Term 4 - Payroll Flashcards
Payroll
Payroll encompasses all the expenses associated with wages and salaries of a business
Explain how are wages/salaries are set in Australia.
Wages and Salaries in Australia are set from an award. An award is a legally binding order that sets out the minimum rates of remuneration and conditions of employment, of employees in a particular industry.
State the key conditions of employment in awards
An Award covers the key conditions of employment, such as:
- Leave Provisions E.g Sick Leave
- Overtime and penalty rates of pay
- Allowance that must be paid E.g Travel
- Minimum rates of pay
- Minimum and Maximum work hours
LOAMM
Gross Pay
Gross Pay is the total amount of an employee’s earnings before any deductions. It can be determined by an award or enterprise bargaining agreement
List what may be included in the calculation of Gross Pay.
- Remunerations for hours worked - normal and overtime
- Remunerations by annual salary
- Bonuses
- Leave Payments
- Leave Loading
- Travel Time and associated Expenses
- Meal Allowances
- Uniform expense
Red Robbers Bank Locally Largely To Maintain Unity
Explain the difference between a wage and a salary.
Wages refer to an hours rate of remuneration. The amount varies according to the number of hours worked in a pay period. Wage earners are entitled to overtime payments. E.g Customer Service Roles
Whereas Salaries refer to an annual rate of remunerations and usually do not involve overtime payments. E.g Management
Discuss the term “enterprise bargaining”.
Enterprise Bargaining is when employers and employees negotiate the conditions of employment. However, new conditions cannot reduce any award entitlements
Referring to the retail award, explain the difference between part-time and casual.
Part-time works are employed for no less than 12 hours per week and no more than 32 hours per week with a minimum payment of 3 hours per day. Overtime is payable for any time worked more than 8 hours on any day.
Whereas Casual workers are employed for not more than 30 hours in any one week. Overtime is payable for any time worked in excess of 8 hours on any one day.
State the tax free threshold when calculating tax?
The tax free threshold is 18,200 p/a or $350 per week
Why would some employees not be able to claim the tax-free threshold from an employer?
Some employees would not be able to claim the tax-free threshold if they are working more than one job. Alternatively, they may not have completed their tax file declaration form.
List the compulsory deductions (5)
FICHP
- Financial Supplement Debt
- Income Tax
- Court Ordered Payments
- Higher Education Contribution Scheme
- Postgraduate Education Loans Scheme
List the voluntary deductions (7)
LAMISSU
- Loan Repayments
- Additional Superannuation
- Medical Insurance
- Insurance Premiums
- Social Club
- Savings Deposits
- Union Fees
When is the TFN Declaration form filled in? By whom? How is it used?
The TFN declaration form must be completed by the employee and countersigned by both the employer and employee and lodged 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 each employee.
Explain the difference between an employee contributed superannuation and an employer contributed superannuation.
Employee contributed superannuation is voluntary.
Whereas, Employer contributed superannuation is compulsory, per the Superannuation Guarantee Act 1992. The minimum amount of employer contributed superannuation is 9% of gross normal earnings.
Define income tax installment.
Income Tax Installment is the estimated amount of income tax that an employee must pay on gross earnings per pay period.
