Chapter 1 The Background and its Study

1.1 Introduction

‘Payroll' refers to the records - paper or electronic - and calculations that you
make to work out your employees' pay and deductions under the PAYE (Pay As You
Earn) system. It's essential to a business or company that you pay your employees the
right amount and on time - and that you make the correct deductions. So keeping
accurate payroll records is really important.

Now a day, Manual System is replaced into more advance and modern
technology, just like the Manual Payroll System where the accountant, computes or
process employees salaries through calculator. The way of saving files and important
documents are only filed in filing cabinets that may cause loss of files when large
amount of data are being received. In addition, it is not secured. And in fact, most
accountant, uses same software of Microsoft office especially MS Excel.

And with the use of this proposed system, a new and more advance Payroll
System may be produced which can provide data security, prevent loss of data and
redundancy and easier, accurate and faster to use.

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1.2 Background of the Study

Sumulong College of Arts and Sciences (SCAS) was established since 2007,
a college with only one vision in mind: that of producing graduates who have the
competence and the ability to compete with the best of the world. There are competent
faculties, 5 full time and the remaining 20 are part-time faculty. It is also worthy to know
that the college has been establish as a legacy of and in memory of the late senator
Lorenzo S. Sumulong, a man of excellence and integrity made the country proud with his
highly publicized and world-acclaimed debate against the Russian law maker Kruschev.
And as time passes by the population of the employees in SCAS is increasing. As of this
year, it has 27 full time and 20 part time employees. And unfortunately as a computer
school the accountant only uses Microsoft Excel for the preparation of the payroll and
generating pay slips for the employees’ cut-off period. The accountant manually records
the different data.

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1.3 Theoretical Framework

The accountant of Sumulong College of Arts and Sciences is currently using

Microsoft Excel for the preparation of the payroll and generating pay slips for the
employees’ cut-off period. The accountant manually records the different data. The
employees used time cards and buddy clock for their daily time record. HRM personnel
collect the time card for validating the time record and making a summary report
attendance of the employees and send it to the accountant. The accountant will input the
data and compute the salaries of each employee.

INPUT PROCESS OUTPUT

Total No. of Days Present, Summary of Employees

TIME ATTENDANCE
working hours (Time Cards) Time Attendance

Employee Information

-Employee Number/ID
number

-First Name

-Surname
ADD / UPDATE
-Last Name
EMPLOYEE List Employees
INFORMATION Information (in the File
-Birth date
Cabinets)
-Contact Number

-Position

-Number of dependents

-Basic Rate

-Employee Type
Employee Deductions PAYROLL COMPUTATION Pay Slip

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-Pag-ibig

-GSIS

-PhilHealth

-Cash Advance

-Loan

Total No. of Days Present,

working hours (Time Cards)
Payroll Summary

Incentives/ Bonus

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1.4 Conceptual Framework

Payroll Computation

The SCAS Computerized Payroll System will automatically compute the gross salary
of each employee; but the accountant must get the working hours of the employees in
Time Monitoring System and must input and select the type of deduction of the
employees have. The system can generate pay slips which contain the exact amount of
salary and deductions of all employees.

INPUT PROCESS OUTPUT

Employee Information

-Employee Number/ID number

-First Name

-Surname

-Last Name ADD / UPDATE

EMPLOYEE List Employees
-Birth date INFORMATION Information (in the
Database)
-Contact Number

-Position

-Number of dependents

-Basic Rate

-Employee Type
Employee Deductions PAYROLL Pay Slip
COMPUTATION
-Pag-ibig

-GSIS

-PhilHealth

-Cash Advance

-Loan

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Total No. of Days Present,
working hours (External: Time
Monitoring System) Payroll Summary

Incentives/ Bonus

1.5 Statement of the problem

1.5 1 General Problem

• Sumulong College of Arts and Sciences is a computer school but still using MS
Excel in generating their payroll system.
Manual Payroll system uses MS Excel Spreadsheet 2003 for the computations
and also for printing reports. It uses bandy clock for time-in/time-out. It also saves its
employees information in the file cabinets , which will lead to slow data retrieval,
information security and integrity is in risk and filing cabinets requires a lot of space
in the room.

1.5.2 Specific Problem/s

• Processing the payroll of the employees is time consuming and

- In the existing manual system of the company, the payroll
clerk uses Microsoft Excel to compute the salary and total
deductions of the employees in preparing the payroll for the
month.
- Every payroll cutoff period, the HR personnel checks all the
time cards of all the employees manually. It is
• How to provide the accurate salary output efficiently?
•

-As stated, the payroll clerk uses MS Excel for the preparation of the
payroll; MS Excel has a “link/references” feature wherein a specific sheet within
the worksheet can be link to another to get the total result in any computation, as

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 a result the data is identified to be inaccurate after being checked by the payroll
clerk.

• How to save the employees data and information?

• Management of Employees data in insufficient and
- Employee’s information’s are filed in folders and these folders are kept in filing
cabinets. In time that the accountant needs to retrieve certain reports, he/she has to
search for it in the bulky folders stored in filing cabinets, which will lead to slow data
retrieval, information security and integrity is in risk and filing cabinets requires a lot of
space in the room.

1.6.1 General Objective

To enhance and design a Computerized Payroll System for Sumulong

College of Arts and Sciences (SCAS). The study aims to develop a computerized payroll
system that will support the entire payroll computation and management process of
SCAS.

1.6.2 Specific Objective/s

• To process payroll salaries of the employees.
-The study aims to develop a module that automatically computes the total
deductions, total gross salary and total net salary of the employees for more
efficient and accurate result of data.

• To provide the accurate salary output.

-The proponent will develop a module that automatically computes the total
deductions, total gross salary and total net salary of the employees for more efficient
and accurate result of data.
• To provide Employee information module to easily deal with the generation of the
reports.

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 - The proponents will develop Employee information module to lessen the
difficulty of Accountant in terms of handling, searching and maintaining Employee
Records by replacing their manual system.

1.7 Scope and Limitation

1.7.1 Scopes

• Computation module for computation of the employees salary

• Keep the records of the employees.

• Generate reports.

1.7.2 Limitations

Daily Time Record or Attendance of each employee is not included in our system
because the attendance or working hours of each employee will be provided by
the SCAS Monitoring system using biometrics

1.8 Significance of the Study

1) For the system users (Accountant) – the study provides system that is simple
and easy to use and provides reliable outputs, and can store.
2) For the future researchers - the researchers could learn the base
requirements in the system development. They could learn basic
manipulation of the system and analyze the system flow.
3) For the proponents of the study – through the help of this system, the
proponent’s abilities and knowledge in making programs will be enhanced
and improved. It will be a great help them as it prepares the proponents to be
more exposed in organizing and socializing with other people; it also makes
them to focus into harder and difficult task in the gears to come.

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CHAPTER 2 REVIEW OF RELATED LITERATURE AND STUDIES

2.1 Local Literature

Blaze Payroll System is a simple payroll software package that automates payroll
computing and managing of employee accounting files. This is particularly designed for
small and medium-sized businesses to meet their specific payroll needs.

Monitor and manage your information like compensation packages, loans, deductions,
allowances and other benefits in your organization. Blaze system allows you to easily
comply with the timely submission of government mandatory contributions and reports.
Make payroll and tax computation fast and easy with Blaze.

Blaze was built on Smart Client architecture which allows you to use it even if you don't
have internet connection. Accounting data is also kept on your local data storage thus
giving you high security and control than a web-based system. For flexibility and more
comprehensive usability of your payroll system, this can be integrated with systems like
HRIS, Time-keeping and MS Accounting.

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Reference:

http://www.blastsuites.com/Payroll.aspx

2.2 Local Literature

OCS HR Philippine Payroll

OCS HR Philippine Payroll is a comprehensive HR and payroll system for easy setup
and calculation of payroll for Filipino

offi ce employees and seafarers. The solution handles multiple currencies and global
payroll, and has a major advantage

of having all personnel data in one system. The solution also includes government tax
reports and allotment.

What are the benefits of using OCS HR Philippine Payroll?

Same data used in both HR and payroll, retain and reuse basic data for use in planning
and payroll •

Wages calculated on basis of activities •

Import and export payroll transactions, and link to onboard system and hours registration
•

WEB interface, with employee’s personal details, and payslips available •

Onboard system •

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Advanced calculation of wage scale •

Advanced currency calculation for payroll, with unlimited number of currencies •

Payslip sent by e-mail •

Day balance and expired competence can be printed on payslip •

Flexible reporting with history and non-approved payroll at any time •

Unlimited number of rates and pay elements •

Ability to run separate or common payrolls for different categories of personnel •

Advanced access control •

OCS Payroll consists of the following data

Personnel information – Overview with all employee`s key data and picture •

Rates and pay elements •

Payroll calculation with Filipino tax calculation and social security contributions •

Currency •

Payslip for employee and allotee •

Payroll information, current and historical •

POEA Reports •

Leave pay •

Additional modules

Transfer to Accounting

Automatic transfer of approved payroll transactions to accounts system •

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Budget

Simplified setup and calculation of crew costs, i.e. wages and travel costs

Reference: www.onsoft.no/bilder/filer/ocshr/.../OCSHRPhilippinePayroll.pdf

2.3 Foreign Literature:

We are the Leading Payroll Software provider in Singapore for Payroll system, HR
software & HR system with all Singapore Payroll & HR requirements.

We also provide Fingerprint, Biometric, Proximity time recorders for employee time
attendance & door access. Our software package powered with one database
integrated Time Attendance software, Payroll software, HR and E-Leave software's.
For our complete product details please visit our parent web site at www.info-
tech.com.sg

Product Info-Pay Version 8.0

Name

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Introduction:Info-Pay 8.0 is a Payroll Software designed to suit for all kind of Singapore
Payroll requirements. our Payroll software is the window based
concurrent multi user access and multi company software with unlimited
employee capacity.

Our Payroll System does automatic calculation for PAY SLIP, SALARY
ADDITIONS, DEDUCTIONS, MVC (MONTHLY VARIABLE
COMPONENT), CPF, IR8A, IR21, BANK GIRO TRANSFER FOR ALL
MAJOR BANKS, SDF (SKILL DEVELOPMENT FUND), FWL (FOREIGN
WORKERS LEVY) , CDAC, SINDA, MBMF, etc…

Features:

Payroll Basic
Payroll
Leave & Staff System Payroll Software
Master House Reports
Keeping
Pay-slip in
Online CPF
Leave Module Concurrent Multi User Sealed Pay-slip
PAL
Paper
Leave
Entitlement
Online Bank Different Access leave
based on Join E-mail Pay-slip
GIRO for different user
Date /
Financial Year
Up to date
IR8A / IR21 Payroll Summary
Leave Prorate Multi Company
FORMS Report
as MOM Rule
Unpaid Leave
auto deduct Locking the Payroll
IR8A Auto Year to Date
from salary Period to protect from
Inclusion Summary Report
and show Pay- other user
slip

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 CDAC / Medical Claim
Backup / Restore Allowance Report
SINDA / MBMF Monitor
Annual Leave /
Medical Audit Trial - To monitor
Foreign Worker Career Tracking
Leave / Child changes done by other
Levy Report
Care Leave, users.
et...
Skill National
Work Permit / Birthday FUND / SDF /
Development Service Leave
Remainder FWL Report
Fund & Calculation
Monthly / Bi- Employee Bio-
Confirmation / S.O.C Annual Increment
Monty / Daily / Data with
Remainder Proposal Report
Hourly Pay PHOTO
Pay by Bank
Foreign Annual Bonus
GIRO / Cash /
Address Proposal Report
Cheque
Children Custom Report
Details Writer

Features:

• Monthly, daily and hourly rated employees can be paid monthly or

bi monthly.
• Pay slip can be printed in the concealed pay slip or A4 size paper.
• Pay slip for individual employees can be printed out at the Mid &
End of the Month.
• Payroll Summary report which shows the Basic Salary, Overtime
Pay, Shift Allowance, Deductions, Gross Wage, CPF contribution
details and Net Wage.

Reference: www.info-tech.com.sg

2.4 SYNTHESIS AND RELEVANCE TO THE STUDY

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Local literature:

BLAZE PAYROLL SYSTEM

Features:

Employee Menu : Employee Setup

Employees' personal information within your organization may be added, updated
or deleted manually using this feature. Some information required are employee
ID, full name, gender, marital status, birth date, hire date and termination date.
The employee records are arranged in boxes and you can double click each to
view the full details. This also includes a search feature..

-this feature shows full details of information of the employee that may help us in
giving ideas in creating the employee interface.

Transaction Menu : Payroll Period

A payroll period is needed to set the inclusive period for each payroll per tax year.
A tax year is set from January to December; and inside that year, payday can be
set as weekly, semi-monthly or monthly.

-this feature may help us in generating different payroll period reports.

Transaction Menu : Payroll Process Wizard

This guides the user step by step in going through the whole payroll process. All
the needed computation for your payroll is automatic after you set the required
payroll items like overtime, tardiness, performance appraisal, holiday pay,
allowances, deductions, etc. The system was built abiding by the government's
policies, so you'll have no worry missing out one.
-this feature shows automatic computation for payroll that given us an overview
to provide a much efficient payroll system.

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 Transaction Menu : Transaction History
Every payroll transactions made and each detail are kept in the database for
future reference.

-this feature also keeps record in every transaction for future references.

Reference Menu : User Editable Philhealth/ SSS/ Pag-ibig Tables

Government mandatory deductions have to be maintained to have a reference of
how much are the employee and the employer's contributions to these
deductions.

-this feature may help us to provide editable government mandatory deductions

module.

Reference Menu : Employment Status

Employment status like probationary, regular, contractual, resigned are
examples of status that can be set to address company's needs.

Reports Menu : Payslip

Under report module, pay slip can be generated by transaction and by
payroll period.

Reference: http://www.blastsuites.com/Payroll.aspx

Chapter 3: Research Methodology

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3.1 SPECIFIC METHODS FOR DATA COLLECTION

Since our own school is our client, we have decided to have a personal interview
with our client. The project team talked to the accountant for gathering of data about the
system specification, needed for creating our proposed system that can help them for
their payroll system in an efficient manner.

a) Method of research to be used

3.1.1 Interview
During requirements gathering stage, the proponents conduct interview with the
accountant of Sumulong College of Arts and Sciences who gave the resources
about the flow of the current system and the process of computing the salaries of
the employees.

3.1.2 Observation
The proponents had some inspection regarding the current system to gather
more ideas on how to design our proposed system. From this observation, we
noted some problems being encountered by the payroll clerk.

3.1.3 Internet Research

The proponents also conduct an internet research to gather more data and
topics that are related to our study.

3.1.4 Library Research

The proponents also used library materials like thesis documentation and books
that are related to our study in gathering significant information and validation of
our study.

3.2 SPECIFIC METHODS OF DESIGN

Rapid Application Development (RAD) is a software development methodology

that focuses on building applications in a very shirt amount of time. Traditionally with

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compromises in usability, features and/or execution speed. The term has recently
become a marketing buzzword that generically describes applications that can be
designed and developed within 60-90 days, but it was originally intended to describe a
process of development that involves application
prototyping and iterative development.

ANALYSIS AND QUICK DESIGN

The aim of the Analysis and Quick Design Stage is to gather the
software requirements specification and perform rapid design creation based on
the requirements. Meetings between requirement planning team and key client
users will be established at the beginning of the project life. This stage will
develop details and specific requirements based on the proposed functionalities.

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 The Quick Design Phase will involve the presentation of details
requirements from Analysis Phase, developing the required data model. The
result of this stage will be the screen flows and layouts for essential parts of the
system. Along with this, the system and unit test plans will be put in place for the
designed system. During this stage it is imperative to identify the core
requirements of the entire system and should be targeted for the initial
development of the prototype, and secondary requirements should be identified
and targeted for future development iterations.

CONSTRUCTION (PROTOTYPING CYCLES)

During this stage, the team will develop the application in iterative cycles
of development, testing, requirements refining and development again until the
development is completed. The team will convert the data model into a functional
database. In this stage, it is vital to deliver each iteration on time, while additional
functionality may be scheduled for development after the initial release. Once the
prototype has been developed, the team will test the initial prototype using test
scripts from the Quick Design stage. Review will be conducted on the initial
prototype that includes design team and customer/client review team. The next
iteration requirements determination will be conducted after the review.

REFINING REQUIREMENTS

Refining requirements happens repeatedly during this stage. Identifying

the core and secondary requirements shall be performed for all iterations. The
team will update the requirements, data models, test scripts and project plan as
during the Design Stage. The iteration plan will be developed and customer will
be notified and then the lifecycle will continue. During the final iterations of

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 development, the design team will update user documentation, perform User
Acceptance Testing and define the steps necessary for
deployment/implementation.

TESTING

During this stage the test focuses on the finished application rather than
the prototypes iterations. User Acceptance Testing is performed in this stage by
the technical team and the client.

IMPLEMENTATION

This stage will focus on integration the new system into the live system
(website hosting). The development team will prepare the transfers and migration
to the live system. Troubleshooting and system integration test will be performed
in this stage to ensure the site goes live smoothly.

e) Data Gathering Procedure

• Library Research - SQL Books, VB Books

• Internet Research- Codes, related systems
• Interview – company Info, computations

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