Section: Payroll Subsystem Subsection: 090-01

Subsection: Overview Page 1 of 3

OVERVIEW

Employees play a vital role in attaining the visions, missions and objectives of the

company. They act out all the strategies of the business to ensure its competitive

standing and long term growth and existence. Therefore it is just proper that they receive

timely and accurate salaries and wages, as equivalent for their services rendered.

The Payroll Cycle consists of all transactions and activities related to processing

of employee’s compensation and benefits. Procedures under this cycle include

establishment and update of Employee Master File which will be based from the data

filed and kept by the Human Resource Department. An Employee Master File contains

data of every employee a company employs such as name, address, social security

number, position, pay type and tax information. However, this is only used as a basis for

efficient and effective payroll generation.

Palm Waves resort uses a Fingerprint Biometric System where employees scan

their thumb into the slot and enter their password for both time-in and time-out. The

system is installed to capture accurate records of each employee’s attendance and such

is integrated automatically to the Payroll System to efficiently record and compute Bi-

monthly payroll.

This subsystem also includes activities such as payroll computation, payroll

preparation and authorization and pay slip distribution. Payroll computation consists of

procedures from various files such as employee attendance (Employee Attendance file

and Leave of Absence File), additional pay for approved overtime work (Approved

Overtime File), deductions for cash advances received (Cash Advances File), that are

manually used to update the Payroll Master File. Every 15th and 30th days of the month,

these data are gathered and are automatically processed by the system to be used in

the computation of the gross pay of the employees less the mandatory deductions such
 Section: Payroll Subsystem Subsection: 090-01
Subsection: Overview Page 2 of 3

as SSS, PhilHealth and PAG-IBIG contributions as well as Withholding Tax Remittances

are integrated to generate the net pay due to them.

Disbursement to all employees is through fund transfer into their own depository

accounts. With all of these procedures, activities and important documents, it is very

important to ensure that Payroll Subsystem is equipped with necessary controls to

minimize the risk of fraud and material errors during the company’s operations.

With regards to outsourced employees, the company does not prepare payroll

actions for each of them. The company pays its payable with the agency to which it

contracted to for the services rendered by its outsourced employees. The company

already sets a contract with an agency that provides services to the company during

peak season. The agency is now responsible for providing salaries to its employees, and

is beyond the payroll activities of the company.

Section: Payroll Subsystem Subsection: 090-01
Subsection: Overview Page 3 of 3