Theory

Question 1

Define Payroll

Answer 1

Payroll encompasses all the expenses associated with the wages and salaries of a business.

Question 2

Explain how are wages/salaries are set in Australia.

Answer 2

Wages and Salaries are set in Australia from an award, which is a legally binding order that sets out the minimum rates of remuneration and conditions of employment under which employees work in a particular industry.

Question 3

State the key conditions of employment in awards.

Answer 3

An award covers the key conditions of employment- such as: 
•	Minimum rates of pay 
•	Allowances that must be paid
•	Overtime and penalty rates of pay 
•	Minimum and Maximum hours of work 
•	Leave provisions-sick, annual

Question 4

Define Gross Pay

Answer 4

Gross pay is the total amount of an employee’s earnings before any deduction are calculated. It can be determined by an award or enterprise bargaining agreement.

Question 5

List what may be included in the calculation of Gross Pay.

Answer 5

• Remuneration for hours worked (normal or overtime)
• Remuneration by annual salary
• Bonuses
• Leave payments (sick, annual etc.)
• Leave loading
• Remuneration for other factors such as: additional skills, travelling time and associated expenses
• Meal allowances
• ‘Dirt’ money for specific occupations

Question 6

Explain the difference between a wage and a salary

Answer 6

A wage refers to an hourly 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 a salary refers to an annual rate of remuneration and usually do not involve overtime payments. Eg Management