BPPM LogoFail to Plan -- Plan to FailFail to Plan -- Plan to Fail
Project Plans Project Planning Course BPPM Blog Posts Project Planning Tools & Techniques

Home

Payroll Processing

Here are the 5 basic steps required to process payroll for employees:

1.Masterfile Data

Master data is the information held on the system that supports the operation of payroll. Master data management involves the collection of employee data and the incorporation of rules to eliminate incorrect data from entering the system.

 

a.Register your business as an employer with Revenue for the purposes of paying employess.

b.Record employee masterfile data on to your payroll system from Employee Set-up Form.

Employee data required for Payroll and HR purposes is held as Employee Masterfile.

Employee Set Up Form

c.Record employer payroll masterfile data on to your payroll system.

Employer Masterfile Data

d.Record the specifications and rules underpinning your attendance and payroll calculations.

Work Schedule Rule

A Work Schedule Rule is a precise specification of the rules associated with a work schedule.  A work schedule rule is assigned to a Daily Work Schedule. The reason for creating more than one work schedule rule for a Daily Work Schedule is that different payroll rules may apply to a person’s rostered hours on a weekend as opposed to a weekday.

Note:

1, Time + 1/5 is paid for hours worked on Saturday and Sunday in this sample company.
2. Breaks for this sample company are outlined for each Work Schedule.
 

             

Work Schedule Rules

 

2.Time and Attendance

a..Assign Daily work schedules to employees to make up a weekly roster to display.

Roster

b.Determine hours to be paid for shifts worked as specified in sample Daily Work Schedules.
c.Associate Work Schedule Rules to the daily work schedules to conform to company rules and working time acts.
d.Automatically produce Time & Attendance Register by integarating the Roster and the Daily Work Schedules with the associated work schedule rules.

Time and Attendance is the one part of payroll that is generally maintained and operated in-house, while Payroll Master Data, Gross to Nett, Statutory Requirements and Reporting are often Outsourced to a Payroll Provider.  I have come across businesses that get bogged down with time & attendance recording largely due to duplication of effort. When the process is integrated as in my sample, a basic hours control account can be produced automatically for comparison with the outputs from an outsource payroll provider.

3.Gross to Nett Payroll

1.Gross pay is automatically determined from time and attendance recording system and hourly pay rates from master data.
2.All required documents for tax, PRSI and USC deductions are automatically copied in to the Gross to Net Sheet.
3.Formula incorporating statutory deduction rules are attached within the cells of the Gross to Net worksheet to calculate taxes and PRSI.
4.Nett Pay is calculated and displayed in respect of each employee.
5. Employers PRSI in respect of each employee is also calculated and added to gross pay to determine total cost to employer.

Payroll calculations to determine net pay can be tested on a Payroll Calculator.

Net Pay Calculator 2019



 This is a useful tool for employees who wish to check their net pay.

4.Process Employee Payments Via EFT

Pay the net pay amounts to employees directly to their bank accounts using SEPA BOI Format rules to create a BOI SEPA EFT.XML file. This BPPM electronic funds transfer (EFT) is an application that generates Single Euro Payments Area (SEPA) compliant debit and credit payments via XML file for uploading to your bank

SEPA EFT File

5.Statutory Requirements

On or before you make a payment to your employee, you must report the payroll information to Revenue. If you use payroll software, there are two methods of reporting payroll in real time:

1.Direct Payroll Reporting, allows payroll software to communicate seamlessly with Revenue Online System (ROS) and exchange the required information.
2.ROS Payroll Reporting, allows you to use files created by payroll software and upload these through ROS.

If you do not use payroll software, you can get Revenue Payroll Notifications (RPNs) and complete a form through ROS. You may be exempt from the obligation to pay and file electronically. If you are, then customised stationery will be provided to you to file submissions and make returns. Employers must Submit Income Tax, Pay Related Social Insurance, Universal Social Charge and Local Property Tax withheld to the Revenue Commisioners within:
 

●14 days after the end of each month

●23 days after the end of the month if you file the return and pay the tax on the  Revenue Online Service (ROS).

Pay Modernisation

PAYE Modernisation involved reform of the PAYE system and was effective from 1 January 2019.  Now for the 1st time Employers were required to report their employees’ pay and deductions to Revenue in real time. Employers must ensure that correct business processes are in place to meet the requirements and ensure Income Tax, Pay Related Social Insurance, Universal Social Charge and Local Property Tax are deducted and paid over correctly. As a result of these changes many small businesses chose to go down the route of outsourcing their payroll. It is for this very reason that I wrote the Article on  "Choosing A Payroll Provider".


Facebook Logo   Youtube Channel    Linkedin-Logo   Google My Business Logo

Copyright BPPM 2012 - 2020 BPPM CRO Reg. No. 463423