BSBFIM502 Manage Payroll: Security Procedures, Allowance Substantiation, and Financial Resource Safeguarding

BSBFIM502 MANAGE
PAYROLL

PART A
1.
The three aspects of purpose of establishing security procedures in relation to managing payroll
information are as follows:
 It is required to perform background checks on potential payroll employees.
 To ensure the confidentiality of payroll data as well as records.
 It is also significant for paying employees and filling employment tax (Murphy, 2019).
2.
In order to ensure that employee claim for allowance is substantiated, it is significant to establish
clear policies and procedure in relation to same which are as follows:
 The definition of allowance should be clear.
 The basis for the allowances are clearly explained such as award, contract etc.
 The application of claiming allowances is processed.
 Employee submit document required to substantiate claims such as application forms
should have downloaded from intranets.
 Proper approval and authorisation of claim.
3.
 Payroll records such as wages paid, allowances, bonus etc. for at least three years.
 Wage computation record such as time cards, work schedule etc. for at least two years.
 Employment tax documents such as forms for at least four years (Morgan and Castelyn,
2018).
4.
List of items required to compute gross pay:
 Wages
 Allowances

 Pay leaves
This information would be required to obtain from payroll records, time sheet, rate of pay,
employment contract, person tax file number declaration form (Murphy, 2019).
5.
The two statutory deductions that can apply to a wage or salary earners are as follows:
 PAYG withholding for tax: The employer withholds certain amount of employee salary
or wages with themselves at the time of payment. This is further send by employer to
ATO. The employee can take deduction of withholding. The calculation is (Estimated tax
/ instalment income) * 100
 Medicare Levy: This is one of the statutory deduction which is determined via 2% of the
employee taxable income (Murphy, 2019).
6.
My current job is Credit manager in reputed bank of Australia. The two allowable tax deduction
that I can claim my overall tax deduction is as follows:
 Gift and donation: This is one of the type of expense which I have made in the current
year and I can claim 100% deduction on it.
 Travel expenses: The expenses I have incur for the purpose of my work such as meeting
clients are also a type of deduction which I can claim to reduce my overall taxable
income (Fitzpatrick, 2019).
7.
The three checks that an organization need to perform when reconciling payroll are as follows:
 Payroll register.
 Employee time cards.
 General ledger to check wages and deductions.

8.
Tax File Number is an individual personal reference number which is used for the purpose of
Australian tax and superannuation systems. The individual that work in Australia should require
to have TFN number. The purpose of TFN declaration form is the list all the tax saving
investments that an employee proposed to make during that specific year. Further, the time line
takes by ATO to process, complete and lodgement tax return electronically is within 12 business
days (Morgan and Castelyn, 2018).
9.
i. Payroll tax is referred to the amount of tax charged and withheld on the employer’s payroll.
For instance, social security tax, medicare levy, etc. A business is required to pay payroll tax it is
either individually or in a group paying more than $25000 per week in terms of Australian
taxable wages.
ii. If the annual Australian taxable wages are less than $1.3 million, then there is no requirement
to pay payroll tax.
iii. It is 4.75% for employer paying $6.5 million or less in Australian taxable wages while for
those who are paying more than $6.5 million, current payroll tax rate is 4.95%.
iv. On getting registered as an employer in Queensland, the payroll tax return must be lodged
periodically on monthly basis and annual returns annually each year.
v. Period returns are due to payment after the 7 days from the end of return period while annual
returns are due by 21st of July each year.
iv. There were no tax to be calculated for the Australian taxable wages which is below the
exempted threshold of $1.3 million. Accordingly, for $1 million payroll, there would be no
payroll tax.
10.
i. Fringe benefit tax refers to the tax paid by businesses in lieu of the benefits it has offered to its
employees. It is important in PMS as it indicates the various in which employer is committed
towards compensating employees.