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HUMAN RESOURCE MANAGEMENT BUSINESS ACTIVITIES

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HUMAN RESOURCE MANAGEMENT BUSINESS ACTIVITIES

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The amount of tax deducted from each employee's earnings by the employer and the total of their earnings for a year have to be shown on a summary statement.

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It is necessary that details of the earnings of each employee over a certain period of time are maintained for the purpose of remitting tax and other deductions under authorisation from the employees and requirements of law.

These details are kept on an employee earnings record.

When periodical (i.e monthly) remittances are made of the authorised deductions, there has to be a remittance advice detailing each employee's contribution.

Information for the remittance is obtained from the employee earnings record.

the details on the earnings record are similar to those on the payroll register, except for the first columns.

These columns are replaced by a single column titled 'Pay week ending' where the date on which the week ends is recorded.

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                 📌Overcoming Payroll Irregularities📌

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                 📌Overcoming Payroll Irregularities📌

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Common irregularities :-
(i) Improper Recruitment

hired employee is subsequently found to be criminally minded.

* clearly defining the required qualifications and skills in the position description.

(ii) Noncompliance with employment law

workplace conditions should be maintained as per the workplace health and safety legislation of the relevant State.

* requires employers properly notify employees of various provisions of the law.

(iii) Unauthorised changes

being paid the wrong amount.

*system should be designed with sufficient controls in place.

(iv) Inputting the wrong data

theres inaccuracy in the original records and effect employee morale.

* use programs that perform validity checks (include monitoring employee identities and conducting an input range check)

(v) Inaccurate calculations

calculation errors in payroll processing

* payroll is automated and the calculations are tested and thoroughly scrutinized.

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Disbursement of PAYG and other deductions

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Disbursement of PAYG and other deductions

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The taxes deducted under the Pay As You Go(PAYG) withholding system have to be forwarded to te ATO by the stipulated due dates in order to avoid any penalties.

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SYSTEM FLOW CHARTS

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The payroll calculations are facilitated by using books or sheets of paper that are subsequently bound into books and stored for future reference.

These books are known as payroll register.

The first four columns of the register are completed using permanent information.

Hours of work and commission/incentive columns (current information)

Allowances (either permanent of current information)

Deductions columns (permanent information except for tax)

The tax (Pay As You Go withholding tax) on gross pay is determined using tax tables provided by the Australian Taxation Office or computed using the formula provided by it.

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number of hours worked at the normal rate

number of hours worked at overtime rate

sick leave, annual leave, long service leave

commission

incentive payments

* This information is obtained from production department and the HRM department.

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                 💻 Computer Application System 💻

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                 💻 Computer Application System 💻

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-> Saves clerical labour.
-> Reference to permanent records occurs electronically. (Saving enormous amount of time in the case of a large payroll)
-> Printing of pay advice can be automated by using a command. For example :-
i) coinage analysis (mode of payment)
(ii) the cheques (form of payment)
(iii) the bank advice giving particulars on employees' name, account number,and amount when bank transfer is the form of payment.
-> Employee's earnings record is updated automatically on completion of the calculation of the net amount payable for the pay period.
-> Payment summaries are printed by the computer from the updated employee earnings records.
-> Reduces clerical handling mistakes.

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DETERMINATION OF EMPLOYEE AUTHORISED DEDUCTION

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DETERMINATION OF EMPLOYEE AUTHORISED DEDUCTION

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•In Malaysia compulsory deduction -EPF & SOCSO, encourage - tax deduction

•may request deduct and remit periodically to an organisation on their behalf. Employer - collector on behalf of the external organisations  -must issue a schedule - show the employee’s name, ID numbers, amount remitted on behalf of the employees and the period of payment

•Examples:

1. PCB – LHDN tax deduction

2. private medical fund payments

3. mortgage payment

4. Income zakat

5. Registered sociaties à union fees etc.

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Employee's name

identification number ( payroll/clock number)

rate of pay

* This information is provided by the HRM section or department.

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The permanent and current information provides the data for input to the payroll system and is used to obtain the output, which is the payment due to the employees.

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•US, UK, AUS ->Employer as tax collector ->withhold appropriate amount of tax from each employee’s pay
-> pay to Inland Revenue.

•Malaysia -> encouraged -> Monthly tax deduction (MTD) or potongan cukai berjadual (PCB)

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• Responsible for hiring personnel

• Advertises and assists in the selection process

• Facilitates allocation of people

• Involved in personnel development and performance

• Employee discipline and terminations

• Objective is nurture motivation to maintain profitability and flexibility for long-  term business survival by achieving:

1. organisational productivity

2. increased quality of work

3. improved quality of working life

4. statutory and legal compliance

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•permanent details of employees -> employees register -> inspected by employee and Ministry

•Any additions, deletions or changes -> should be properly authorised and approved.

•Permanent information kept on a record card:

*permanent records include personal details, details of terms and conditions of employment and details of wages and allowances earned during each wage period.

•Payroll register and earnings records:

*details of wages paid to date in current payroll period.

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                     🔌Internal Control Procedures🔌

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                     🔌Internal Control Procedures🔌

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i) Hire appropriately approved persons, in accordance with management criteria.

ii) Maintain time records and approve times worked by authorised person (sectional supervisor)

iii) Distribution of pay envelopes is to be done by responsible officer who identifies the recipient.

iv) Payroll registers are to be serially numbered.

v) Signatory of cheques is to check the payroll register before authorising cheques

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1.Hard HRM

*financially, hard-nosed

*focus directly on  the bottom line.

*Utilitarian

*Privilege to management

2.Soft HRM

*opposite to hard HRM

*Use concept of developmental humanism
*Assist employees to improve, expand experiences and education, rather than terminations.

*regard all employees as assets that help to build a sustainable competitive advantage for the firm.

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1) Employer
2) Time Recording
3) Payroll Preparation
4) Payments to employees

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1. M/S 341-343 = ALIFAH
2. M/S 344-346 = SITI
3. M/S 347-349 = NAD
4. M/S 350-352 = MARSHA
5. M/S 353-355 = AMY
6. M/S 356-359 = ANNA

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-System that deals with calculation and payment of remuneration to employees.

-Carried out by payroll department or payroll section
-Remuneration consists of wages and salaries.