Final Project – Payroll Administration
Part A
Question #1
List 6 taxable benefits that you learned about during this course. (6 marks)
Taxable Benefit Mark
vacation trips /1
Meals /1
Gift Cards /1
Event tickets /1
Club memberships /1
group insurance premiums from the employer /1
Total Marks /6
Question #2
List the statutory deductions in order of requirement. (6 marks – to receive marks you must list all 6 and they must be in the correct order)
Statutory Deductions Mark
Pension related charge /1
Universal social charge /1
Pay related social insurance /1
Pension contribution /1
Taxes Payable /1
Employment Insurance /1
Total Marks /6
Question #3
You have just joined the payroll department as the newest Payroll Administrator. Everyone else on the team has been there for a number of years, so the Payroll Manager is excited to have a fresh pair of eyes. The Payroll Manager has assigned the following task to you to help you become more familiar with the company.
She would like you to review all the pay codes set up in the payroll system to ensure the correct taxes are being applied.
Enter a Yes or No under each column to determine if it is taxable, pensionable and/or insurable. Each code will be worth 1 mark, there will be no partial marks awarded.
Pay Code Tax CPP EI Mark
Car allowances ($500 paid each month through payroll to eligible employees) Yes No No /1
Partial reimbursement of cell phone bills (employee owned phones used for business) No Yes No /1
Taxable benefits for company cars (non-job related vehicles) Yes No No /1
Gift valued at $300 awarded for work anniversary gifts Yes No no /1
Group term life insurance policies – employer-paid premiums – non-cash No Yes no /1
Meals – reimbursements for business travel No Yes yes /1
Parking – scramble parking available to all staff No No Yes /1
Parking allowances ($200 paid each month to eligible employees) No No Yes /1
RRSP contributions – (no employer match, employees eligible to withdraw at any time) No Yes Yes /1
Training provided onsite for all employees on policy related issues No No Yes /1
Total marks /10
Part B
Question #4
As a payroll administrator, identify which of the following you feel is the most important payroll document or guideline you have/available to you.
• A signed and dated TD1 and TD1ON
• Collective Agreement
• Signed employee contract
• Employment Insurance Act
• Record of Employment Guide
• Employment Standards Act
Pick one from the above list.
1. Define what information it provides.
2. Why you feel this is important.
3. How it relates to the processing of payroll. Provide 3 reasons to justify your choice. You must have at least 3 sentences in each paragraph.
4. Your answer must be in proper essay format: introduction, content and conclusion.
Marking Rubric:
10 Marks
1 mark – selecting a topic
3 marks – for your three reasons why you think this document is important to a payroll administrator
3 marks – for your full explanation of the importance of this document
3 marks – for correct essay format as explained above
Toipc: Signed employment contract
Signed employment contract is an agreement between employer and employee on duties to fulfill and is enforceable by law.
It is import since it minimizes disputes. The contract defines terms and conditions of work, work description, termination, and salary. The terms are followed by the worker and employer to avoid disputes. The contract is enforceable by law. It is essential in dispute resolution either mutually or legally.
A payroll administrator uses the employment contract to tell the payment rate and initiate payment for an employee. The contract contains basic compensation data for official use. The administrator uses the contract to remain compliant on organizational practices such as payment dates. Payment administrator uses the contract to pay any extra compensation such as holiday allowances.
A signed employment contract establishes the rights and responsibilities of both the employee and employer. It is essential to minimize disputes between the two parties and provides for dispute resolution. It helps payroll administrators to initiate employee payment and guidelines for compensation.
Topic Selection /1
3 reasons why you think it is an important document /3
Full Explanation of 3 reasons /3
Correct Essay format /3
Total Marks /10
Question #5
Payroll tends to be the hybrid position between Human Resources and Finance.
List 3 ways that payroll interacts with each department.
6 Marks total
1 mark for each listing of how Payroll interacts with HR and/or Finance
1 mark for each explanation of the importance of the interaction
3 ways Payroll Interacts with HR and/or Finance Importance of interaction Mark
Actuarial valuation of employee benefits such as leave encashment. Data on leave, joining and contract expiry date are provided to HR and salary amounts to Finance department. The finance and actuarial department decide on calculation of provision amounts. Provision figures are essential in preparing financial statements.
The finance team uses data from the payroll and HR department for actuarial valuation. /2
Salary payment. The HR and payroll department prepares payment sheet for approval by finance team. Ensures employees receive salaries in time by proper coordination between departments. HR and payroll department provide disbursement amounts in good time for approval by finance department. /2
Comply with legal requirements. The HR and payroll team stores employee data on salary and social security while finance department ensures compliance with tax deductions. Finance department uses data given to them by HR and payroll team for calculation of statutory deductions to avoid legal consequences. /2
Total Marks /6
Part C
Case Study
In this case study you will be required to calculate the gross to net pay for three employees. You will also be required to calculate other employer costs based on the information provided. This case study will demonstrate that you know how to use what you have learned in this course.
Majic Corporation sells phone cases to public and private companies. They are located at 123 Locus Rd, Toronto, ON M1H 4S3. They employ 200 full time employees who work in sales, customer service and office support roles.
They have had an annual remuneration of over $1,000,000 for the past several years therefore their EHT rate is 1.95%.
Pay period #1 started December 22, 2019. All are paid on a bi-weekly basis.
The first pay day for these employees is Friday Jan 10, 2020.
They have three staff in the Customer Service Department answering questions from clients and the general public.
A)
Marijke has been with Majic for 5 years and is the Customer Service Supervisor. She earns $2000.00 bi-weekly working 35 hours per week.
Her employer provides the following:
• Health and Dental – fully paid for by the employer at a monthly cost of $469.00
• Group Term life insurance – 2x her annual salary at a cost of $0.69 per month per $1000 of coverage paid for by the employer
• AD&D – $50,000.00 at a cost of $0.19 per month per $1000 of coverage paid for by the employer
She has the following personal deductions from her pay:
• $5.00 per pay donation to the United Way
• Federal and Provincial income tax – she is claiming maximum tax (Claim Code 0) plus an additional $10.00 per pay
Pay Period 3
Answer Mark
Gross Pay $4000 /1
Gross taxable income $4544.74 /1
CPP contributions $210 /1
EI premiums $71.80 /1
Federal and Provincial taxes $20 /1
Group term life insurance 66.24 /1
AD & D $9.5 /1
United Way $5 /1
Net pay $4237.94 /1
Employer health tax $469 /1
Total Marks /10
Pay Period 4
Answer Mark
Gross Pay $2000 /1
Gross taxable income $2272.40 /1
CPP contributions $0 /1
EI premiums $35.9 /1
Federal and Provincial taxes $10 /1
Group term life insurance $0 /1
AD & D $9.5 /1
United Way $5 /1
Net pay 2257.40 /1
Employer health tax $0 /1
Total Marks /10
B)
Neema has been with Majic for 3 years and answers calls specifically from clients.
She earns $18.25 per hour and works 35 hours per week. Her employer provides the following:
• Health and Dental – at a total cost of $469.00 per month, 50% is paid by the employer and 50% is paid for by Neema
• Group Term life – $50,000.00 at a cost of $0.45 per month per $1000 of coverage paid for by the employer
• She does not receive AD&D
She has the following deductions:
• Federal and Provincial taxes – she is claiming basic tax (Claim code 1) plus an additional $5.00 per pay
Calculate the following for Neema:
Pay Period 3
Answer Mark
Gross Pay $2555 /1
Gross taxable income $2320.5 /1
CPP contributions $134.14 /1
EI premiums $40.37 /1
Federal and Provincial taxes $20 /1
Health and Dental Cost $234.45 /1
Group term life insurance $22.5 /1
Net pay $2125.99 /1
Employer health tax $469 /1
Total Marks /9
Pay Period 4
Answer Mark
Gross Pay $2555 /1
Gross taxable income $2320.5 /1
CPP contributions $0 /1
EI premiums $40.37 /1
Federal and Provincial taxes $20 /1
Health and Dental Cost $234.45 /1
Group term life insurance $22.5 /1
Net pay $2259.99 /1
Employer health tax $469 /1
Total Marks /9
C)
Roger started with Majic this year. His first day was January 6, 2020. He was hired on a temporary basis to cover an employee who was off on maternity leave. He earns $16.50 per hour. He is covered under the Employment Standards Act of Ontario. He works 7 hours per day 5 days per week and receives 4% vacation pay on each pay cheque. He does not receive any benefits. He has not taken any days off.
He has the following deductions:
• Federal and Provincial taxes – he is claiming basic tax (Claim code 1)
He has found a full time job and his last day to work will be June 26, 2020
Pay Period 3
Answer Mark
Gross Pay $577.5 /1
Gross taxable income $600.6 /1
CPP contributions $31.53 /1
EI premiums $9.49 /1
Federal and Provincial taxes $0 /1
Net pay $558.98 /1
Employer health tax $0 /1
Total Marks /7
Pay Period 4
Answer Mark
Gross Pay $577.5 /1
Gross taxable income $600.6 /1
CPP contributions $31.53 /1
EI premiums $9.49 /1
Federal and Provincial taxes $0 /1
Net pay $558.98 /1
Employer health tax $0 /1
Total Marks /7
D)
Now that you have calculated the net pays for each of these employees, calculate the totals for all three for following:
Pay Period 3
Answer Mark
Total Gross earnings for all 3 employees $7710 /1
Total employee portions for CPP $407.20 /1
Total employer portions for CPP $407.20 /1
Total employee portions for EI $131.15 /1
Total employer portions for EI $131.15 /1
Total Federal and Provincial taxes $40 /1
Total employee portion of Health benefits $703.45 /1
Total employer portion of Health benefits $703.45 /1
Total for United Way $20 /1
Total EHT $703.45 /1
Total Marks /10
Pay Period 4
Answer Mark
Total Gross earnings for all 3 employees $1477512 /1
Total employee portions for CPP $31.53 /1
Total employer portions for CPP $31.53 /1
Total employee portions for EI $157.56 /1
Total employer portions for EI $85.76 /1
Total Federal and Provincial taxes $60 /1
Total employee portion of Health benefits $234.45 /1
Total employer portion of Health benefits $234.45 /1
Total for United Way $20 /1
Total EHT $938 /1
Total Marks /10
E)
Journal Entries for Pay Period 3 and 4
Using the grid below complete the journal entry for the month of February using the amounts you calculated in Section D.
Account Debit Credit Mark
Wage Expense
$8254.74 /1
CPP Expense
$407.20 /1
CPP Payable
$407.20 /1
EI Expense
$131.15 /1
EI Payable
$131.15 /1
Fed & Prov tax payable
$40 /1
Health expense $703.45 /1
Health payable
$703.45 /1
United Way payable
$20 /1
Net Pay
$8,194.74 /1
Total
$9,496.54 $9,496.54 /1
Total Marks
/11
F)
As previously mentioned Roger has decided to leave Majic. His last day worked will be June 26th. He will require a Record of Employment.
Complete the boxes below with the correct amounts that should be included in each of the sections.
Roger started with Majic this year. His first day was January 6, 2020. He was hired on a temporary basis to cover an employee who was off on maternity leave. He earns $16.50 per hour. He is covered under the Employment Standards Act of Ontario. He works 7 hours per day 5 days per week and receives 4% vacation pay on each pay cheque. He does not receive any benefits. He has not taken any days off.
He has the following deductions:
• Federal and Provincial taxes – he is claiming basic tax (Claim code 1)
He has found a full time job and his last day to work will be June 26, 2020
Box Amount Mark
Box 10
January 6, 2020 /1
Box 11
June 26, 2020 /1
Box 12
June 26, 2020 /1
Box 14
September 26, 2020 /1
Box 15 A
938 hours /1
Box 15 B
$15,477 /1
Box 16
$5549 /1
Box 22
Medipac International, February 6, 2020 /1
Total Marks /8
G)
Year End
In this question you will need to complete the boxes for a T4 for Marijke using some of the following information. Enter your answers in the grid provided below the copy of the T4. This would be her 2019 T4.
1. Gross earnings = $50700.00
2. Her taxable benefit for Group term life insurance was $81.50
3. Her taxable benefit for AD&D was $16.25
4. Her employer paid Health and Dental was $440.00
5. Her total Federal and Provincial Taxes were $8825.33
6. Her donations to a charity were $104.00
7. You will need to calculate her CPP and EI deductions using 2019 rates. The 2019 rate for CPP is 5.1% and EI is 1.62%.
Description Answer Mark
Company Majic /1
Year 2019 /1
Box 10 Province of Employment Ontario /1
Box 14 Employment Income $50700.00 /1
Box 16 Employee’s CPP contributions $2585.7 /1
Box 18 Employee’s EI premiums $821.34 /1
Box 22 Income Tax deducted $240 /1
Box 24 EI insurable earnings $49878.66 /1
Box 26 CPP/QPP pensionable earnings $$47292.96 /1
Box 46 Charitable Donations $104 /1
Other Information Code 40 Other Taxable Allowances and Benefits $195 /1
Total Marks /11
Part D
WSIB – In the boxes provided please include the frequency of the WSIB payment and the date it would be due.
Assessable Earnings Frequency of Payment Due Date Mark
$65,400.00 Quarterly 30th April, 31st July, 31st October, 31st January /2
$551,500.00 Monthly 28th Febuarry,31st March, 30th April, 31st May, 30th June, 31st July, 31st August, 30th /2
$103,600.00 Quarterly 30th April, 31st July, 31st October, 31st January /2
$1,395,200.00 Monthly 28th Febuarry,31st March, 30th April, 31st May, 30th June, 31st July, 31st August, 30th September, 31st October, 30th November, 31st December, 31st January /2
$2654.00 Annual 30th April /2
Total Marks /10
Total Marks /150
Grade Percentage – 30% of final grade %
