Goroka Technical College

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UNDERSTAND AND APPLY THE SKILLS IN

PREPARING EMPLOYEE PAYROLL USING MYOB APPLICATION

TOPIC 12

Lesson Outcomes
At the end of this lesson the student will:
a) Set employee payroll
b) Create employee profiles
c) Complete timesheets
d) Process payroll
e) Pay payroll liabilities
f) Prepare payroll reports
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12.1 SET EMPLOYEE PAYROLL

MYOB payroll allows preparation of wages/salaries weekly or fortnightly. In order to

prepare payroll it is necessary to have staff/employee records or cards create for each
staff. In this exercise the payroll system has to be configured before commencing.

From the command center, click the payroll command center tab. Click payroll
categories, A call-up notice will ask you to set the tax tables before proceeding.

Follow these steps:

1. Click, OK to go to the next window.
2. Click, load tax tables.
3. Click payroll categories again.
4. Click OK to set general payroll in; for these:-
 Current payroll year …….
 No of hrs in a week is 40
 Withholding paye no, skip
 Round off net pay to ‘0’
 Default superannuation,
 Click search icon
 Click new
 Name: key in ‘Nasfund’
 Click OK to record.

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12.2 CREATING EMPLOYEE CARDS
Before pay is to be processed employee records must be created to provide details of
individual employees. Follow these steps to create employee records, from the payroll
command center;
1. Click card file, A window will appear showing a list of all the employees on
payroll that are in the payroll system. If the window has no employees showing,
it means now records are in the payroll system. This means new cards have to be
created. Make sure that the card type is employee at the top left hand corner.
2. Click new to create a new card.
3. Key in the last name of the employee then the first name.
4. Key in the address of the employee, where the employee resides.
5. Click the payroll details tab. The personal details window will appear, this is
where you key in all the personal details about the employee you are creating.
Follow the steps starting from 6.
6. Key in date of birth.
7. Key in type of gender.
8. Key in the date when the employee commenced employment. The starting date
he/she will be paid.
9. Employment basis select individual.
10. Employment category select permanent.
11. Employment status select full time.
12. Employment classification:-
 Click search icon.
 Click new.
 Key in job title, e.g. manager or shop assistant. This is the title of the
employee being created.
 Click ok to record.

Next is specifying the wages/salary details for the employee, follow the steps below:
1. Click the wages icon below payroll details icon.
2. In pay basis box select hourly.
3. Hourly rate box key in the hourly rate of the employee from the notes.
4. Pay frequency box, select fortnightly.
5. From hourly in fortnightly pay period box key in 80 as the total standard hours
per fortnight.
6. Wages/Salaries expense account select from account list, click search icon.

Next is what types of pay that employee is entitled to, e.g. overtime, bonuses, holiday
pay etc. If the employee is receiving any other type of pay, the relevant pay type has
to be selected from the list provided. Select by ticking the box next to the type of
pay. Refer to the notes and staff records of what types of pay that employee will
receive to complete this section.

Next is specifying the superannuation fund the employee is contributing to.

1. Click the superannuation icon.
2. From the list select by ticking the box next (left) to the superannuation.

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3. If the fund is not shown, Click the create new payroll category tab.
4. A window will appear for creating the new fund. Key in the name of the fund,
Nasfund for this activity.
5. Linked expense account is wages & salaries and linked payable account is
payroll accruals payable.
6. Calculation basis is on percent of gross wages/salaries; key in the box where
it shows % sign, replace it with 6.4 (means 6.4% of gross).
7. Click ok to record.
8. Go back and place a tick next to the superannuation fund created for this
employee.

Next is to specify if the employee is receiving any entitlements from the

employer.
1. Click entitlements icon.
2. From the list select by ticking the box next (left) to the entitlement.
3. If the entitlement is not shown, Click the create new payroll category tab.
4. A window will appear for creating the new entitlement. Key in the name of
the entitlement, e.g. housing or motor vehicle for this activity.
5. Calculation basis is on percent of gross wages/salaries; key in the box where
it shows % sign. Refer to staff records for the % rates for each employee.
6. Linked wages category is base hourly.
7. Click ok to record.
8. Go back and place a tick next to the entitlement created for this employee.

Next is to specify if the employee is making any deductions (each fortnight, check
this and action). Deductions can be repayments of wage/salary advances or
contributions for specific events being organized by the department or company.
1. Click deduction icon.
2. From the list select by ticking the box next (left) to the deduction shown.
3. If the deduction is not shown, Click the create new payroll category tab.
4. A window will appear for creating the new deductions. Key in the name of
the deduction, e.g. housing or motor vehicle for this activity, this is because,
for this exercise these are included for computing wages tax, therefore not to
be received by the employees.
5. Calculation basis is on percent of gross wages/salaries; key in the box where
it shows % sign. Same % is to be deducted from the gross pay.
6. Linked payable account is usually a liability account. For this activity select
wages & salaries from account list.
7. Click ok to record.
8. Go back and place a tick next to the deduction created for this employee.

Next is to specify if the employer is making any payments for the employee. For
instance school fee subsidy, superannuation contributions or other expenses
subsidized.

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1. Click employer expenses icon.
2. From the list select by ticking the box next (left) to the employer expenses
shown.
3. If the employer expenses is not shown, Click the create new payroll
category tab.
4. A window will appear for creating the new employer expenses. Key in the
name of the employer expenses, E.g. office uniforms or Employer Nasfund
contributions. For this activity key in Employer Nasfund Contributions.
5. Linked expense account is wages/salaries account.
6. Linked payable account is usually a liability account. Select payroll accruals
payable.
7. Calculation basis is on percent of gross wages/salaries; key in the box where
it shows % sign with 8 (means 8% of gross pay).
8. Click ok to record.
9. Go back and place a tick next to the employer Nasfund contribution created
for this employee.

Next is to specify wages tax the employee is paying to government, this is a

fortnightly deduction. Check to is see that it is enabled by clicking the relevant tax
from the list.
1. Click taxes icon.
2. Select PAYE Withholding and tick.
3. Click Ok to record the payroll details of the employee that you have been
entering and go to create a new employee payroll details.

Next is to specify how (method of wages payment, by cheque or cash) the

employee shall be paid.
1. Click the payments tab.
2. From the payments box click the search icon.
3. From the list provided select the method of payment.
4. Click Ok to record.

Next is to create a new employee payroll details. Note there should be a list all the
employee cards you have created up to now.

Click new from the card list window. Follow the steps from creating employee
cards and go through the steps as explained above.

After all the employee cards have been created click close to exist to the
command center.

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12.3 COMPLETE TIMESHEETS
Timesheets are used to record the hours that are due or earned by the employees during
the last fortnight period for which they shall be entitled to receive payment this pay day.
Time cards or time clocks are examples of devices used to keep records of hours worked
by the employees. For this activity use the information provided in the exercise to record
the time sheets.

Follow these steps:

From the command center click enter timesheets. A window will appear for entering the
times worked by the individual employees that fortnight period.

1. Select the relevant pay period from the calendar at the top right hand corner. Use the
horizontal hallow arrows to navigate. to go to new week and to go back to
the previous week.
2. Click the search icon next to the employee to find the first employee to record the
hours worded. A list of employees should appear.
3. Highlight the employee and click use employee.
4. Click payroll category on the left and click the search icon. A list of the different
types of pay due to the employee will appear. Note, this is based on the payroll detail
which was specified for the employee in the previous exercise.

If the type of pay due to the employee this pay period does not appear in this list,
click cancel, click list from the menu bar (at the top) and select cards. Click zoom
arrow next to the employee and go to payroll details tab and select wages. Scroll
down from the list and find the relevant pay and select by ticking. Click Ok to record.
Close and go back to timesheet window.
5. Select the type of pay due to employee highlight and click use category. The pay
category should appear for the employee.
6. Click the cell under each of the days in a week to key in the number of hours worked
per day. Use the tab to navigate. If the employee is to be paid another pay type use
pointer to find it from the next row under payroll category.
7. Follow the steps from 4 to 6 to complete. Once all the pay type due to the employee
are selected and hours recorded go to the next week.
8. Click the horizontal hallow arrow at the top next to the calendar to go to the next
week. Note there are two weeks in a fortnight therefore hours for two weeks should
be entered for each employee. Once the hours for the two weeks are complete go and
select the next employee from the employee list.
9. Click the search icon and select the next employee. Follow through the same steps to
record the hours.
10. When all the employee hours are recorded click Ok to exist to the command center.

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12.4 PROCESS PAY
This involves confirming the hours for each employee and process the payment.
Follow these steps:
1. Click process payroll tab.
2. Select process all employees paid.
3. Select fortnight from the search icon.
4. Select pay date; this is the last date/day of the fortnight.
5. Pay period start should be the starting date of the fortnight. Select using the calendar.
6. Pay ending period should be the last date of the fortnight. Select using the calendar.
7. Check the list of hours for all employees displayed on the screen. Note each
employee should have two lines and hours for two week that they will be paid.
8. Click next, a window will appear showing details of each employee pay calculation.
This is what the employees will be paid showing details of net pay.
9. Click the zoom arrow next to each of the employees to check and edit. Payee should
be the name of the employee. If payment is by a cheque, the cheque amount and
number should appear. For this activity no need to key cheque number, use the
default number provided.
10. After editing click Ok to record the changes.
11. Click the preview pay details for a preview of the payment details. Details of hours
paid, gross pay, deductions should appear. This is a pay verification advice slip or
simply a pay slip which all employees are entitled to get each fortnight from the
employers.
12. Click close to exist.
13. Click record next record and exist or click back to go back for further checks.
14. Click continue.
15. Click Ok to exist.

12.5 PRINTING PAY CHEQUES

Printing can be done after editing the payment details. If cheques are to be printed.
Follow these steps:
1. From the commnad click pay cheques.
2. A to be printed list will appear.
3. Select the bank account that will pay for the wages from the account list.
4. Click the zoom arrow next to the employee to be paid to view the cheque voucher.
5. Click print tab at the bottom left of the screen to print.
6. Select preview cheque before printing.
7. Select print cheque.

12.6 PAY PAYROLL LIABILITIES

Every month tax liabilities like group (wages) tax and GST have to be remitted to Internal
Revenue Commission (IRC). The payroll system of MYOB keeps records of these every
time a payroll is processed which enables the Accountant to raise a cheque to IRC. When
pay is processed wages tax deductions from the employees are recorded as a liability and
debit to wages expense.

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 Follow these steps:
1. From the command center click pay liabilities.
2. A cheque requisition document will be displayed.
3. From the supplier box find, IRC, if not in the list create a new card, type supplier.
4. Select the type of liability from the list where is says liability type.
5. Payroll categories select PAYG Withholdings tax.
6. Click Ok.
7. Click record.
Note this cheque has to be printed and mailed to IRC or other agencies as appropriate.

12.7 PREPARE PAYROLL REPORTS

There are several payroll reports that are available from the reports tab from the command
center.
Follow these steps:

1. Click reports tab and select payroll from the list. A reports window will appear.
2. For this activity highlight register summary to view a list of pay processed.
3. Click customise.
4. Select all to view all employees or individuals from the list.
5. Select month.
6. Click display. View and print report or close to exist.

Check through other reports to familiarize.

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Reference:
Keeping Account with MYOB by Cathy Grundy & Doug Lyte.