It is responsible for the preparation of the payroll and the payment of wages. The routine will require:
- Analysis of clock cards and check of overtime authorization
- Calculation of bonus
- Compilation of gross earning
- Calculations of deductions
- Preparation of pay details for each employee showing net wages
- Arranging for payment of wages to employees
Calculation of deductions
A range of deductions are made from gross earnings when calculating the net payment due to the employee such deductions may be statutory, obligatory or voluntary in nature
- Statutory deductions are pay as you earn (PAYE) tax, pensions, and employees, national insurance contributions. The employer calculates the amount due to be deducted using the relevant rates in force and then arranges to make a total payment in respect of all employees to the revenue authority.
- Obligatory deductions are most likely to comprise payments to an approved pension fund. e.g. National Social Security Fund (NSSF). Once again it is likely that the employer will make a contribution in addition to the employee
- Voluntary deductions include items such as trade union subscription, charity deductions and contributions to saving schemes.