Chapter 2.8
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Know that payroll systems usually involve
batch processing
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Understand how master files & transaction
files are used in payroll
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Be able to identify the type of information on
each file
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Today we are looking at Payroll.
What is Payroll?
log on and go to
http://en.wikipedia.org/wiki/Payroll
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Usually done once a month
All employees paid at the same time
Batch processing
Magnetic tapes
Master file
 Employee number
 Name
 Details
 Rate of pay
 Pay to date
 Total tax
 Total NI
Transaction file
 Employee number
 Hours worked this
month
 Overtime
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Also holds detail of
new workers/exworkers/changes
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TEMPORARY
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3 tapes needed
Old (current) master file
Transaction file
New master file
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New master file
Payslips
Financial reports
Error reports
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Information about:
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All employees
Different departments
Salaries
NI contributions
Taxes paid by employee and employer
Total pay paid by company to each and to all staff
All earnings & deductions
Summaries by department
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Alexandria Regional Bank is a small bank with
three branches. At the moment, all paying in
slips and cheques are gathered together in
the course of the day and are then batch
processed overnight.
Describe how data would be stored in the
current system of batch processing. [2
marks]
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Two from:
 File will be held in a sequential manner
 To allow for serial access
 Code allocated for credit (paying in slip)
 Or debit (cheque)
 Used to process all records one after the other
 When updating customer accounts
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Maharashtra fashions is a very large mail
order catalogue company which sells a
variety of clothes.
The owner has decided to computerise the
company operations. The systems analyst
suggested that the payroll system at the
company should be computerised.
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Computerising the payroll will require the
creation of a master file and a transaction file.
Describe the information that will need to be
stored about each worker on each file.[3 marks]
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Describe the outputs of the payroll system
[4 marks]
Master file
 2 marks for 4 or more items
 1 mark for 3 items
 0 marks for less than 3 items
Name/address, tax history, National Insurance history,
pay so far this year, holiday entitlement, pension
contributions, rate of pay, tax code, job title,
employee number
Transaction file
 1 mark for worker’s number and at least one of
hours/days worked, bonus payments, holiday data,
days sick
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Payslips with description of information included
Financial reports of payroll statistics
Exception reporting
Reports showing hours worked by individual
Report showing cost information by department or individual
Reports including the analysis of the turnover of employees
together with detailed
absence reports
Payments to employees automatically generated using BACS
Tax and NI payments automatically made direct to the Inland
Revenue
Specification of money required by company for payment to
workers/Inland Revenue