Payroll Cycle

Figure 22.1 : Payroll Cycle

Issue Appointment Letter

Employee report for duty

Set up Personal File pay allowances deductions

Personnel File

A

Establish Employee Earnings Record

Employe e Earnings Record Figure 22.2 : Human Resource Department

Collect Time Cards

Time Cards

Prepare a summary of hours worked and separate between normal hours and overtimes

Obtain approval from officer

Time Cards Summary of Hours Worked

To Human Resource Department

Figure 22.3 : Morning Hours Worked

From various department

Time Cards Summary of Hours Worked

Confirm the accuracy of the Summary of Hours Record rate of pay allowances, deductions from the Employee

Employee Earnings Record

Prepare Payroll Register

Time Cards S/Hours Worked Payroll Reg. 3 Reg. Payroll 2 1 Payroll Register

A To Accounting

Department

D To Cashier

Figure 22.4 : Computing the Payroll

From Human Resource Departme

1 Payroll Register

Prepare Cheques and obtain approval from officer

Payroll Register Cheques

To Accounting Department

Figure 22.5 : Disbursement of Payroll

From Cashie r

From Human Resource Departme

S/Hours Worked

Cheques

3 Payroll

Match documen ts

Distribute cheques and personnel acknowledged receipts on

S/Hourly Worked Payroll Reg. 3 Cheques

To Human Resources Department

To Personnel

Figure 22.6 : Distributing Payroll

From Human Resource Departme

3 Payroll Register

Bookkeeper records the total basic pay allowances and deductions in general

Bookkeeper records the total net pay in Cash Book

General Ledger

Cash Book

D

Figure 22.7 : Journalising the basic pay

General Journal

Cash Book

Bookkee per posts the total basic pay allowanc es and deductio ns

Bookkeep er posts the total net pay

General Ledger Figure 22.8 : Summarising the Journal