GRADUATION THESIS Topic Accounting for Payroll And Payroll Deductions At Thien Ung Services Training Company Limited

Graduation Thesis

MINISTRY OF FINANCE
ACADEMY OF FINANCE
----------------------------------

Student: NGUYỄN THỊ HOA
Group: CQ54/51.02

GRADUATION THESIS

Topic: Accounting for Payroll And
Payroll Deductions At
Thien Ung Services Training Company Limited

Major: English for Finance and Accounting
Student code: 165D2202010048
Supervisor: MSC. Cao Phuong Thao

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Graduation Thesis

Ha Noi - 2020
RESEARCH PROPOSAL
DETAILED OUTLINE
DECLARATION
ABSTRACT
ACKNOWLEDGMENTS
LIST OF ABBREVIATIONS

LIST OF FIGURES AND TABLES
TABLE OF CONTENTS
INTRODUCTION
1.Rationale of the study
2.Aims of the study
3.Scope of the study
4.Methodology of the study
5.Organization of the study
CHAPTER 1: LITERATURE REVIEW.
1.1. Overview of payroll and the payroll deduction
1.1.1 Definitions
1.1.1.1 Payroll
1.1.1.2 Payroll deduction
1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions
1.1.2 Payment methods
1.1.2.1 Job-based salary
1.1.2.2 Time-based salary
1.1.2.3 Other forms of payment
1.2

Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll and payroll deductions
1.2.2 Accounting for payroll

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Graduation Thesis

1.2.2.1 Vouchers used
1.2.2.2 Accounts used
1.2.3 Accounting for payroll deductions
1.2.3.1. Social insurance
1.2.3.2 Health insurance
1.2.3.3. Unemployment
1.2.3.4. Trade union
1.3

Accounting books used

1.3.1 General Journal
1.3.2. General Ledger
1.3.3. Journal voucher
1.3.4. General journal voucher
1.4 Factor influencing accounting for salary and salary deductions
1.4.1 Internal factors
1.4.2 External factor
CHAPTER 2: THE STUDY
2.1. Overview of Thien Ung Service Traning Company Limited
2.1.1 Establishment and development of Thien Ung training service accounting company
2.1.2 The main activities and the organization of Thien Ung training service accounting
company
2.1.3. The features of accounting system of Thien Ung training service accounting
company
2.1.3.1. Organization of the accounting system
2.1.3.2 Accounting form, applied accounting policy and reporting system at the company
2.1.3.3. The feature in condition of using accounting software
2.2 The current situation of accounting for payroll and the payroll deductions at
Thien Ung Service Traning Company Limited

2.2.1 The features of labor, payroll and payroll deductions at Thien Ung training service
accounting company
2.2.2 Payment methods and salary calculating methods
2.2.3 Vouchers and accounts used

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Graduation Thesis

2.2.4 Accounting for salaries and bonuses
2.2.5 Accounting for payroll deductions
2.2.5.1 Social insurance
2.2.5.2 Health insurance
2.2.5.3 Unemployment insurance
2.2.5.4 Trade union fees
CHAPTER 3: Recommendations
3.1 The evaluation of current situation of accounting for payroll and the payroll
deductions at Thien Ung Service Traning Company Limited
3.1.1 Advantages
3.1.2 Disadvantages
3.1.3 Causes
3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung
Service Traning Company Limited
3.3.1 Improving payroll management
3.3.2 Adjusting salary calculation form
3.3.3 Improving training of manager and workers
3.3.4 Improving salary policy
3.2.5 Using reasonable bonuses policy
CONCLUSIONS

REFERENCES
APPENDIXES

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Graduation Thesis

DECLARATION
I guarantee that this thesis is my own work and it is my own experience in the training
time.
The data and results described in the thesis are exact and it originate from the actual
situation of the practice company.

Hanoi, 16th February, 2016
Hoa
Nguyễn Thị Hoa

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Graduation Thesis

ACKNOWLEDGEMENT
Firstly, I would like to express sincere thanks to Academy of Finance (AOF) for giving
me opportunity to study and research my into educational reality
I do not know how to express my appreciation to Ms. Cao Phuong Thao, my supervisor,
who gives valuable advice, perceptive comments as well as her enthusiasm supports and
careful supervision.
I really appreciate all my lecturers at the Academy of Finance for their assistances,

directions and encouragement, it is main factor for me to complete excellently the study
of educational reality.
I have furthermore to thank for the help of THIEN UNG SERVICE TRAINING
COMPANY LIMITED and people in the company who give me opportunity to practices
in the company in the pastime
Especially, my friends from Foreign Languages also supported me in my thesis, I would
like to thank them for all their support and suggestion. I also would like to give my thanks
to my beloved family crating motivation for me to complete my graduation thesis.
Finally, because of limitation of time and knowledge, my mistakes are unavoidable, so I
wish to have more opportunities. I also wish to receive more contribution and suggestion
to get a better project.

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Graduation Thesis

ABSTRACT
New In the current period, the trend of integration and globalization of the world
economy takes place, enterprises in general are under pressure of competition by other
country. Therefore, in order to increase the integration process and improve the efficiency
of the production and business activities, businesses need to find effective working
methods. The important goal of a business is to maximize profits. The profit earned by a
business depends on both objective and subjective factors. Payroll regime is also an
importance factors that company should focus on, so this thesis would make clear this
issue.
This study is about the regime of wages and bonuses at THIEN UNG SERVICE
TRAINING COMPANY LIMITED. First, the main purposes are providing deep
understanding about salaries, bonuses, insurances defines their theories and the important
of paying salary for their employee and the necessary of the payroll accountant. Next, it

will consider the applications, the achievements and limitations of payroll regime at
THIEN UNG SERVICE TRAINING COMPANY LIMITED, as an illustration for the
academic background. Finally, there are many proposals and solution for the company to
improve their payroll accounting regime. In conclusion, this study would have a part in
improving the regime of payment of salaries, wage, bonuses and insurances at the
company. Hopefully, the adjustment could help company get a better payroll regime in
the future, and it also would be a great reference for other company

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Graduation Thesis

Part I: Introduction
1. Rationale
Labor is the most important input factors of every business. Improving labor productivity
is the basic way to improve business efficiency and create reputation of businesses in
competitive market.
For enterprises, to survive and develop, they must find ways to improve production and
business efficiency. Therefore, the management of wages and salary deductions must be
paid attention. Other activities will not be effective, or even ineffective if this work will not
be paid enough attention.
In today's market economy, labor and salary management organization is an important
content in the business management of enterprises, it is one of the most important factors
that determine quantity and quality of goods and products.
Payroll and payroll deductions for the employees always receive great concern because of
its social-economic significance. For the employees, these payments are important because
they could be their sole incomes, to support their whole families’ lives. For every business,
it accumulates in the expense account that takes up a great proportion in total costs. It can
be the driving force behind the increase of labor productivity, if it is paid basing on

employee's productivity. Therefore, how to construct wage regime and how to select an
appropriate payment form are very necessary. Payroll issue is not new, however there are
some deficiencies which are need to adjust to get an effective work of paying salary, wage,
bonus and insurance in enterprises. As the result, Enterprises could ensure that, their
employee can get suitable salary, thus companies can save cost and increase profits.
Understanding the paramount importance of the payroll accounting work in enterprises so
in the process of practice as well as completing the subject of graduation, with the
enthusiastic advices of my teacher - Ms Cao Phuong Thao and the support of financial
accounting department's personnel, I decide to choose the subject: "Accounting for payroll
and payroll deduction at Thien Ung service training company limited " as graduation thesis
topic.

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Graduation Thesis

2.Aims of the study
When studying “Accounting for payroll and payroll deduction”, there are three main
objectives which I want to clarify. First, providing basic information to understand the
concept of salary, payroll deductions, bonus and insurance. Second, the ways that enterprise
use to made payment for their employee, taking the scenario at Thien Ung Service Training
company limited as a case for study, and reviewing their advantages and disadvantages.
Finally, it is to suggest possible solutions to improve the payroll accounting and the payroll
related to insurance at
3.Subjects and Scope of the study
The study provides analysis and reviews the work of payroll accounting and payroll
deduction at Thien Ung training service company limited. Research scope: research scope
limited in Thien Ung training service company limited Time study: metrics used mainly
are February 2019.

4. Methodology
In order to finish graduation thesis, many methods are applied such as collecting and
synthesizing data, analyzing by tables, diagrams and using mathematical. Firstly, Methods
for collecting and synthesizing data include many ways to collect information and data
supporting graduation thesis. For example, I work and contact the financial-accounting
department of the Company to collect data about payroll accounting and payroll deduction
in February 2019 of the Company. Besides, using many tools to get information about the
situation of payroll accounting and payroll deduction in Vietnam such as: Internet,
newspaper, financial news and many colleagues or studying many graduation theses and
many related topics. Secondly, Comparison is another method. This is method that used to
compare the similarities and differences of an issue. In reality, applying this method, I
compare between theory and practices about payroll accounting and payroll deductions in
the Thien Ung service training company limited, so finding out the deficiencies of the
company. Thirdly, using analysis by table and diagrams is an efficient method. Finally, I
use Mathematical method which using mathematical formulas to calculate the payments to
the employees.

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Graduation Thesis

5.Organization
Chapter 1: Literature review

Chapter 2: The current situation of accounting payroll and the payroll deduction to
at Thien Ung service training company limited
Chapter 3: Recommendations to improve payroll regime and payroll deduction at
Thien Ung service training company limited

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Graduation Thesis

Part II: Main content
CHAPTER 1: LITERATURE REVIEW

Contents
Overview of payroll and the payroll deduction .......................................................................2

1.1.

Definitions .......................................................................................................................2

1.1.1
1.1.1.1

Payroll..........................................................................................................................2

1.1.1.2

Payroll deduction ..........................................................................................................2

1.1.1.3

The roles, tasks and functions of accounting for payroll and payroll deductions .................2

1.1.2

Payment methods..............................................................................................................2

1.1.2.1 Job-based salary ...............................................................................................................2
1.1.2.2

Time-based salary .........................................................................................................2

1.1.2.3

Other forms of payment .................................................................................................2

1.2

Accounting for payroll and payroll deductions ....................................................................2

1.2.1

Definition and role of accounting for payroll and payroll deductions.................................2

1.2.2

Accounting for payroll...................................................................................................2

1.2.2.1 Vouchers used ..................................................................................................................3
1.2.2.2 Accounts used ..................................................................................................................3
1.2.3 Accounting for payroll deductions ........................................................................................3
1.2.3.1. Social insurance...............................................................................................................3
1.2.3.2 Health insurance ...............................................................................................................3
1.2.3.3. Unemployment ................................................................................................................3
1.2.3.4. Trade union .....................................................................................................................3

1.3

Accounting books used ....................................................................................................3

1.3.1

General Journal ................................................................................................................3

1.3.2.

General Ledger .................................................................................................................3

1.3.3.

Journal voucher ................................................................................................................3

1.3.4.

General journal voucher ....................................................................................................3

1.4
1.4.1

Factor influencing accounting for salary and salary deductions .............................................3
Internal factors..................................................................................................................3

1.4.2 External factor ........................................................................................................................3
2.1. Overview of Thien Ung Service Traning Company Limited........................................................3

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Graduation Thesis
2.1.1 Establishment and development of Thien Ung training service accounting company ....................3
2.1.2 The main activities and the organization of Thien Ung training service accounting company ........3
2.1.3.

The features of accounting system of Thien Ung training service accounting company ..........3

2.1.3.1. Organization of the accounting system ..............................................................................3
2.1.3.2 Accounting form, applied accounting policy and reporting system at the company ................3
2.1.3.3. The feature in condition of using accounting software ........................................................3
2.2
The current situation of accounting for payroll and the payroll deductions at Thien Ung
Service Traning Company Limited....................................................................................................3
2.2.1
The features of labor, payroll and payroll deductions at Thien Ung training service accounting
company 3
2.2.2

Payment methods and salary calculating methods ...............................................................3

2.2.3

Vouchers and accounts used ..............................................................................................3

2.2.4 Accounting for salaries and bonuses .........................................................................................4
2.2.5 Accounting for payroll deductions ............................................................................................4
2.2.5.1 Social insurance ..............................................................................................................4
2.2.5.2 Health insurance ...............................................................................................................4

2.2.5.3 Unemployment insurance ..................................................................................................4
2.2.5.4 Trade union fees ...............................................................................................................4
3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien
Ung Service Traning Company Limited ............................................................................................4
3.1.1 Advantages .............................................................................................................................4
3.1.2 Disadvantages .........................................................................................................................4
3.1.3 Causes ....................................................................................................................................4
3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service
Traning Company Limited ............................................................................................................4
3.3.1 Improving payroll management ................................................................................................4
3.3.2 Adjusting salary calculation form .............................................................................................4
3.3.3 Improving training of manager and workers ..............................................................................4
3.3.4 Improving salary policy ...........................................................................................................4
3.2.5 Using reasonable bonuses policy ..............................................................................................4
1. Rationale ........................................................................................................................................8
2.Aims of the study .............................................................................................................................9
3.Subjects and Scope of the study ........................................................................................................9
4. Methodology ...................................................................................................................................9

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Graduation Thesis
5.Organization .................................................................................................................................10
1.1 Overview of Payroll and Payroll deductions ..............................................................................15
Definitions .....................................................................................................................15

1.1.1

1.1.1.1 Payroll ...........................................................................................................................15

1.1.1.2 Payroll deductions ..........................................................................................................16
1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions ..................17
1.1.2 Payroll methods ....................................................................................................................19
1.1.2.1 Job-base salary ...................................................................................................................19
1.1.1.2 Time-base salary.............................................................................................................20
1.1.2.3 Other form of payroll ......................................................................................................22
Accounting for payroll and payroll deductions .....................................................................22

1.2

1.2.1 Definition and role of accounting for payroll, payroll deductions ..............................................22
Accounting for payroll ....................................................................................................23

1.2.2

1.2.2.1 Vouchers used ................................................................................................................23
1.2.1.2 Accounts used ................................................................................................................24
Accounting for Payroll deductions ...................................................................................24

1.2.3
1.2.3.1

Social Insurance ..........................................................................................................26

1.2.3.2 Health Insurance .............................................................................................................26
1.2.3.3 Unemployment Insurance................................................................................................27
1.2.3.4 Trade union ....................................................................................................................28
1.3 Accounting books used...............................................................................................................29
1.3.1 General journal .....................................................................................................................29
1.3.2 Journal Ledger ......................................................................................................................30

1.3.3 Journal Voucher ....................................................................................................................32
Diagram 3: Diagram of accounting for payroll and payroll deductions recorded in the Journal
voucher form............................................................................................................................33
1.3.4 General Journal Voucher........................................................................................................33
1.4

Factors influencing Salary and Salary deductions ................................................................34

1.4.1 Internal Factors .....................................................................................................................35
1.4.1.1 Supply demand of labor market .......................................................................................35
1.4.2 External Factors ....................................................................................................................35
1.4.2.1 Working environment of enterprise ..................................................................................35
1.4.2.2 Employees......................................................................................................................36
2.1 Overview of Thien Ung Service Training Company Limited......................................................38
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Graduation Thesis
2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited ..38
2.1.1.2 The development of Thien Ung Training Service Accounting company Limited .................39
2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company
Limited .........................................................................................................................................40
2.1.2.1 The main activities of Thien Ung Training Service Accounting Company Limited ..............40
2.1.2.2 The organization of the company .....................................................................................41
2.1.3 The features of accounting system of Thien Ung Service Training Company Limited ................43
2.1.3.1 The organization of accounting system .............................................................................43
2.1.3.2 Accounting form, applied accounting policy and reporting system at the company ..............45
2.1.3.3 The feature in condition of using accounting software .......................................................48
2.2
The current situation of accounting for payroll and the payroll deduction at Thien Ung Service

Training Company Limited ................................................................................................................48
2.2.1
The features of labor, payroll and payroll deduction at Thien Ung Service Training Company
Limited 48
2.2.2 Payment methods and salary calculating methods ....................................................................52
2.2.3 Vouchers and accounts used...................................................................................................54
2.2.4 Accounting for salaries and bonuses .......................................................................................55
2.2.4.1 The policy of accounting for salaries and bonuses .............................................................55
2.2.4.2 Accounting procedures....................................................................................................57
2.2.5 Social insurance allowance for employees...............................................................................80
2.2.5.1 Social Insurance regime. .................................................................................................80
2.2.5.2 Social insurance allowance application .............................................................................81
2.2.6 Accounting for payroll deduction ...........................................................................................88
2.2.6.1 Social Insurance .............................................................................................................88
2.2.6.1 Unemployment Insurance................................................................................................88
2.2.6.3 Trade Union ...................................................................................................................88
2.2.6.4 The calculation payroll deduction at Thien Ung Service Training Company Limited ...........90
3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien Ung
Service Training Company Limited ..................................................................................................110
3.1.1 Advantages .........................................................................................................................110
3.1.2 Disadvantages .....................................................................................................................111
3.1.3 Causes ................................................................................................................................112
3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Training
Company Limited ...........................................................................................................................112
3.2.1 Improving a clear allowance and subsidy regime ...................................................................112
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Graduation Thesis
3.2.2 Improving management policy ............................................................................................112

3.2.3 Improving training of manager and workers ..........................................................................112

1.1 Overview of Payroll and Payroll deductions
1.1.1 Definitions
Labor: is the consumption of labor force in reality. Labor is purposeful, conscious activities
of people to create products to serve the needs of society life. Labor is the most typical and
creative activity of man.
The labor costs definition is the total cost of all labor used in a business. It is one of the
most substantial operating costs. These are particularly important in any business which
experience heavy human resource labor costs: construction, manufacturing, and other
industries which have partially or non-automated operations. These costs include 2 main
subcategories. The direct labor costs definition is summarized as the cost of labor which is
used directly to make products. Meanwhile, the indirect labor costs definition is simply
explained as the cost of labor which is used to support or make direct labor more efficient.
Whenever a worker activity takes place, the enterprise must pay for all kinds of materials,
attrition of tools and tools for production process and money paid to laborers. Labor costs
are one of the three cost factors that make up the value of products made by businesses.
High or low labor costs affect product costs. Therefore, in order to manage production costs
well, firstly, it is necessary to strictly control labor expenses and to manage wages from
two basic criteria: quantity and quality of labor.
1.1.1.1 Payroll
Payroll is the total of all compensation a business must pay to its employees for a set period
of time or on a given date. It is usually managed by the accounting or human
resources department of a business; small-business payrolls may be handled directly by the
owner or an associate. Increasingly, payroll is outsourced to specialized firms that handle

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Graduation Thesis

paycheck processing, employee benefits and insurance, and accounting tasks such as tax
withholding.
Laborers, after using their labor power to create products, shall be paid a certain amount
of wages. On the other hand, we see that labor is exchanged for wages. So labor can be
considered a commodity, a special commodity. And wages are the prices of those special
goods, labor goods. Because goods of labor need to be exchanged on the labor market on
the basis of an agreement between the buyer and the seller, affected by the law of value, the
law of supply and demand. Therefore, labor prices will vary according to the price of the
constituent elements as well as the supply-demand relation of labor. Thus, when
considering wages as the value of labor, this price will form based on an agreement between
the employee and the employer. Payroll may increase or decrease depending on the supply
and demand of labor goods. Thus, the price of wages often fluctuates but it must revolve
around the value of labor power, as other common goods, it requires exactly of its value.
On the other hand, the fluctuations in payroll must ensure the minimum living standards so
that workers can survive and continue working.
1.1.1.2 Payroll deductions
Payroll deductions are amounts withheld from an employee's payroll check, and these
amounts are withheld by their employer. Among these deductions are insurance pension
contributions, wage assignments, child support payments, taxes, and union and uniform
dues. Deductions that are mandated are government taxes; however, all other deducted
amounts are voluntary.
No matter how many hours an employee has worked, payroll deductions must be withheld
from payroll checks. In the event that no deductions are withheld, the employer becomes
liable and responsible for any mandated amounts that were supposed to be withheld. When
an employee's insurance deductions are not withheld, the employer becomes liable to pay
the deductions or to cancel the employee's insurance policy. It is always an employer's
responsibility to make sure any payroll deduction is withheld in a timely manner.
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Graduation Thesis

Payroll deductions include:
-

Social Insurance

-

Health Insurance

-

Trade Union Fee

-

Unemployment Insurance.

In conclusion, salaries paid to employees, along with deductions for social insurance, health
insurance, unemployment insurance, trade union fee constitute labor costs in the total cost
of production and business.
In addition to the payroll and salary deductions, the company has also built bonus regime
for individuals with achievements in production and business activities. Bonuses for
stimulating employees in production and business activities include: emulation bonus,
reward for improving product quality, saving materials and giving incentives for technical
innovations, …
1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions
 The role of accounting for payroll and payroll deductions

Payroll accountancy is one of the most essential accounting functions within an
organization that demands unique set of skills for the management of payrolls of the
company.
Good accounting for payroll and payroll deductions helps the personnel management in
disciplined manner. Also, it creates a basis for enterprises to pay insurance allowances
reasonably.
Well organized accounting for payroll and payroll deductions not only helps manage
salaries strictly, ensuring paying salaries in accordance with policies, but also is a basis for
calculating the allocation of labor costs and business costs properly.
 Tasks
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Graduation Thesis

The payroll and payroll deductions tasks include the following basic tasks:
-Organizing to record; reflecting and synthesizing data on the number of employees, time
of labor results; calculating wages and deduction of salary amounts, allocating labor costs
according to the subjects of labor use.
-Instructing and checking accounting staff in production and business departments and
departments to implement the initial records of labor and wages according to the proper
regime and methods.
-Monitoring the situation of payment of salaries, bonuses and allowances for employees.
- Making reports on labor, wages, salary deductions, periodically labor situation analysis,
situation of management and spending of salary fund, providing information on wage labor
for the department management in time
Payroll and payroll deductions is not only a noticable topic because it is an importance
expenditure of the business but also a special concern for employees because this is their
right. Moreover, workers use wages to stabilize their daily lives, serving their daily
necessities.

 Functions
-Function of measure of value, which is the basis for managing prices properly when prices
fluctuate (including labor).
- Function of encouraging employees: To ensure that workers work effectively and with
high productivity, the principle of wage must be raised to increase economic benefits for
employees, creating passion for the profession, promoting the spirit of creative work.
Employees are willing to self-study to improve professional qualifications, science and
technology, from which work effectively with the adequate salary.

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Graduation Thesis

- Function of supervising employees: Helping the employer through paying wages,
inspecting and monitoring workers who work according to their topics, ensuring the wages
paid as effective as possible.
- Labor administration function: The function of ensuring the role of the labor coordinator
in a reasonable manner with the fair and satisfactory wage, the employee will voluntarily
carry out the work assigned anywhere or anytime.
1.1.2 Payroll methods
1.1.2.1 Job-base salary
Payroll by products based on products implies the payment of wages to employees based
on the quantity and quality of completed work products.
Formula

Job
salary

-

based

=

Unit of products

x

Rate per
unit

Job – based salary form including:
+ Salary form based on products directly produced by direct labor
Salary paid to employees is calculated directly according to the number of finished products
which reach quality standards.
+ Salary paid for indirect labor
The salary is paid for indirect labors who have no physical association with the finished
product or it’s impractical to trace the costs. So, this form still has several limitations.

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Graduation Thesis

However, there is a clear link between the value of the job performed to the company and
the level of pay when applying this form. So, it helps encourage employees to work harder
and better to improve labor productivity as well as increase their salaries. However, It is
complicated to administer and expensive to operate. This system is suitable to direct labors.
And such a system is most effective in the circumstance where jobs are clearly defined.

1.1.1.2 Time-base salary
This is a form of payment for employees based on working time, wage level and wage
scale. This method is mainly applied to indirect workers, stable jobs or maybe even direct
workers without product norms.
In the enterprise, the payroll by time is applied to office staff such as administrative
administration, labor organization, statistics, finance and accounting. Time-based payment
is a form of compensation for employees based on their actual working time, occupations
and professional and technical proficiency levels of employees. Each occupation specific
job characteristics that apply different wage levels. Professional and technical proficiency
divided into several wage scales, each salary level has a certain salary, which is the basis
for payment of wages, wages over time can be divided.
Time-based salary per month
As salary paid to employees by month, the wage level is calculated
over time is 1 month.

Minium wage
The actual number
Wage paid in months

=

The number of
working days in
month

20

x

of working days of

employees in month


Graduation Thesis

Time-based salary per week
Wages are wages for employees based on weekly wage and number of working days in a
month.

Monthly salary
Wage paid in weeks

=

x

12

52 weeks
Time-

based

salary per day
Hourly rates can be calculated directly to pay hourly rates or based on daily wage for
overtime allowances for employees.

Daily wage
Wage paid by hour

=
The number of working hours in
month as prescribed

The disadvantage of payroll by time is too general, the military sometimes does not match
the actual labor results of the employees.

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Graduation Thesis

1.1.2.3 Other form of payroll
Payroll base on turnover is a form of payment / bonus whose income depends on the
turnover achieved according to the sales target and the company's salary / bonus policy.
Usually applied to sales staff ...
There are many types of salary base on turnover
+ Personal salary and bonus
+ Group salary and bonus
1.2 Accounting for payroll and payroll deductions
1.2.1 Definition and role of accounting for payroll, payroll deductions
 Definition of accounting for payroll, payroll deductions
Accounting for payroll play a vital role in all companies with a staff of employees. Both
small and large businesses alike must comply with local, state and federal laws specific to
payroll reporting and compliance regulations. In essence, payroll accountants act as
liaisons that perform financial and reporting activities between a business organization,
their employees and the government.
Payroll and payroll deductions is not only a notice topic because it is an importance
expenditure of the business but also a special concern for employees because this is their
right. Workers use wages to stabilize their daily lives, serving their daily necessities.

 The roles of accounting for payroll, payroll deductions
Payroll Accountanting and Payroll deductions cover a wide range of tasks that are
essential for timely, accurate and efficient payroll operations abiding by federal, state and
local laws. Payroll Accountants and payroll deducitons need to have a comprehensive
understanding of fundamental tasks, such as paycheck calculations, taxation principles,
preparing ledgers and journals, transfers and journal entries and deposits. Their main role

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Graduation Thesis

is responsible for appropriate disbursement of funds, maintaining and updating employee
leave balance information.
1.2.2 Accounting for payroll
1.2.2.1 Vouchers used
Vouchers used in accounting for payroll and payroll deductions are made for the purpose
of monitoring the use of working time, payables for employees in enterprises such as
salaries, wages, allowances, bonuses, working-trip allowances, overtime pay, payables for
other organizations and some other content related to wages or labor.
The accounting vouchers consist of:
- Form 01a – LDTL – Timesheet: is a method for recording the amount of a worker's time
spent on each job by month or by week.
- Form 02 – LDTL – Timesheet for overtime
- Form 03 – LDTL – Wage payment table: Each production group, each management
department creates a wage payment table, which lists the names and the paid wage
amounts of each person in the group.
- Form 04 – LDTL – Bonus payment table: This table is made for each production group,
each department, business division ... these payment tables are the basis for payment and
deduction of other amounts such as social insurance, health insurance... for workers

- Form 06 – LDTL – Overtime pay table
- Form 08 – LDTL – Exchange contract: This form is a contract signed between the
employer and a person about the workload, working time, responsibilities and interests of
each party when performing that job. When the job is done, then the end of contract. It is
also a basis for paying wages to the contractor.

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Graduation Thesis

1.2.1.2 Accounts used
Account 334: payable to employees
334: Account 334: payable to employees
This account is used to reflect the amount of money and the situation of the amount of
payments payable to the personnel of enterprises about salaries, wages, bonuses, and
other amounts which belongs to the personnel's income. In enterprises this account is also
used to reflect the wages to pay for outsourced employees.
The structure and the content of reflection of the account 334
Debit

Account 334

Credit

- Deductions of salaries and wages from the

- Amounts payable to employees

employees’ salaries

such as salaries, wages, bonuses

- Salaries, wages, bonuses, social insurance

and social insurance

and other amounts which have been paid or
advanced to employees
Debit balance (if any) shows overpay for

Credit balance shows salaries,

employees.

wages and other amounts payable
to employees.

1.2.3 Accounting for Payroll deductions
 Vouchers used
Form no 10-LDTL: The list remitted wages
Form no 11-LDTL: Allocation table wages and social insurance
 Accounts used

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Graduation Thesis

Account 338: "payable and submitted": used to reflect the amounts payable and

submitted to legal authorities, organizations, social associations, for superior about the
expenses of union, social insurance, health insurance, payroll deductions according to
the decision of court (the money raising child upon divorce, legal costs, etc.) the value
of excess asset waiting to process, short-term bet, encash for someone, keeping money
for someone...

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