1. 2.8 Payroll Applications
AS Applied ICT
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What is a payroll system?
What happens to the old master file?
Exception Reports
What are the two types of files involved?
General Overview
Financial Reports
Payslips
What happens in a payroll system?

3. What are Payroll Systems?
They involve batch processing
The files are stored on two separate magnetic files
This obviously then means that there will be two types of data files involved

4. The Two types Master file – containing data about the workers:
Employee number ( This is used as the PRIMARY KEY; data is stored in order of this)
Name
Contact details
Rate of pay
Pay received
Transaction File – is a temporary file; containing data that can change from month to month.
Contains details of # of hours worked + any overtime + employee number.
Details of any new worker or any worker whose details have been changed.

5. What happens in a payroll system?
End of week/month: master file is processed using the transaction file.
BEFORE the processing, the transaction file needs to be put in the same order as the master file.
Computer then calculates the pay of each worker use the # of hours worked and the rate per hour
Payslips then printed along with error reports.

6. What happens to records in the old master file?
Records from old master file are read and are updated using calculations, deletions, addition or amendments.

7. Reports (these can consist of : New Master File
Old Master File
Transaction File
Update (this involves calculation of employee’s wages using the hours worked from the transaction file)
Reports (these can consist of :
Financial reports
Error reports
Payslips
New Master File

8. Transaction file: Containing employee number and hours worked.
Payslips
Information contained on these can be found on the new master file and the transaction file.
Image of Payslip
Master file with:
Employee number
Department worked in
pay rate per hour
Tax code
NI number
Transaction file: Containing employee number and hours worked.
Payslips

9. Payslip From the old master file From the transaction file
Calculated during update process
This data is written to the new master record and is updated

10. Financial Reports Payroll software  report generator facility
Information on employees of company/ or department
Information on employee salary
NI(National Insurance) contributions for all employees
Total NI contribution paid to tax authorities.
Income tax
Amount of money paid to each bank where employees have an account.

11. Exception Reports
These are reports of certain validation rules. For example:
Employee earning an unusually large amount of money
Employee that has been on emergency tax for a long time.
2 employees with the same NI number.