Establish and Maintain Payroll systems | Assessment

Establish and Maintain Payroll systems
Knowledge task: This assessment task requires students to research and type answers in Word to
eleven questions as listed in this document, at home in a safe environment. Students to answer in their own
words as much as possible. Include any website references used for each question.
Question 13: 13. Describe current Australian Tax Office (ATO) requirements for:
Australian Business Number (ABN)
Employee declaration
Tax file number (TFN) declaration
Satisfactory
response
Yes
☐
No ☐
Answer:
The Australian Business Number (ABN) is required only for entities carrying on or starting
an enterprise in Australia and making supplies in relation to Australia’s indirect tax zone. A
corporations Act company also needs to have the same.
The employee declaration should contain the details of the fringe benefits received by the
employees which is written by the employees themselves. These should be obtained before
the date of lodging the FBT return.
The ATO states that the Tax File Number (TFN) should be applied for all people residing in
Australia and looking to obtain the benefits of the government in the country.
References: ABN entitlement | ABR. (2020). Abr.gov.au. Retrieved 6 March 2020, from
https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement
Comment:
Question 14: Explain pay as you go (PAYG) withholding tax and when an employer must
register
Satisfactory
response
Yes
☐
No ☐
Answer:
A Pay as you Go (PAYG) is a withholding tax in which incremental amounts of the business
income are paid by the businesses to the ATO. These instalment payments accumulate and
form a part of the income tax liability of the business. An employer must register for PAYG
before they first withhold an amount of tax from a payment.
References: PAYG withholding. (2020). Ato.gov.au. Retrieved 6 March 2020, from
https://www.ato.gov.au/Business/PAYG-withholding/
Comment:

Question 15: Describe fringe benefits tax (FBT). What does the term “grossing up” refer to?
Give 3 examples of fringe benefits
Satisfactory
response
Yes
☐
No ☐
Answer: Fringe Benefits Tax (FTB) is the tax paid by the employers for the additional
benefits paid to the employees apart from the salary. This tax is applicable even if the tax is
paid by a third party under an agreement with the employer. Grossing up refers to the adding
up of all the FBTs provided by the employer. There are two gross up rates used in the
calculation of the benefits received by the employee. Car for private purposes, gym
membership and a discounted loan are examples of fringe benefits.
References: Fringe benefits tax (FBT). (2020). Ato.gov.au. Retrieved 6 March 2020, from
https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/
Comment:
Question 16: An organisational payroll policy and procedures establish among other
things internal checks and balances to control and protect this
expense. This can then reduce the incidence of what two things?
Satisfactory response
Yes ☐ No ☐
Answer:
The establishment of the payroll policy and procedures result in the reduction of the
incidence of errors and the possibility of occurrence of frauds. However, the checks
should be taken regularly and also involves a lot of time and resources.
Comment:
Question 17: An employer is required to follow industry codes of practice for payroll
operations. Name 3 forms an employer is required to give a new
employee before paying them
Satisfactory response
Yes ☐ No ☐
Answer:
The three forms which an employer needs to give to the employee before paying
them include a Tax File Number (TFN) declaration, Standard Choice form for those
eligible to choose a superannuation fund and another Standard Choice form to
nominate their preferred super fund.
Comment:

Question 18: Describe key features of manual and computerised payroll systems Satisfactory response
Yes ☐ No ☐
Answer:
The main features of a manual payroll system include the calculation of the payroll
each day on paper. All earning heads and statutorily applicable deductions are
applied without any start-up costs. The time taken for processing the payroll is very
high in this case.
A computerised payroll system maintains a payroll software which assists the
entity in the processing of the payroll. Once the input for each employee is entered,
all the other calculations are done by the software. The relevant forms for each
employee is also processed at the year-end which saves a lot of time.
Comment: