2.8 Payroll Applications

Momina

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What is a payroll system?

What are the two types of files

involved?

What happens in a payroll system?

What happens to the old master file?

General Overview

Payslips

Financial Reports

Exception Reports

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What are Payroll Systems?

• They involve batch processing• The files are stored on two separate

magnetic files • This obviously then means that there will

be two types of data files involved

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The Two types

1. Master file – containing data about the workers: i. Employee number ( This is used as the PRIMARY KEY; data is

stored in order of this)

ii. Name

iii. Contact details

iv. Rate of pay

v. Pay received

2. Transaction File – is a temporary file; containing data that can change from month to month.

I. Contains details of # of hours worked + any overtime + employee number.

II. Details of any new worker or any worker whose details have been changed.

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What happens in a payroll system?

• End of week/month: master file is processed using the transaction file.

• BEFORE the processing, the transaction file needs to be put in the same order as the master file.

• Computer then calculates the pay of each worker use the # of hours worked and the rate per hour

• Payslips then printed along with error reports.

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What happens to records in the old master file?

• Records from old master file are read and are updated using calculations, deletions, addition or amendments.

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Old Master File

Transaction File

Update (this involves calculation of employee’s wages using the hours worked from the transaction file)

Reports (these can consist of :a) Financial reportsb) Error reportsc) Payslips

New Master File

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Payslips

• Information contained on these can be found on the new master file and the transaction file.

Master file with:-Employee number-Department worked in- pay rate per hour-Tax code-NI number

Transaction file: Containing employee

number and hours worked.

Payslips

Image of Payslip

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Payslip

From the old master file

This data is written to the new master record and is updated

From the transaction file

From the old master file

Calculated during update process

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Financial Reports

• Payroll software report generator facility

1. Information on employees of company/ or department

2. Information on employee salary

3. NI(National Insurance) contributions for all employees

4. Total NI contribution paid to tax authorities.

5. Income tax

6. Amount of money paid to each bank where employees have an account.

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Exception Reports

• These are reports of certain validation rules. For example:– Employee earning an unusually large amount

of money– Employee that has been on emergency tax for

a long time.– 2 employees with the same NI number.