this form. The tax file declaration form helps the employer determine what rate of tax must be withheld for employee.
Explain the difference between an employee contributed superannuation and an employer contributed superannuation.
Contributions can be made by an employee on a voluntary basis if they wish to provide a more substantial benefit for their retirement. Whereas, under the Superannuation Guarantee Act 1992, employers are compelled to provide superannuation on behalf of their employees, the minimum being 9 % of gross normal earnings.
Define income tax instalment
the estimated amount of income tax that an employee must pay on gross earnings per pay period.
Explain the term “salary sacrificing”
The employee sacrifices cash in exchange for the employer paying for some other item for the employee.
Explain the term PAYG
Pay As You Go is a withholding system which operated in Australia whereby income tax is paid as the income is earned.
