Procedures For Ensuring Payroll Confidentiality And Security

Secure physical environment

The Five procedures that can be used to ensure confidentiality and security of payroll information are;

The payroll security greatly depends on the physical environment. All copies of documents that may contain crucial information must be placed under key and lock. All the filing cabinets should have locks so that they are closed at all times. Computers within the offices should be placed such that unauthorized persons are unable to obtain any information from them. Access to the office should be limited only to the payroll employees who carry out their day to day work within the office (Frost, 2015, p. 32).

An organization should come up with strict measures which would ensure that very few people have access to the payroll information. For example, the employees within the department should be able to access their payroll details but unable to access the payroll details of any other person. There should be a close supervision of the employees who work in the department.

Given that most of the payrolls across the world are handled electronically, the databases should have passwords to guarantee the security of data and information (Frost, 2015, p. 36).

Inquiries for payroll information from external sources may expose the employees’ information. A standardized system should be put in place such that any information regarding an employee can only be obtained once the employee has been furnished with the information and he/ she has allowed the go ahead.

Appropriate guidelines should be put in place to ensure that all sensitive documents are properly disposed of. Such materials should be properly shredded to ensure that no one gets access to the information that is contained in them (Frost, 2015, p. 36). 

Procedures that would be put in place in an organization to guarantee correct substantiation of claims for allowances

1. Installation costs should only be included if they form part of the claimed allowances.
2. Preparation of explanations as well as documentation that would substantiate the distribution of all costs as claimed.
3. Submission of any change that may arise in the scope of work in the event that they are related to the claimed allowances.
4. Establishment of the quantity of work done through independent surveys or any other measure that the management of an organization may consider as appropriate. 

Five (5) control measures that I would consider to safeguard organization’s financial resources per legislative and organizational requirements

1. Checking of all timesheets before they are processed
2. Frequent supervision of the timesheets
3. Restricted access to the passwords. This would eliminate all unauthorized access to the payroll. It would also guarantee authorized transactions only (Australian Government, 2012, p. 11)
4. Ensuring that all employees sign for their pay to eliminate cases of non-employees turning up to collect pay and cheques which are not meant for them
5. Segregation of duties. This would ensure that some people are involved in every single transaction to be carried out. For example, one person may issue an authority for a transaction to be initiated; the next person should process the transaction while the last person should go through the records to ensure that they are correct (Australian Taxation Office, 2014, p. 23). 

The systems that can be established to ensure the statutory obligations are met and records are kept for the period determined by the rules enacted by the legislation.

1. Integrity –The systems should eliminate all kinds of unauthorized access, alteration, and destruction of the records. Security of the records should be fully guaranteed.
2. Reliability-The system should continuously operate according to the laid down guidelines and procedures
3. Comprehensiveness- The system should be capable of managing records in all the formats that have been captured by the organization.
4. Compliance- It should comply with all the environmental and business regulations as well as the expectations of the business organization
5. Systematic- The systems should capture and manage the organization’s records in a systematic manner.

The employee is aged 25 and is employed on permanent terms Daniel’s employment date was January 2016. Nominated for the award of Banking, Finance and Insurance award 2010

• The employee undertakes the following;
• Prepare reports and recommendations
• Draft routine responses
• Administers staff records
• Undertake projects
• Coordinates learning and development activities

Daniel should be paid a gross salary based on his education qualifications and achievements. His responsibility allowances should also add up to the gross salary

1. B) Calculation of Annual salary (taxable income) for the employee

All David’s salary and allowances should be taxed (taxable income)

Calculation of net pay for the employee

Gross weekly pay =$ 950

Tax withheld= $ 300

Weekly PEA for 2016 = $ 354.45

Pay remaining = $ (950 – 300) =$ 650

Deducted child’s support = $ 50

Pay remaining = $ 650 – $ 50 = $ 600

Pay remaining plus PEA = $ 600 + $ 354.45

Net pay to the employee = $ 954.45

Calculation of refund that was provided to David (an employee) by his employer after he travelled 2000 kilometres for the marketing campaign in 2016. The rate is calculated at 0.66 cents per kilometre for distances less than 5000 kilometres

Limited access

The refund is therefore calculated as follows; (0.66 x 2000) = $ 1320

Reasons why it is necessary to provide payroll data to the payroll processor within the designated timeline

1. To ensure that all the employee data is included
2. To allow adequate time to review and correct all discrepancies that may arise in the course of processing of the payroll
3. To allow enough time for the reconciliation of all payments. Irregularities can also be checked and corrected (Hernandez, 2016, p. 54) 

Payroll checks that should be undertaken before submission for authorization of wages and salaries payment

1. Hours worked by the employee- The total number of hours reflected in the payroll system should match the summary report recorded in the payroll system
2. Confirmation to ensure that the gross salaries of employees are adjusted. Some employees are paid the same salary simply because they are classified in the category of salaried employees. Payments to such employees will greatly vary if they have adjusted accordingly (Australian Government, 2012, p. 33).
3. Confirmation of employees’ taxable wages. Certain employees are exempted from certain deductions as well as federal taxes. It is, therefore, important to reconcile all the taxable wages before submission for authorization of the wages and salaries of the employees (Training consulting Aspire, 2013, p. 24).
4. Confirmation of deductions meant for a flexible account. Some employees may have decided to make deductions towards the account. It is, therefore, necessary to check and make adjustments to such deductions before the payroll is submitted for authorization. 

How to ensure that salaries, wages and deductions are reconciled according to the policies and procedures of the organisation

1. The number of employees who are to be paid by the organisation should be checked to confirm that it concurs with the number on the submitted sheets. Any case of discrepancy should be handled by the supervisor. This practise is effective in eliminating “ghost employees” from the payroll.
2. Comparison should be made to ascertain that all the time hours worked by the employees and captured in the employees payroll register concurs with the information on the time sheets. Any disparity should immediately be corrected and an investigation launched (Pieters, 2013, p. 67).
3. The number of prepared cheques must also tally with the number of employees of the organisation. This would make it completely impossible for the person in charge of the preparation of the cheques to make an additional cheque for himself or herself. It would also ensure that “ghost employees” are not paid. 

How I would deal with a query from one of the staff regarding no payment of overtime hours worked if I am a payroll staff

I would first check the reported case against the pay advice slip that had been organized by the organization to find out whether there is truth in the employee’s query or not. Irrespective of the result that I would have collected from the pay advice slip, I would move a step further and inform the supervisor about the raised issue. Any action that would be taken after that would, therefore, rest with the supervisor. Meanwhile, I would communicate back to the employee that his/ her query had been received and would be addressed as soon as possible. 

1. Declaration forms that may be needed to be completed by an employee
2. Form for tax file number declaration
3. Health declaration form
4. Information that would be needed in order to determine the amount of tax that must be withheld in accordance with the Australian Taxation office requirement

An employee’s total salary, wages and all other payments 

Four (4) periodic deductions that need to be forwarded to the respective creditors in the payroll process

1. Actual periodic deduction. It is done on monthly basis
2. Fixed periodic deduction and should be carried out at the onset of every financial year
3. Annual deduction carried out at the end of every financial year
4. Any other deduction as may be reached in a written agreement between an employee and a creditor and the details of the agreement submitted to the employer.  

Processes that I would use to prepare and dispatch Fringe Benefit Tax payment to Australian Tax Office

1. Calculation of taxable value of every employee’s fringe benefit. The calculation method may vary from one employee to another based on their benefits.
2. Calculation of the fringe benefit’s taxable value for which a GST can be claimed
3. Calculation of the benefit’s grossed-up taxable value
4. Calculation of the total taxable value from the benefits
5. The grossed-up amounts are then summed up and multiplied with the taxable value obtained from fringe benefits
6. The obtained value becomes, the employee’s Fringe Benefit Tax and is therefore submitted to the Australian Tax Office by the employer. 

Calculation of GST that would be used to complete BAS sample statements worksheet

Sales subject to GST = G1 – G5

G5 = G2 + G3 + G4

G1 = $ 30,000, G2 = 12,000, G3= 0, G4 = 0

G5 = $12,000

Sales subject to GST = $ 30,000 – $ 12,000 = $ 18,000

G9 = $ 18,000/11

GST amount owed to the tax office from sales = $ 1090.90

G12 = G10 + G11= $5,000 + $ 1,000 = $6,000

G19 = $ 6,000/11

GST on purchases= $545.45

W1 = $ 12,000

Amount withheld from W1 = $ 5,303

W2 = $ 5,303

Amount that is owed to ATO = GST on sales + PAYG tax withheld

                                                = $ 1,090.90 + $ 5,303 = $ 6393.90

Amount owed to ATO is greater than GST on purchases. The amount payable to ATO is therefore = $ 6393.90 – $ 545.45 = $ 5,848.45 

1. How to ensure that the payroll summaries (group certificates) reconciles from the salary records

This is done by checking the payroll summaries against the salary records that are kept by the organization. The supervisor should immediately be notified in the event that any discrepancy is noticed. An investigation should then be initiated to a certain the cause of the discrepancy (Australian Government: Australian Taxation office, 2014, p. 45).

Functions of the PAYG Payment Summary Statement in preparing the final payroll report to the ATO?

The PAYG Payment Summery statement provides a back-up data during the preparation of the final payroll report to the ATO. In the event that there is any loss of data during the final payroll report then, the organization would simply obtain the data from the payment summary statement.  

Establishment of electronic security

Policies and procedures documenting the steps undertaken to establish and create an accurate payroll system

The employer should obtain a registration number.

This number should be obtained from revenue commissioners even before an organization hires employees. The number is essential when return is being filled.

These policies should be those of the contract details between the employer and the employee, anti-harassment policy, payment periods e.g. weekly or monthly, rules of payment during absences among many others (Bragg, 2014, p. 87)

Administration of payroll requires a lot of accuracy. An organization should therefore identify a payroll system that would work best for its employees.

The payroll should then be run.

The payroll is run once all the necessary forms and information are available.

It is a requirement by revenue commissioners that employers should keep some records e.g. PAYE deductions for some longer periods of time

It is necessary to file all the employees’ taxes online. Employers are obligated to ensure that they submit tax return on behalf of their employees. The tax return should be submitted in time and before the second half of the month (Frost, 2015, p. 45).

The payroll should be reviewed to ensure that there are no discrepancies whatsoever. It should be able to meet the needs and expectations of the organization. 

Policy and procedures that ensure the confidentiality and security of payroll information

Organization’s departmental layout may greatly compromise the security and confidentiality of the payroll. The computer screens within the department should be placed such that unauthorized persons don’t get access to the information that is presented on the screens during the payroll processing. The doors of the payroll department should also be kept under key and lock at all times. Only authorized persons should get access to the documents meant for payroll processing.

The organization should put measures in place to ensure that the individuals who work in the payroll department have limited access to the information related to employees’ payroll (Australian Government, 2012, p. 23). There should be a lot of supervision in the department to ensure that confidentiality of other employees’ information is safeguarded.

Since the payroll is electronically operated. It is important to install a firewall to guarantee the security of the databases and systems. Passwords should also be put in place to increase the security of the computer systems further.

Proper procedure should be created to be followed by external inquiries. Such inquiries may compromise the security of the payroll if proper channels to be followed are not put in place. All payroll employees should also be trained on the channels that should be followed before any employee’s personal information is released to an external body (Mark, et al., 2011, p. 67).

Guidelines should be put in place to ensure that essential documents and information are properly disposed of. Security may be breached if great care is not taken during such disposal.

Policy and procedures that guarantee substantiation of claims for allowances

1. Inclusion of installation costs only if they are to form part of the claimed allowances. If not, then the installation costs should be done away with
2. Any change related to the claimed allowances should be submitted. This should happen if such changes arise in the course of work
3. Proper records and documents should be prepared to explain the distribution of all the claimed allowances
4. The quantity of work done should be established through surveys and other methods that are deemed appropriate. 

Policy and procedure which establishes a system to ensure statutory obligations are met and records are kept for the period determined be government legislation

1. Integrity- The security of the records should be upheld at all times. All unauthorized access to the records should be eliminated
2. Reliability- There should be guidelines and procedures that should be followed when accessing the records.
3. Comprehensiveness- The system put in place by the organization should be such that it is able to manage records in all the formats that the organization may prefer.
4. Compliance- The system should be in compliance with existing business and environmental rules and regulations that have been put in place
5. It should comply with all the environmental and business regulations as well as the expectations of the business organization
6. Systematic- All the organization’s records should be captured by the system in an organized way 

Reference list

Australian Government: Australian Taxation office, 2014. How to calculate your FBT, Sydney: Australian taxation office.

Australian Government, 2012. Australian Government: Department of Education, employment and workplace relation-Manage payroll, Sydney: Industry Skills Councils.

Australian Taxation Office, 2014. Lodging your PAYG withholding annual reports online, Sydney: Australian government.

Bragg, S. M., 2014. Accounting for Payroll: A Comprehensive Guide. s.l.:John Wiley & Sons.

Frost, S., 2015. Procedures to Ensure the Security of Payroll Information. Chron, p. Chron.

Hernandez, S., 2016. Official (ISC)2 Guide to the CISSP CBK. s.l.:CRC Press.

Mark, K., Weygant, R. S., Rosen, H. J. & Regener, J. R., 2011. Construction Specifications Writing: Principles and Procedures. s.l.:John Wiley & Sons.

Pieters, D., 2013. The Social Security Systems of the States Applying for Membership of the European Union: (Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia and Turkey), Sydney: Intersentia nv.

Training consulting Aspire, 2013. Managing payroll, s.l.: Aspire training and consulting.