DESIGN AND IMPLEMENTATION OF A COMPUTERISED PAYROLL SYSTEM

DESIGN AND IMPLEMENTATION OF A COMPUTERISED PAYROLL SYSTEM

INTRODUCTION TO CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

A payroll is a company’s list or records of its employees, which is often used to refer to the total amount of money that a company pays to its employees. A payroll system is software which organizes and arranges all the tasks of employee payment and the filing of employee taxes (Wikipedia). These responsibilities could include keeping track of hours worked, calculating wages, withholding taxes and deductions, printing and delivering checks, and paying employment taxes to the government. Payroll software serves several functions for the user, the employees, and the company, including: providing simple ways to manage employee calendars (e.g., sick leave, absences, and overtime), providing you with the most recent tax updates by notifying you when new updates are available, allowing you to quickly and easily generate payslips for all of your employees, and serving as a reminder. Payroll also makes deductions from employees’ wages for taxes, wage garnishment, health and life insurance, spending accounts and retirement investments. Payroll works with your accounting department to guarantee that wage deductions and other payroll expenditures are paid and accurately recorded.

1.2. Problem Statement

Manual systems of payroll always put pressure on people to be correct in all aspect of their work. With manual systems the level of service is dependent on individuals and this puts a requirement on management to run training continuously for staff to keep them motivated and to ensure they are following the correct procedures. It is all too easy to switch details by accident, resulting in discrepancy in data entry or handwritten orders. This has the impact of not simply generating problems with customer service but also rendering information cannot be used for reporting or discovering trends with data discovery. Reporting and verifying data is another issue that can be time consuming and costly. Other issues produced by the manual payroll system include inconsistency in data entry, mistakes, and miskeying information.

Significant ongoing staff training costs.

The system is dependent on good people.

Ø Reduction in exchanging information and customer services.

Report creation is time-consuming and expensive.

Data security is lacking.

Data entry duplication.

1.3. Objective of Study

The goals of this research are to create a computerized payroll system for an organization and to create a computerized system for calculating basic salary and allowances for employees.

Creating a computerized payment platform.

Ø To design a system that accurately stores employee data and retrieves payment history when needed.

Ø To design a computerized system for tracking vacation time, maternity and paternity leave.

1.4. Importance of the research

The study will aid in reducing errors, fraud, increase speed and also aid growth in organizations if successfully implemented. With this computerized system in place, manual payroll systems in organizations will be completely eliminated. The study will also serve as a resource for other student researchers who wish to conduct additional research on the subject. Findings and recommendations from this system will aid in developing newer versions to serve optimally.

1.5. SCOPE/LIMITATION OF THE STUDY

The scope of this study is centered on the design and implementation of an e-payroll system.

Limitation

Financial constraint- Insufficient funds tend to obstruct the researcher’s efficiency in sourcing for relevant materials, literature, or information, as well as in the data collection process (internet, questionnaire, and interview). Time constraint- The researcher will conduct this study while also working on other academic projects. As a result, the amount of time spent on research will be reduced.

1.6. DEFINITION OF TERMS

Payroll: refers to a company’s list or records of its employees, and is frequently used to refer to the total amount of money that a company pays to its employees.

A payroll system: is software which organizes and arranges all the tasks of employee payment and the filing of employee taxes.

Payslips: a note given to an employee when they have been paid, detailing the amount of pay given and the tax and insurance deducted.

Employer: a person or organization that employs people.

Employee: a person employed for wages or salary, especially at non executive level.

W-4 tax form: is a form completed by an employee to indicate his or her tax situation (exemptions, status, etc.) to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee’s paycheck.

Internal Revenue Service (IRS): A United States government agency in charge of tax collection and enforcement.

Social Security Administration (SSA): is an independent agency of the United States federal government that administers Social Security, a social insurance program consisting of retirement, disability, and survivors’ benefits.