Introduction to Payroll

Payroll Simulation #3
Pay Adjustments, Employer Portion CPP & EI, Payroll Summary Report,
Journal Entries
Last week you hired, prepared the payroll documentation and calculated the payroll for
PPE January 17th for your six (6) employees of SFY Inc. Today you have been informed
that some errors were made and you now need to prepare pay adjustments. We will be
cutting cheques for the adjustment amount.
Once this is complete you will prepare the payroll summary for the entire pay period and
Journal Entries for this pay (dont forget to include the original pay calculation as well as
your corrections).

Instructions:
Calculate/Prepare the following for PPE Jan 17 2015:
A. Required Pay Adjustments (we made some errors in the original payments)
B. Employer CPP & EI (how much does the company owe?)
C. Payroll Summary (summarizing the entire pay, not just the corrections)
D. Journal Entries (for the amended full payroll amount)

Note:
You should view your copy of the employee information document which is also located on FOL as
well as relevant payroll information (below) in order to complete.

Created: January 2015

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Payroll Information PPE January 17, 2015

January 17th Timesheets (this is the time card that the payroll was based on)
Name
John Able

Week#

Monday

Tuesday

Wednesday

Thursday

Friday

1
2

Sunday

8
8

8
8

8
8

8
8

8
8

Sam Dunk

1
2

8
8

8
8

8
8

8
7

8
8

48
39

Susie Sheer

1
2

Total

4
3

9
10

40
40

5
4

Saturday

January 17th - Actual Payroll (Assume this is what SFY actually paid out for January 18 th)
Name

Gross

Fed.Tax

Prov.Tax

CPP

EI

Net

John Able

1600.00

72.20

48.25

72.54

30.08

1376.93

Inga
Notable

2000.00

160.85

101.75

92.34

37.60

1607.46

Sam
Dunk

1044.00

74.50

42.00

45.01

19.63

862.86

228.00

0.00

0.00

0.00

4.29

223.71

231.00

0.00

0.00

4.77

4.34

221.89

10000.0
0

2390.56

1513.71

488.34

188.00

5419.39

Susie
Sheer
Bob Ing
Mary
Christmas

A. We made some errors. The amounts actually paid are noted above. Management has
asked that we calculate the adjustments required and cut new cheques for the amount
owing to each employee. Calculate the PPE Jan 17th Pay Adjustments for the
following (use your printed tax tables for all calculations).

Created: January 2015

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1.

You just realized that you paid Sam Dunk straight time for his 4 Overtime hours on this pay. Use this chart to
outline what he should have been paid vs. what he received. The adjustment cheque will be made out for the
difference in net pay.

Should Have
Been Paid
Gross Pay

What was
actually
received

Adjustment/Cheque
Amount

1044.00

24

CPP Deduction

39+44(12)
4(18)
1068.00
46.20

45.01

1.19

EI Deduction

20.08

19.63

0.45

Federal Tax

77.90

74.50

3.40

Provincial Tax

43.10

42.00

1.10

Net Pay

880.72

862.86

17.86

2.

Inga Notable had been advised that she would be receiving a salary increase of $30/week effective Jan 12 th 2015.
We missed this on her last pay. Note: watch the dates on this one! Use your pay calendar to determine how
many weeks are impacted.

Should Have
What was
Adjustment/Cheque
Been Paid actually received
Amount
Gross Pay

2030.00

2000.00

30.00

CPP Deduction

93.82

92.34

1.48

EI Deduction

38.16

37.60

0.56

Federal Tax

167.65

160.85

6.80

Provincial Tax

104.60

101.75

2.85

Net Pay

1625.77

1607.46

18.31

Total marks _______/12

Created: January 2015

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3.

You just found out that John Ables time card was wrong. He actually worked 8 hours on Sat., Jan 11 th. Be careful
if he works more than a certain number of hours (per ESA) he may be entitled to overtime.

Should Have Been

Paid

What was
actually
received

Adjustment/Cheq

Gross Pay

44+40 (20) =1680 + 1600.00

4(30)= 120
= 1800.00

200.00

CPP Deduction

1800-134.61x4.95%= 72.54
82.44

9.90

EI Deduction

30.08

3.76

Federal Tax

1800x1.88%=
33.84
104.45

72.20

32.25

Provincial Tax

65.15

48.25

16.90

Net Pay

1514.12

1376.93

137.19

Total Marks _____/12

Use this chart to summarize the information for the entire payroll (add in the amount of
your adjustments as calculated above). The totals should represent what was actually
paid after the corrections were made for the entire payroll.
Name
Gross
Fed.Tax Prov.Tax
CPP
EI
Net
John Able
1,600.00
72.20
48.25
72.54
30.08
1,376.93
add
200.00
32.25
16.90
9.90
3.76
137.19
adjustment
Inga Notable
2,000.00
160.85
101.75
92.34
37.60
1,607.46
add
30.00
6.80
2.85
1.48
0.56
18.31
adjustment
Sam Dunk
1,044.00
74.50
42.00
45.01
19.63
862.86
add
24
3.40
1.10
1.19
0.45
17.86
adjustment
Susie Sheer
228.00
4.29
223.71
Bob Ing
231.00
4.77
4.34
221.89
Mary
10,000.00 2,390.56 1,513.71 488.34
188.00
5,419.39
Christmas
Total
15357.00 2740.56 1726.56
715.57 288.71
9885.60

Created: January 2015

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Payroll Simulation 3

B. Calculate the total employer portion of CPP and EI for the January 17h payroll.
Ensure you include any pay adjustments you just made.
Employer CPP Calculation (2 marks show calculation)
715.57
Employer EI Calculation (2 marks show calculation)
404.20
C. Prepare the Payroll Summary for January 17th including your pay adjustments
(dont forget to include the original pay calculation as well as your corrections).
Description
Gross
CPP Ded
EI Ded
Federal Tax
Provincial Tax
Net
Total marks ________/ 6

Payroll Summary January 17, 2015

Amount
15357.00
715.57
288.71
2740.56
1726.56
9885.60

D. Prepare the Payroll Journal Entries for Jan 17th payroll including your pay
adjustments (dont forget to include the original pay calculation as well as your
corrections).
Description
Gross Payroll
CPP Expense
CPP Liability
EI Expense
EI Liability
Tax Liability
Net Pay

Debit
15357.00
715.57

Credit
1431.14

404.20
692.91
4467.12
9885.60

Total marks _______/9

Total Assignment marks _________/43

Created: January 2015

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