question paper - iab.org.uk2).pdf · of gross pay into the computerised payroll system 3.1 input...

Qualifications:

Level 3 Diploma in Payroll (QCF) (601/0732/7) Level 3 Certificate in Computerised Payroll for Business (601/0483/1)

Paper No: A1014 (2)

Question Paper Unit 3407: Computerised Payroll Administration L5051391

LIVE (1) ASSESSMENT MATERIALS

2016/17 Tax Year

Time suggested: 3½ hours International Association of Bookkeepers, Suite 5, 20 Churchill Square Kings Hill West Malling Kent ME19 4YU Tel: 01732 897750 Fax: 01732 455848 email: [email protected] CH 01.17 V1

mailto:[email protected]

IAB L3 Comp Payroll Skills Test (QCF) 2016/17 1

Title: Computerised Payroll Skills

Level: 3

Credit: 8

Learning Outcomes

- the learner will

Assessment Criteria – the learner can COVERAGE

1 Be able to set up a computerised payroll system

1.1 Enter company data and legislative parameters into commercial payroll software in accordance with company policy 1.2 Maintain the company data and legislative parameters in accordance with company policy and updated payroll legislation ensuring verification of the information to be changed 1.3 Enter pension scheme information in accordance with company policy

Task 1 Task 1 Tasks 1 and 2

2 Be able to set up employee records and payroll data in a computerised payroll system

2.1 Create employee records within the payroll software from given information e.g. Human Resources information, contract of employment, P45. 2.2 Maintain the employees payroll records ensuring that all changes have been correctly authorised by either the employee, employer or statutory body

Task 2 and 4 Implied Task 2 Tasks 3, 5 and 6

3 Be able to enter details of gross pay into the computerised payroll system

3.1 Input elements of basic gross pay for weekly and monthly paid employees from given information e.g. timesheets, summaries, salary information, hourly rates 3.2 Input overtime details from given information 3.3 Input additional gross pay information e.g. commission and bonus payments, lump sums, unsocial hours and shift payments 3.4 Deal with net payments 3.5 Deal with holiday pay information in an appropriate way 3.6 Input all elements relating to a leavers gross pay including redundancy payments

Tasks 3, 7 and 8 Tasks 3 and 7 Tasks 3, 7 and 8 Task 7 Task 7 Task 7

4 Be able to enter voluntary and statutory additions and Deductions

4.1 Input information relating to voluntary deductions ensuring that the correct authorisation has been given e.g. company loan repayments, savings scheme, Payroll Giving, social clubs, pension contributions 4.2 Input information relating to statutory deductions ensuring that the correct authorisation has been given e.g. Student Loan repayments, AEOs and DEOs 4.3 Input all information relating to statutory additions to pay:

Pay

Tasks 3, 7 and 8 Tasks 3, 7 and 8 Tasks 7 and 8

5 Be able to process the payroll

5.1 Process gross pay, standard pre and post-tax Deductions in accordance with company policy and legislative requirements 5.3 Process the final pay run for a leaver 5.4 Produce internal period end reports including payslips, P11 Deduction Sheets, payroll summaries and analysis in accordance with company requirements 5.5 Be able to calculate the cost of wages to the employer

Tasks 3, 7 and 8 Task 7 Tasks 3, 7 and 8 Not Covered but Cost of Pensions included


6 Be able to produce reports to enable reconciliation of payments and deductions to external agencies

6.1 Produce form P45 for a leaver 6.2 Explain what is required to complete the period end routines for the tax authority 6.3 Produce period end forms from the payroll software 6.4 Reconcile payments to the tax authority and other statutory bodies 6.5 Outline on-line filing requirements

Task 7 Implied Task 10 Task 10 Task 10 Task 10

7 Understand how and why payroll data is maintained

7.1 Explain the importance and need for backing up the payroll data at regular intervals 7.2 Describe how to back-up and restore payroll data 7.3 Explain the need for data security and the various methods used to ensure security of all payroll data 7.3 Understand the importance of updating the payroll software and the e-submission module.

Task 11 Not covered Not covered Not covered


General Instructions

Your answers should be written in either black or blue ink. Your work should not be completed in pencil.

2 marks may be deducted if your work is not neat and well presented

Up to 4 marks may be deducted if your reports are not presented in the correct order

All tasks should be answered using a payroll software package setup for the 2016/2017 Tax Year

PAYE deductions should be calculated using the income tax legislation as at April 6th 2016

National Insurance Contributions should be calculated using either NIC Table A (CA38), NIC Table C (CA41), NIC Table M (CA38) as appropriate

Scenario

You are the Payroll Manager for James Jamboree Ltd, a small department store, where it is your task to administer the payroll for the company. You will be dealing with the wages for one of the departments, Small Electrical, which has three sales staff and a manager. You will also have to process the salary for the Sales Director. The director and manager are paid monthly, directly into the Bank, by BACS, whilst the wages of the three other members of staff are paid cash each Friday for the hours worked in the previous week. You have been given the monthly employee data for the year to date as at 30th December 2016 which is Month 9, whilst the weekly employee data for the year to date as at 30th December 2016 (Week 39).


Company Information:

COMPANY DETAILS

Company Name James Jamboree Ltd

Address 125 The High Street

Kirkcaldy

Fife

KY1 1JP

Telephone: 01592 221221

Fax 01592 221222

Email [email protected]

Tax Office Glasgow Tax Reference 120/J0123

BANKING DETAILS

Company Bank HSBC plc

15 The High Street

Kirkcaldy

Fife KY1 1JR

Account Name James Jamboree Ltd

Account No: 01140931

Sort Code 40-14-27

BACS Ref: JJL

FINANCIAL ANALYSIS

DEPARTMENT COST CENTRES

1 Directors M Monthly Paid

2 Managers W Weekly Paid

3 Sales Staff

COMPANY PENSION SCHEME

SCHEME DETAILS PROVIDER DETAILS

Description JJ1 Name Scotland Financial Services

Type Stakeholder Address 51 Castle View

Edinburgh EH2 2DQ ECON 3333333L

Employee Contribution

3.75%

Employer Contribution

5.00% Contact Name Cameron Dunnoch

Company Pension Administrator

Sara James Email Address [email protected]

Email Address [email protected] Telephone 0131 2257788

Telephone 07781 311843 Payment Method Cheque

Pension Provider Other

Scheme Reference JJ0123

NOTES:

Contributions based upon Basic Gross Pay only. Employees need to have been employed for 3 months continual service with James Jamboree Ltd to be accepted onto the scheme


Additional Information:

Gordon Hands is the Sales Director and has elected to have his NICs deducted using the “Director” method”.

Monthly paid employees also have an account with the same branch of HSBC in Kirkcaldy.

The company administers direct contributions to an HMRC approved ‘Payroll Giving’ Scheme, based on their basic gross pay only.

Any employees who are members of the scheme contribute at the rate of 2.75% of their basic wage/salary.

Employees are able to contribute to a savings scheme operated by the company. Monthly employees will save at the rate of £75 per month and weekly paid staff will save at the rate of £15.00 per week

The sales staff will receive commission if the department exceeds the sales target for the previous week. The amount of commission each of them receives is 4% of their basic weekly salary.

The Sales Director and the Departmental Manager receive a monthly bonus payable at the rate shown on their employee details, provided the monthly sales target has been achieved.

All staff, except the Sales Director work Monday to Sunday with 2 consecutive days off during this time. The shop opening hours are 9.00am until 17.30pm however the staff are all paid from 08.45am until 17.45pm to allow for completing the till routine at each end of the day. Occasionally they are required to work one of their days off, for which overtime is paid at the rate of time and a third (1.33) and is calculated to 2 decimal figures (rounded up).

All employees have 1 hour for lunch, which is unpaid.

Becky Hardwick, who is the departmental manager, is the First Aider and receives an additional payment of £75 a month for carrying out this role

For weekly paid employees the company pays only statutory payments for Maternity, Paternity or Adoption leave and, as a small company is entitled to reclaim Small Employers Relief (SER). Monthly paid staff have their statutory payments made up to their basic rate of pay

Only pay designated as BASIC PAY is included in the calculation of pension contributions or Payroll Giving. Any Statutory payments are not to be included

All weekly paid employees receive their pay in cash. The Cash Analysis does not include £50 notes or £2 coins


Employee Information

Employee Details

Works Number:

Employee Name:

Address:

037

Gordon Hands

14 The Tythe

Kirkcaldy

Fife

KY5 6OP

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

16th January 1975

1st May 2002

Male

Married

K46

JB 976342 C

Year to Date Figures £ £

Total Gross Pay

Gross Pay for NIC

Gross Pay for Tax

Tax Paid

26756.28

26756.28

26062.26 5765.60

Employee’s NIC

Employer’s NIC

Employment Type

NI Table

2243.55

2572.91

FULL TIME

A

Bank Details

Account Name:

Account Number:

Sort Code:

Payment method:

Mr G Hands

01154619

40-14-27

BACS

NB: You do not need to complete the Bank Address field in the employee record

BACS Reference:

JJL051

Additional Information

Department:

Salary:

Monthly Bonus:

Contracted Hours:

Directors

£33,650.00

1.25% of Monthly Sales Target

175 per month

Job Title: Sales Director

Member of the Company Pension Scheme

Contributes to Payroll Giving scheme

Employee Details

Works Number:

Employee Name:

Address:

043

Becky Hardwick

16 Greenfields

Kirkcaldy

Fife

KY3 6LR

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

10th April 1980

1st May 2002

Female

Single

855L

YA 235623 D

Year to Date Figures £ £ £

Total Gross Pay

Gross Pay for NIC

Gross Pay for Tax

Tax Paid

22312.50

22312.50

22312.50

3178.60

Employee’s NIC

Employer’s NIC

Employment Type

NI Table

1951.74

2239.56

FULL TIME

A

Bank Details

Account Name:

Account Number:

Sort Code:

Payment method:

Ms B Hardwick

01154589

40-14-27

BACS

NB: You do not need to complete the Bank Address field in the employee record

BACS Reference:

JJL002


Department:

Salary:

Monthly Bonus:

Contracted Hours:

Manager

£27,500.00

0.75% of Monthly Sales Target

175 per month

Job Title: Manager

Member of the Company Pension scheme

Pays into the Savings Scheme. Departmental First Aider


Employee Information (continued)

Employee Details

Works Number:

Employee Name:

Address:

057

Peter Marsh

54 Edinburgh Street

Kirkcaldy

Fife

KY2 8DF

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

25th September 1985

19th December 2007

Male

Single

935L

JT 167176 A


Total Gross Pay

Gross Pay for NIC

Gross Pay for Tax

Tax Paid

12567.50

12567.50

12235.05

1043.00

Employee’s NIC

Employer’s NIC

Employment Type

NI Table

782.73

894.66

FULL TIME

A


Department:

Job Title:

Hourly Rate:

Overtime Rate:

Contracted Hours:

Method of Payment:

Sales Staff

Sales Assistant

£7.95

£10.57

40 per week

CASH

Contributes to the Payroll Giving Scheme

Employee Details

Works Number:

Employee Name:

Address:

075

Casa Dafiaga

33 Stubbington Avenue Kirkcaldy Fife KY3 4KL

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

23rd November 1998

9th April 2015

Female

Single

1100L

JB 598713 C


Total Gross Pay

Gross Pay for NIC

Gross Pay for Tax

Tax Paid

12093.12

12093.12

12093.12

767.00

Employee’s NIC

Employer’s NIC

Employment Type

NI Table

725.79

NIL

FULL TIME

M


Department:

Job title:

Hourly Rate:

Overtime Rate:

Contracted Hours:

Method of Payment:

Sales Staff

Sales Assistant

£7.65

£10.17

40 per week

CASH

Pays into the Savings Scheme


Employee Details

Works Number:

Employee Name:

Address:

041

Len Stafford

197 Meridith Road

Kirkcaldy

Fife

KY2 0BS

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

13th April 1950

1st May 2002

Male

Married

BR

ZY 133441 B


Total Gross Pay

Gross Pay for NIC

Gross Pay for Tax

Tax Paid

13832.00

13832.00

13832.00

2766.40

Employee’s NIC

Employer’s NIC

Employment Type

NI Table

Nil

1068.99

FULL TIME

C


Department:

Job Title:

Hourly Rate:

Overtime Rate:

Contracted Hours:

Method of Payment:

Sales Staff

Senior Sales Assistant

£8.75

£11.64

40 per week

CASH


Len has submitted his Birth Certificate as evidence of his age

NB: Candidates should not check YTD figures.

Without knowing the employees’ personal circumstances throughout the Tax Year it is impossible to check the YTD figures accurately. Candidates should not attempt to reconcile the YTD figures

given. The paper will be marked in the belief that candidates have used the YTD figures stated.

You are required to complete all of the following Tasks.

TASK 1

Set up the company information ensuring that the software is set up for the Income Tax and NI parameters for

tax year 2016/17

Candidates are required to compare the legislative information with that given in the Answer Booklet. If the information shows any discrepancies the parameters should be corrected before continuing.

Required:

Print reports detailing: Income Tax bandwidths.

NI Rates for Tax Year 2016/17

Company details.

Company Pension Scheme (page 1 only).

Pension Provider (page 1 only).

4 marks


TASK 2

Enter the both of the directors and all the employees’ personal details, pay and deductions elements onto the

computerised system.

Candidates are required to ensure that the Employment Type and contracted hours are entered onto the employee record in order to comply with RTI requirements Required:

Print reports detailing: Employee Details (Personal)

Employee Details (Cumulative)

Employee Contracted Hours for RTI

17½ marks

TASK 3 It is the 3rd January 2017 and time to process the payroll for the weekly paid. The following information should

be taken into consideration:

The sales target was exceeded, so the weekly paid staff will receive their commission

Notification of a change of tax code has been received for Becky Hardwick. The new code of

1010L/Wk1 should be applied with immediate effect

You have received a Student Loan notification for Peter Marsh to be applied from today’s date. He

is to have repayments based on Plan 1.

Required:

Using the Gross Pay information given on page 3 of your Answer Booklet process the Payroll as at

6th January 2017 (Week 40)

Print a Payroll Summary(ies) using a ‘landscape’ format, for Week 40 to include Employer’s NIC

Print a Cash Analysis for Week 40, this must show the total net pay due to each employee

16½ marks TASK 4 – New Employees

It is the 6th January 2017. You have been informed that James Jamboree Ltd has taken on two new

employees. David Preston is to work in the warehouse sorting out the small electrical items that have been

received by James Jamboree and package up any that need to be delivered to customers. Pragma Karimi has

been employed part time as the Departmental Administrator responsible for recording all the sales and

purchase transactions for the department. You need to enter their employee details onto the payroll system.

The following information must be taken into consideration:

Both employees started work on the 2nd January 2017

David has handed in his P45, which shows that his Tax Code is 1100L on a Non-Cumulative basis.

Pragma has completed a new starter form, on which she has ticked Statement C as she also works

elsewhere


NB: Both employees are classed as Sales Staff for Departmental Analysis as they work solely for

the Small Electrical Department

Required:

Enter David and Pragma’s details onto your computerised payroll system

Print a report showing David and Pragma’s personal details only

Print a report detailing the employees’ contracted hours for RTI

4 marks

Employee Details

Works Number:

Employee Name:

Address:

108

David Preston

10 Cairngorm Heights

Kirkcaldy

Fife

KY4 9HG

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

2nd March 1975

2nd January 2017

Male

Married

1100L/Week 1

TR 665987 B

Pay Information

Department:

Hourly Rate:

Overtime Rate:

Sales Staff

£7.47

£9.94

Job Title: Warehouse Operative

Payment Method CASH

Employment Type FULL TIME

Contracted hours: 40 per week

Previous Employer Details

Starting declaration

Previous Emp. Ref

Date left employment

P45 - STATEMENT B

472/H1478

16th December 2016

Tax Code at Leaving

NI Category

1100L/Week 1

A


Employee Details

Works Number:

Employee Name:

Address:

109

Pragma Karimi

66 Dunbar Road

Kirkcaldy

Fife

KY4 9RS

Date of Birth:

Start Date:

Gender:

Marital Status:

Tax Code:

NI Number:

23rd April 1981

2nd January 2017

Female

Single

BR

NB 586793 C

Pay Information

Department:

Hourly Rate:

Overtime Rate:

Sales Staff

£7.23

N/A

Job title:

Payment method:

Employment Type:

Departmental Administrator

CASH

PART TIME

Contracted hours: 21 per week


TASK 5

It has been discovered that the working pattern for each of the employees has been incorrectly input on their

employee record, which will affect any statutory payments due to them. Below is a list of the days they work:

Gordon Hands: Works Monday to Friday only

Becky Hardwick: Works Tuesday to Saturday

Casa Dafiaga: Works Monday to Sunday but has Wednesday and Thursday off

Pete Marsh: Works Wednesday to Sunday

Len Stafford: Works Sunday to Thursday

David Preston: Works Monday to Friday only

Pragma Karimi: Works Monday, Wednesday and Friday

Required:

Input these details into the system

Print a report showing the employees SSP Qualifying Days Pattern

4½ marks

TASK 6

You have been informed that Becky Hardwick has been promoted to a director from the 1st January 2017 and

has elected to pay NIC by the ‘Director’ method. Becky has been given a new company car, which is used for

both business and personal use. The details are as follows:

The car is a Ford Focus 5 door, 1.6 Litre, registration number ED 66 JJL, first registered 1st January

2017 and delivered to her on 2nd January 2017. It has a 1600cc petrol engine which is currently

146 g/km emissions and no fuel is provided for personal use. The list price of the car when new

was £20,400 with no additions and Becky has made no personal capital contribution

Required:

Input these details into the system

Print a report detailing the company car details (P46)

3 marks


TASK 7

On Wednesday 11thJanuary 2017 you process the payroll for the weekly paid employees, this will be for the

hours worked up to the 8th January 2017 and is to be paid on Friday 13th January 2017. The following

information should be taken into consideration:

The sales target has again been exceeded for the previous week

Peter Marsh has been off sick, he reported in sick on Wednesday 4th January 2017 and has not yet

returned to work. His Average Weekly Earnings are £330.72. NB: he will not receive any commission

this week as this is only paid when he is in work.

Casa Dafiaga received £2,500.00 as a company loan at the end of December; her repayments are set

at £25 per week.

Casa Dafiaga has worked an extra 12 hours this week for which she is to receive Overtime Pay

Pragma has also had to come into work for an extra 3.5 hours for computer training, for which she will

be paid a fixed amount of one sixth (1/6) of her normal weekly wage

David Preston has worked a basic week and has decided to join the Savings Scheme. The first

deduction should be made from this weeks’ pay

Gordon Hands has received a message that Len Stafford has died suddenly, therefore it is necessary to

finalise his pay. He is due to be paid for the hours worked in the previous week, two weeks

commission, a week in arrears and also he has 43.5 hours holiday entitlement left. As a gesture of

goodwill to Len’s widow James Jamboree has agreed to pay the holiday as a Net Payment. There is

also a repayment of the money that he has paid into the Savings Scheme each week since 6th April

2016, this should be entered as a negative deduction

Required:

Finish completing the Gross Pay table on page 4 of your Answer Booklet by calculating the Weekly

Commission, Overtime Pay, Holiday Pay, Statutory Sick Pay and Gross Pay where appropriate,

along with Len Stafford’s Savings Scheme Refund

Using this completed Gross Pay information process the Payroll as at 13th January 2017 (Week 41)

to include Employer’s NIC

Print a Payroll Summary(ies) using a “landscape format” for Week 41 to include Employer’s NIC

Print Payslips for all the weekly employees as at Week 41, Casa’s must show her loan repayment

Print a Cash Analysis for Week 41, this must show the total net pay due to each employee

Print a report to show the Loan made to Casa Dafiaga and her repayments

Print out a P45 for Len Stafford

Print out a P11 (PAYE) for Len Stafford

30½ marks


TASK 8

It is 26th January 2017 and time to calculate the Gross Pay due to the monthly paid employees for payment

on 30th January 2017 (Month 10).

Gordon’s wife has just given birth to a baby and he ended work on 14th January 2017 to start his

Paternity leave returning on 29th January 2017. Gordon has met all the necessary criteria to claim

Statutory Paternity Pay

He is to be paid any statutory payments due to him with the company making-up this amount to his

basic pay. His average pay for SPP is £513.16 per week or £2229.69 per month

The Sales target of £48,375.00 for the Month end of December was met so both Gordon and Becky will

be paid their bonus this month

NB: Don’t forget that Becky Hardwick has been promoted to a Director as from the 1st January 2017

and, as such, the way in which her NI is dealt with will change

Becky Hardwick has been issued with an AEO for non-payment of £275.00 Council Tax. The company

will apply the £1.00 Admin Fee

Required:

Calculate the Gross Pay for each employee for 30th January 2017 (Month 10), using the Table on page

5 of your Answer Booklet and information given in the Scenario and above

Process the payroll for Month 10 as at 30th January 2017

Print out a payslip for Gordon Hands and Becky Hardwick, Gordon’s payslip must show his SPP

Print a Payroll Summary(ies) using a “landscape format” for Month 10 to include Employer’s NIC

Print a BACS Report to show total due to all employees

25 marks

TASK 9 Gordon has asked for some employee costings for the workforce including Pension costs. He would like you to

produce a Departmental Analysis of Pay.

Required:

Print a Departmental Analysis of Pay to Date for James Jamboree Ltd for Month 10, this must include

all employees

On page 6 of your Answer Booklet, calculate the Cost of Pension contributions for month ending 30th

January 2017 using the information given in the Scenario

Enter the Cost of Net Payments for Len Stafford’s Holiday Pay in the space provided on page 6 of your

Answer Booklet

4 marks


TASK 10

As it is the end of the month, it is time to pay HMRC any Tax, NIC and Student loan due, along with any

payments due to the Pension Company.

NB: James Jamboree Ltd may be able to reclaim some Statutory Payments.

Required:

Print a P32 for January 2017 (Month 10 only)

Complete the tables on page 7 to check that the total payment due to HMRC as given on the P32 is

correct

7 marks

TASK 11 Using the space on Pages 8 and 9 of your Answer Booklet, answer the following questions:

a) By 2018, every employer must review its workforce to identify which of their workers are to be

automatically enrolled into a qualifying workplace pension scheme, into which the employer must

contribute. The Government will also pay into it, in the form of tax relief. Workers who qualify to be

automatically enrolled are known as 'eligible jobholders'. Outline the procedure necessary for eligible

workers to enrol in this scheme.

b) Explain how an employer is able to claim the Employment Allowance, which has been available from 6

April 2014. You should include the current value of the Employment Allowance in your answer

c) What is the purpose of the Employer Payment Summary (EPS)

d) Explain why it is necessary to carry out regular Backups

e) Print a Back Up and Restore Log

9 marks

END OF EXAMINATION

question paper - iab.org.uk2).pdf · of gross pay into the computerised payroll system 3.1 input...

Documents