NETWORK BASED PAYROLL SYSTEM FOR NOVELETA MUNICIPAL OFFICE

An Undergraduate Research Proposal Presented to The Computer Studies Department College of Science De La Salle UniversityDasmarias

In Partial Fulfillment of the Requirements for the Degree of Bachelor of Science in Computer Science

Melju Fatima B. Atog Romel G. Cruz Joanna Marie R. Marce

October 2008

TABLE OF CONTENTS

Table of Contents List of Appendices Acknowledgement Abstract

i iv v vi

1. 0. INTRODUCTION 1.1. Background of the Study 1.2. Statement of the Research Problem 1.3. Statement of the Objectives 1.4. Significance of the study 1.5. Scope and Limitations of the study 1.6. Methodology of the Study 2.0. RELATED LITERATURE 2.1. Local Literature 2.2. Foreign Literature 3.0. THEORETICAL FRAMEWORK 3.1. Statement of Assumptions 3.2. Operational Definition 3.2.1 Definition of Terms 3.2.2 Definition of Processes 3.3. Theories used in the study

1 1 3 4 5 6 7 10 10 14 18 18 18 18 22 23

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4.0. THE EXISTING SYSTEM 4.1. Description of the System 4.2. Definition of Data Capture 4.3. Inputs 4.4 Processes 4.5. Files 4.6. Outputs 4.7. Problem Areas 5.0. THE PROPOSED SYSTEM 5.1. System Overview 5.2. System Objective 5.3. Scope 5.4. System Justification 6.0. SYSTEM DESIGN 6.1. Inputs 6.2. Processes 6.3. Files 6.4. Output 7.0. IMPLEMENTATION 7.1 Resource Requirements 7.1.1 System Requirements 7.1.2 Hardware Requirements

28 28 29 31 32 35 38 41 43 43 45 45 47 49 49 52 55 59 61 61 61 61

iii 7.1.3 Human Resource Requirements 7.2. Installation Plans 7.2.1 System Installation 7.2.2 Training Plans 7.2.3 Conversion Plans 7.2.4 Testing 8.0. CONCLUSION AND RECOMMENDATION 8.1 Conclusion 8.2 Recommendation 62 63 63 63 64 65 67 67 68

Appendices Bibliography

iv LIST OF APPENDICES

A. DFD of Existing System B. DFD of Proposed System C. Entity Relationship Diagram D. Normalization E. Screen Shots

69 74 89 81 85

ACKNOWLEDGEMENT

The proponents would like to express their deepest gratitude to those who helped them complete this thesis. Huge thanks to their parents for a lifetime love and support and for providing them with financial and everything they need. Their adviser, Ms. Sherry Bautista, who has been there from the start to guide, help and support them. Ms. Maryli Rosas and Ms. Marilyn Bansagan for their remarks BCS 44 for their encouragement and help.

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ABSTRACT

Noveleta Municipal Office is located at Noveleta, Cavite. Currently, the Municipal Office has 200 employees who are categorized into two types: Regular Employee and Employee with Job Order. They use manual system for their payroll. Because of the numerous employees working in the municipality, they have difficulty computing the salary for every pay period. Thus, an automated payroll system was proposed to improve their manual payroll process. Network-based Payroll System for Noveleta Municipal Office was developed to provide accurate and efficient salary computation. It aimed to lessen the work done and time allotted in doing the payroll. It provides security and easy file maintenance. It also generates necessary reports. The proposed system was developed using Microsoft Visual Basic.net programming language, Microsoft SQL Server 2005 for the Database, and Crystal Reports v.9 for the report generation.

CHAPTER 1 Introduction

1.1 Background of the Study Technology nowadays is rapidly developing. In business, computerized systems with different purposes are used to cope up with the modern world. One of the systems that are being developed is the payroll system which involves the process of salary computation. During the early years, Noveleta was a barrio of Kawit. Its restful atmosphere, brought by the sea, wind and beautiful sunset, and complemented by its warm, hospitable, amiable people had both attracted vacationers from all places. Through the years, Noveletas population increased considerably. This prompted Gov. Gen. Jose Gandara to have it separated from Kawit to become an independent town. Currently, the Municipal Office has 210 employees who are categorized into two types: Regular Employee and Employee with Job Order (EJO). Regular Employees are those included in the Plantilla Positions and receive benefits, while EJO such as the Street Sweepers and Office Clerks are those who do not receive benefits. Regular employees receive PERA, 13 month pay, ADCOM, clothing allowance and Productivity Allowance. Added benefits such as the RATA, Travel Allowance and Cash Gift are given only to the Office Heads. Employees under the offices of Department of Agriculture, MSWD, and MHO are also regular employees but they have different computation because their salary is specified by their National Office. MHO receives additional benefits such as Hazard Pay, Subsistence and Laundry. Regular employees are given different kinds of leave, namely: vacation leave, maternity leave, force leave and sick leave. They are allotted with 1.25 days of allowable leave per month.

If the point is not fully consumed within the month, it is added to points allotted for the succeeding months. The deductions from the salary of each employee are Philhealth, GSIS, Withholding tax, Pag-ibig contribution, and other loans. The current payroll system is done manually. It passes through different offices, namely, HRMO, Treasury and Accounting. HRMO is in charge of the attendance record of employees. They compute for the absences, tardiness, over time, and under time of each employee. The accounting office computes for the deduction of each employee and produces copies which are given to the treasury office. The treasury office handles the computation of salary and uses MS Excel to compute and stored data. The basic salary given to the regular employees depends on their position. For the regular employee, there is a corresponding rate per position. For the Employee with Job Order, the Mayor approves the submitted proposal of salary rate given to them. Salary is distributed every 15th and last day of the month. The working days counted for the computation of salary every 15th day start from the 26th day of the previous month until the 10th day of the current month. As one of the government offices, Noveleta Municipal Office should offer good service for their constituent. In order to provide this kind of service, a computerized system is needed.

3 1.2 Statement of the Research Problem Using the current Payroll System, Noveleta Municipal Office encounters problems such as attendance monitoring, data redundancy, complicated Interface, miscalculation of salary, maintenance, and security of files. Attendance monitoring. HRMO uses DTR for attendance to log in and out of work. Problem arises when employees ask their co-worker to log their name even if they are not yet really in the office. There is no way to know if employees really work that day and time. Data redundancy. The current payroll system is done manually, in effect; there is a need for more paper works. Printed copies of documents are sent to offices involved. Different offices hold copies of the documents, so that when the documents have to be updated, all the copies should also be updated. As a result, data redundancy is committed. Complicated interface. The Treasury Office uses MS Excel Application in their payroll system. It is where they input necessary data for the computation of the salary. The complicated interface of the application plus the large number of data to be inputted makes it hard for the person in charge to do the work faster. This particular problem results to slow payroll process. It takes the office 5 days to finish the computation. Miscalculations. The establishment has 210 employees, which means 210 salary computations. All of their salary has to be manually calculated first using the calculator, before inputting and saving the data to MS Excel. Calculating all the employees' salary is not easy. It takes a lot of time and effort. There are times when the person in charge of the computation gets confused with the numbers or inputs wrong amount, which leads to errors and inaccurate financial transactions.

Maintenance. The treasury office uses only one computer only for data storage. All computations are saved in that computer without other back up. The problem is, when the computer fails, there will be no other means to retrieve the files. Confidentiality and security. Since the Municipality is a public area, unauthorized persons can easily view important files from the computer and alter some data without others noticing it.

1.3 Statement of Objectives General Objective: The main objective of this study is to develop and implement Network-based Payroll System for Noveleta Municipal Office.

Specific Objectives 1. 2. To gather information and necessary materials needed to develop the system. To conduct interviews from the persons involved and observations from the company. 3. 4. 5. To determine the problems of the company regarding their current payroll system. To provide possible solutions for problems identified. To develop prototype of the system and gather feedback from prospective users about the proposed system. 6. 7. To help the municipality become updated to the modern world using the system. To apply the theories of DFD, ERD, Normalization and Networking in order to provide solutions and improve the current system.

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1.4 Significance of the Study The proposed system would be beneficial to the following: Municipality. The system would help the municipality in coping up with the rapid advancement and development of technology. It will impose good and high technology. Treasury Office. It would help the office in monitoring the salary records of all the employees. Through the use of this system, they can access records, compute salary, update records, and generate reports easily. It will also help them by saving time and effort. HRMO. It would lessen the work load of the HRMO. Manual computation of rendered hours is no longer required because data will be directly inputted into the system. Due to this, the office will lessen its expenses. Employees. This system would help employees in monitoring their salary records. Using the proposed Payroll System with Online Viewing, they do not have to worry with misplaced pay slip. They could easily view their record online. Proponents. The researchers will gain knowledge about the business system existing inside a municipal office, with this; skills in system analysis will be improved. Theories learned inside the classroom such as DFD, Normalization and Networking will be applied in real setting/ situation. Future researchers. They would be aware of the recent process in payroll system. Also, this study would serve as reference for other students and researchers.

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1.5 Scope and Limitations of the Study This study deals with the Payroll Processing. It covers up all the transactions for all types of employees. There will be access level that caters different types of user. Each access level has its own access rights. Instead of DTR, Biometrics would be used for recording attendance, through this; attendance can be monitored by the system. Employees would place their index finger on the scanner to record the time they start and finish work. The scanner would be connected to the system, to access the attendance record, which would be used for the computation of salary. The computation of salary would be included in the system. Accurate calculations would be done in order to come up with the correct amount of salary. Computations of salary includes Basic Pay and allowances (ADCOM, clothing allowance, cash gift, Hazard Pay, Laundry allowance, PERA, productivity allowance, RATA, subsistence). Generation of reports, maintenance, back-up and recovery would also be included. Reports given to accredited agencies such as Unlad Bank, GSIS, BIR, Philhealth and Pag-Ibig are incorporated in the system. The system that the proponents has to developed does include the hiring of the applicants. Though, data inputs for new employees will come from the HRMO. Application and computation for external loan are also not included in the system. The proposed system can not be accessed online, and salary distribution through ATM is not included.

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1.6 Methodology of the Study The system follows a series of step-by-step process in order to finish the system and attain its objectives. Techniques and tools were used in each step for the development of the system. The proponents used the V-Model as guideline to develop the system. The V-model is a software development model, which can be presumed to be the extension of the waterfall model. Instead of moving down in a linear way, the process steps are bent upwards after the coding phase, to form the typical V shape. The V-Model demonstrates the relationships between each phase of the development life cycle and its associated phase of testing. The V-model deploys a well-structured method in which each phase can be implemented by the detailed documentation of the previous phase. Testing activities like test designing start at the beginning of the project well before coding and therefore saves a huge amount of the project time. (http://en.wikipedia.org/wiki/V-Model_(software_development)). The phases of the VModel include:

Figure 1.1 V-Model

Requirements Analysis
Validate requirements

Operation & Maintenance

Systems Design

Acceptance Testing

Program Design

Verify Design

System Testing

Unit and Integration System Coding

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Requirement Analysis. This phase is concerned about understanding the situation of the company and identifying its problems that had been the cause for the proposal of a new system. In this phase, the proponents conducted interviews and observations from the company persons involved. In doing this, problems encountered using their present system were identified and possible solutions were proposed. System Design. In this phase, the proponents created a system design that would provide solutions to the problems encountered by the current system of the municipality. This includes the detailed description of what the system can do. It is also in this phase where proponents used DFD, ERD and Normalization in order to visual the flow of data and processes. Program Design. The proponents used VB.net to create a program that would access the database locally. Then ASP.net will be used by the employees to view their account online. SQL was used as the database. In attendance monitoring, biometrics using finger print scanner would be used. Coding. Next phase would be the program coding. The proponents determined what modules must be included in the system. One by one, the module was created showing specific purpose. Unit and Integration Testing. In this phase, the proponents made an independently working system module. They followed the concept that the program and data are intimately tied to each other. They tested each module on its own and see if the modules could work on its own. System Testing. In this phase, the proponents made sure that there were no conflicting modules and it ran as one system. They entered sample data and checked if every module worked as expected.

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Acceptance Testing. In this phase, the proponents will demonstrate to the company how the proposed system works. They will let them try the system and ask their comments and feedbacks. Operation and Maintenance. In this phase, the proposed system is implemented to the company. The system is in full operations. Transactions and maintenance module is in function.

CHAPTER 2 Related Literature

Computers nowadays are widely used in every transaction processes. Computerization make it easy for a company to do their internal and external transactions and it can be linked to other computers. Payroll system is one of the many transactions that are being worked on computer. The proponents worked on a custom-made payroll system done for the specific need of the company. The proponents searched on related literature that would aid in developing an effective payroll system as one of the research processes followed. The related literatures are as follow.

2.1 Local Literature AHNEX Builders Network Based Payroll System Dayrit, 2007 AHNEX Builder Network Based Payroll System was designed for the newly set-up AHNEX Builders. The company is currently using Microsoft Excel in computing net pay which is time consuming. This proposed system will help in the work of the users in an easier process. Visual basic 6, Microsoft Access, and Crystal Report 9 were used for designing and creating the system. This was designed to meet the requirements of the company for a better and more enhanced system. Keeping track of record of employees, computing the salary and wages of each employee and generating reports were included in the proposed system. This automatically computes the basic pay of each employee. Contributions like PAG-IBIG, Philhealth, withholding taxes were also included in computing the payroll. The main objective of the proposed system

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was to develop a system in a more accurate efficient and secured data. The proponents would like to help the management and accountant for well-organized and efficient payroll. The proponents found out that computerization of the payroll process of all payroll transactions in the company including the maintenance module is feasible. The related literature about AHNEX Builders payroll showed a common problem. They use Microsoft Excel in computing net pay that makes the computations time consuming. The proponents are to design a system that generates report, keeps track of files and information, and computes employees monthly salary. The proposed system includes the deductions of withholding tax and GSIS contributions/remittances.

JBC Engineering specialists Payroll System A. Reyes, 2000 JBC Engineering specialists Payroll System was created by the proponents in order for the company to have a better way in computing their payroll. The proponents were able to modernize their system by computerizing their manual tasks such as record keeping and computing their payroll. A database was added to the system so that the company would not have to rely on papers to store valuable information about an employee. The database system interfaces with an operating system to set-up, update and retrieve data items from a database organized as single logical and physical unit. This also helps them track of the progress of an employee. Another advantage of the new payroll system is in generating the payroll slips, which is printed out by the computer. The payroll slip contains all the information on how the computation arrives on the Net Pay amount an employee receives. The system also boasts of security maintenance so that only limited people is given access to the files. The proponents

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main objective in developing the system is to make the companys current manual system better and more efficient with the use of computer. The proponents created a computerized payroll system that will add a database into the system which is likely the same as with JBC Engineering specialists Payroll System. The system lessens the use of paper outputs and paper filings. The proponents created a database the can easily be selected, inserted, updated and deleted, so maintaining their system will be a breeze. They added a print friendly reports generated through the system like pay slip for example. Included in the system is the security module that gives access to the priority user of the system and that a certain user will have feature designated to him.

Network Based Payroll for Citimotors Las Pias L. Gawaran, 2007 The current payroll system of Citimotors Las Pias is prepared manually. Noticeably, it has an array of disadvantages. That is why a Network-Based payroll system for the Citimotors Las Pias was proposed to facilitate fast and easy preparation of its payroll. The proponents made sure that the system would be user friendly. It assures that its features and functions are simple hence, easy to understand. But it boasts of security maintenance that ensures limited and regulated accessibility. Furthermore, the proponents objective is to make the companys current system more efficient with the aid of the computer technology. The proponents developed a system that is a network based payroll system that will link/network 3 offices that handle the whole payroll processes namely the HRMO, Treasury Office, and the Accounting Office so that it will be easy for the 3 offices to transfer information and files. In comparison with the system done by J. Gawaran, the proposed system is a

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networkbased feature and its design is developed with a user-friendly interfaces and has all the features that meet the specific need of the company. Accessing the system will be easy to give an efficient help.

Dasmarias Municipality Payroll System L. Lardizabal , 2005 The Dasmarias Municipality Payroll System (DMPS) was designed to address the existing inefficiency and inaccuracy of its present system. There are problems encountered like loss of files and data, slow process of salary computation, difficulty in retrieving and maintaining of records, vulnerability of the data to be lost or misused, and overall security of the payroll process. The main objective of the DMPS was to provide the municipality with a more convenient and more reliable system of recording, storing, and retrieval of data needed to efficiently run the payroll of the employees correctly and accurately. The advantage of the system is to set up, update and retrieve data items from organized database. Another advantage of the new payroll system is generating the payroll report slips and other forms included in the system, which will be printed out by the computer. The system also boasts of security maintenance so that authorized people will only be given access to the files. The language used in making the system was Visual Basic 6.0. The proponents made sure that the system would be user-friendly, making the municipalitys current system better and more efficient with the use of the computer. The proponents study focuses on Noveleta Municipality payroll system. In comparison with Dasmarias Municipality Payroll system, the system created was from manual to computerized system. The proponents created a reliable, secured and convenient payroll system

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from a manual system for a government office need to have this kind of system so that they can give additional focus on more important activities to be transacted. The system created by Lardizabal shows common problems with the proposed system that are normally experienced from a manual system such as loss of files and data, slow process of salary computation and difficulty in retrieving and maintaining records, vulnerability of the data to be lost or misused, and overall security of the payroll process. Security is a main function because the information in the system should be kept in its confidentiality.

2.2 Foreign Literature

Biometric Time Management & Payroll Software http://www.timetrax.com.pk/#, 2007 TimeTrax is a comprehensive, integrated yet easy to use employee's Time Management SoftwareSuite that enables employees to record their arrival and departure providing managers with detailed information about attendance records, absenteeism, overtime etc. Each individual's arrival and departure time is recorded automatically via input devices such as Card Readers, Biometric devices or keyboard, depending upon environment and working practices. Following are some of the advanced features that TimeTrax has to offer: Hand geometry, Fingerprint, RFID and Magnetic swipe card devices integration. Centralized payroll processing is for multiple branches. Track employee attendance from any location, anytime, even from the convenience of your home. Overtime, late arrivals & early departure reports, automatic calculation of hours, leaves, taxes and deductions to generate payroll, shift scheduling & rule based penalties are the features included.

15 Just like Biometrics Time Management and Payroll system, the proponents developed a system with a biometrics time management. The employee will time in on a finger print scanner as their Bundy clock and their time will be recorded. The use of DTR is not applicable anymore. In the system, the computation of absences and tardiness will be computerized. Because the daily time management is already computerized the transferring of data is easy to access and compute which provesits feasibility from the Biometric Time Management & Payroll Software.

Spine Payroll (ver9.4.0) Payroll Management Software http://www.spinetechnologies.com/products/payrollindex.htm, 2004 Spine Payroll is very simple, flexible and user-friendly Payroll Management software especially for INDIA that takes care of all the requirements relating to accounting and management of employees payroll. Spine Payroll stores complete records of the employees, generates Pay-slips and Attendance Register, computes all allowances and deductions and generates all Statutory and MIS reports. Spine Payroll is only salary processing software with good no and wide-industry range of client based in Mumbai, INDIA. It offers very high flexibility in defining various allowances, deductions, leave rules etc. for the employees and all formula for P.F, PF TRUST., F.P.F., E.S.I.C., Profession Tax, Income Tax, etc. are definable and changeable at User's end. The proponents had an idea in the computerization of the payroll. After analyzing Spine Payroll, they considered adding complete records of the employees, generating Pay-slips and Attendance Register, computing all allowances and deductions, and generating all reports.

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Sure Payroll http://www.surepayroll.com/default.asp, 2000 SurePayroll is the best way to eliminate payroll worries. Do you have between 1 and 100 employees? Let us prove our passion for payroll to you! Add your payroll to the more than 30,000 we process each month. Payroll systems have changed for the better. With online payroll systems, like SurePayroll, you can log on to our payroll system anytime, anywhere and you'll be done with payroll in minutes. If you'd prefer to focus on growing your small business rather than on the tedious tasks of payroll, consider outsourcing payroll to SurePayroll's online service. As the nation's leading supplier of online payroll services, we can help you save time, save money and stay in control of your payroll. Simple, Convenient, Smart. SurePayroll is the national leader in online payroll processing. We focus exclusively on small business payroll solutions, and we provide a SIMPLE, CONVENIENT and SMART way to process payroll and file taxes. This system has a commonality with the proponents proposed system in storing employees record and ways in processing payroll and deductions. The system also generates Pay slip and attendance Register. The proponents focused on simple and convenient process of computing deduction such as taxes and more.

Agile Payroll Systems http://www.agilepayroll.com/products.html, 2007 We are building the finest payroll system using state-of-the-art, proven Microsoft technologies. The Agile Payroll System will change your business, helping you to provide the highest level of customer service. Let's face it; there are more than a few payroll systems in the market already. But few were built to address your business needs for scale, efficiency and

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reliability. We are building our products using the agile software development process that puts both clients and testing, front and center in the development process. Our system design and development are client and test driven to ensure that the resulting applications are flexible, meet our clients' requirements and are of the highest quality. Here are some of the advantages we offer: An interface designed by users, efficiency in design that allows you to be more effective in your business, developed in, and for Microsoft's latest .Net technologies, reliable, scalable and secure Microsoft SQL database systems, the highest level of quality based on multi-level testing, a team with years of payroll operations, support and development experience and we work with you, as partners to help you succeed. Agile Payroll Systems has similarity with the proposed system in terms of its features. The proponents created a network based payroll system with an effective design for business that is developed in Microsoft .Net application of Microsoft SQL database will address efficiency and reliability. This will be convenient for employee to view their salary particulars including from gross pay, net pay and deductions.

These related literature reviewed by the proponents helped greatly in the long development of the system. These just proved that the feasibility of the computerized and network based payroll system is true.

CHAPTER 3 Theoretical Framework

3.1 Statement of Assumptions The documents and all the information given to us will reflect the payroll data needs of the municipality and the problems in their data capture mechanisms. The detailed computations, regardless of the municipalitys confidentiality issues are assumed to be correct. The development of the system will be supported by the municipality of Noveleta. The salary of employees is the same according to their rank and position. There are no employees hired from agencies. The employees usually have no overtime.

3.2 Operational Definitions 3.2.1 Definition of terms ADCOM (Additional Compensation) it is also included in the pay slip. Allowance Additional money given to an employee to compensate the cost of their necessities. Basic Pay Monthly rate divided by the number of working days multiplied by the number of days worked. Cash Gift An incentive given to an employee during the last week of November or first week of December.

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Clothing Allowance Given every first month of the year to compensate clothing cost.

Cut off period - The span of working days where an employee is paid. DTR Stands for Daily Time Record, a document where the employees daily time in and time out is recorded.

DTR File A file that holds the DTR of each employee for the computation of tardiness and absences

EJO (Employees with Job Order)The employees who do not have benefits; they are usually non office workers (except for some clerks). Examples of job order employee are traffic enforcer, driver, clerk and utility worker.

Employee An elected official or a person hired by the municipality to render his/ her professional services.

Employee File - File about employee information, it also shows their monthly salary as defined by the plantilla and Mayor for regular and EJO respectively.

General Payroll File file of all payroll computations of all employee. GPR (General Payroll Report) This summarizes all the details of every employees salary computation

GSIS deduction File - indicates the percentage of deduction to the employees salary as defined by the said insurance company.

Hazard Pay Given every 2nd half of the month and included in the pay slip. It is an additional payment given to employees who are working hazardously in the environments. Health workers are the major consumers of this benefit because of the risk that they take when they are working in the community.

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Laundry Allowance Mandated by the Department of Health to be given to health workers. It is intended to compensate the cost of disinfecting the clothes of health workers.

Leave points It is the amount of leave that an employee can consume without causing salary deduction. Each employee earns 1.25 points a month

Loan File Stores all the loan information from lending companies and insurance companies.

MHO (Municipal Health Office) The MHO is under the supervision of the Department of Health. Due to this, its budget and signatories are different from departments that are solely handled by the municipal office.

Monthly Salary Employees rate of payment stated in the plantilla. MSWD Municipal Social Welfare and Development This department have separate general payroll report because it has a separate budget and different signatory.

Pag-Ibig Deduction Table Indicates PAG-IBIGs percentage of deduction to the employees salary.

Pay slip A detailed breakdown on how much an employee is paid during a specific period.

Payroll It is a detailed computation of salarys financial record. It includes bonuses and deductions made to every employees salary.

PEF (Performance Evaluation Form) It is a form sent by the HRMO to every department. Its purpose is to evaluate the performance of employees in every department. Department heads evaluate their employee once in every half of the

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year. Two PEF with a minimum of very satisfactory rating entitles them for a Productivity Allowance. PERA (Personnel Economic Relief Allowance) This allowance requires that the employee is at least one year in office. It is given together with the first half of the monthly salary. PhilHealth Deduction table Indicates the amount to be deducted to the employees salary as defined by the said insurance company. Plantilla It is a document which states the names of the employees occupying a position in the office and the rate by which the employee is paid. When the position has no employee name, it is understood that the position is vacant. Productivity Allowance Productivity allowances are incentives given to employees every February. It is only granted to employees who get two performance evaluation forms with a minimum of satisfactory rating. It is intended to encourage employees to work hard. RATA (Representation and Traveling Allowance)It is included in the pay slip and given to department heads and elected officials every first half of the month to compensate necessities in representing their office. These necessities include clothing and the cost of transportation. For non-Department Head, RATA is only given when a request and travel order is approved by the mayor. Regular Employee Regular employees are those who are included in the plantilla. Regular Employee includes the elected officials, department heads and executives.

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Remittance The amount given to external entities such as BIR and other insurance companies. It includes a paper that documents the amount of money given.

Subsistence pay Additional pay given to employees to compensate their expenses.

Tax table Shows the deduction to be deducted from the monthly salary as defined by the BIR

3.2.2 Definition of Processes Update employee information The employee information coming from the HRMO in the form of papers is in stored. file. Generate Certificate of Tardiness/Absences The HRMO generates a certificate of tardiness and absences from DTR of employee Compute Gross pay Computes the gross pay of the employees by multiplying the number of days worked and monthly salary. Calculate deduction Gets the deduction of the employees by summing loans, taxes and contribution to insurance companies. Calculate net pay Subtracts all the deduction to the gross pay. Generate Report Generates a detailed report which summarizes the gross amount of salary, deductions and contributions to insurance companies. Record Daily time Records the daily time of employees into the DTR

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3.3 Theories used in the study 3.3.1 Automation Automation is the utilization of computing machines or computers to automatically compute data that are fed to it by programming those machines. Automation of systems nowadays is dramatically increasing because of the need for speed and reliable information system wherein the desired information can be obtained without tumbling out files in large data cabinets and archives. This theory waas used in the proposed Payroll system of Noveletas municipal office. Data inputs in the form of hours and days worked and corresponding deductions such as tax and individual insurance shares will be introduced to the computers. As an output, the machine will print pay slips and reports that are ready to be delivered to external entities outside the system. By using this theory, less work will be done by the accounting department because the reports for the computation of deduction will now be internal to the computerized payroll system. This technique will greatly increase the speed of calculating each employees salary with utmost minimal human intervention. Minimizing human intervention will most likely reduce the instances of errors in the computation of salary.

3.3.2 Biometrics Biometrics comes from the word bios which means life and metron which means to measure (http://en.wikipedia.org/wiki/Biometrics, 2008). At first the proponents were confused with the term because it typically implies the measure of life. It may be the population density of biological elements within an ecosystem or it may imply the biodiversity of our planet.

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Nowadays, the meaning of biometrics evolved with the technology. Biometrics today refers to gadgets that are used to identify humans physiologically. The most popular biometric gadgets are fingerprint and iris scanners because the fingerprint and iris are unique for all human beings that even identical twins do not have the same fingerprint or iris structures. Through this theory, the proponents can use biometric gadgets to identify the employees in the municipal office, and doing such things will ensure that no employee will be able to cheat. For example, an employee can mark a time in to other employee who comes late. When the system has a biometric strategy of identification, no employees can time themselves in without their physiological identity being verified. The system will be using fingerprint scanner, a biometric gadget that scans fingerprint. Employees are going to time themselves in or out by scanning their index finger into the fingerprint scanner. 3.3.3 Data Flow Diagram Data flow diagrams are used to graphically depict flow of data within an organization. It is very useful because it allows the analyst to visualize the flow of data and track the very details of the problems being solved. Having a data flow diagram will prevent the analyst from committing to the technical implementation of his proposed system at an early stage. The system analyst will free himself from thinking too much because all of his efforts will be focused on understanding the flow of information within the organization that he/she is analyzing. It will also help the system analyst to further understand the relation of the studied system to its subsystem and other external systems. During the analysis of a proposed system, it will also help to determine whether the necessary data and processes have been defined, thus allowing a systematic approach in the analysis of the problem (Kendall, 2004).

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The proponents used data flow diagram to fully understand the flow of data which would give them a birds eye view of the problem. All the information that the proponents had gathered through interviews were compiled to help determine the necessary business activities within the existing payroll system. When all the business activities had been identified, the proponents started drawing the data flow diagram. With this, they were able to see where the data would go and planned necessary automations and made simplification. 3.3.4 Database Databases are electronic files saved in the hard disk of computers which holds tables that are logically associated with each other. These databases are used to store valuable information that can be accessed or queried by multiple software applications that are used by an organization. Through the use of database, some issues of confidentiality and data security can be solved. It can also take part in minimizing data redundancy and maximizing data integrity. Departments within an organization can share the same information and can manipulate that information according to their access rights. The proposed system used this theory to eliminate data redundancy within the organization. All the information about an employee will be saved in a database. Their log in and log out time will also be saved on it making it available to programs that need to access those data. 3.3.5 Normalization Normalization is the process of designing relational database wherein complex database tables are divided into a set of simpler tables to eliminate anomalies. Eliminating anomalies will also protect the database from errors that may result in inaccurate queries and data loss, thus strengthening the integrity of data. In addition to strengthening data integrity, normalized databases are more stable and easily maintained than the complement.

26

The proposed system used this theory to create a structured data storage method. All the information requirements of the system are collected first. Second, the gathered requirements or fields are converted to its first normal form. Repeating groups are removed by separating it as another table. In the second normal form, all the attributes are functionally dependent on the primary key. All other partially dependent attributes are separated from the original table. Next to it is to convert it to the third normal form. A normalized relation is in its third normal form when all of the non-key attributes are fully functionally dependent on the primary key and there are no transitive dependencies (Kendall, 2004). 3.3.6 ERD An Entity-relationship diagram is a relational schema database modeling method used to model a system and its requirements in a top-down approach. This approach is commonly used in relational database design. Entities in an Entity-relationship diagram are discrete objects. Examples of these are person, place or things which you need to collect data or attributes. Relationship tells how two or more objects are related to one another. They can be thought of as verbs that links two or more nouns. (http://en.wikipedia.org/wiki/Entity-relationship_model, 2008). The proponents used the theory to identify the entities and the kind of relationship that occur between these entities. Doing this systematic approach gave a solid foundation of the information requirements of the municipal office. An ERD is easy to transform to a database table and only uses minimal normalization procedures.

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3.3.7 Network A network is the interconnection of two or more computers. It is an interconnection of usually passive electronic components that perform a specific function to simulate a transmission line or to perform a mathematical function such as integration or differentiation. (http://en.wikipedia.org/wiki/Computer_network, 2008) In information technology, a network is a series of points or nodes interconnected by communication paths. Networks can interconnect with other networks and contain sub networks. The proponents used the theory of network to let computers within the municipal office communicate with each other and, therefore, minimize the use of printed reports that is only internal to the organization.

CHAPTER 4 The Existing System

4.1 Description of the System The Municipal Office of Noveleta is currently using a manual system on their payroll. Manual computations used in calculating are calculator and MS Excel. They also use MS Excel for storing their database/master list. The Treasury Office (TO), Accounting Office (AO) and Human Resource Management Office (HRMO) are the three offices that handle the payroll process. Employees record on the Bundy Clock using their DTR. During cut-off period every 10 and 25 of each month, the HRMO computes the tardiness and absences of each employee and then makes a certificate of absences and late and pass it to the TO. The Treasury is in charge of all payroll computations. The office computes the gross pay from the basic pay of each employee and the number of late and absences whatever type of employee he is ( Regular or Employee with Job Order). The deductions of Withholding Tax, GSIS, Phil Health, Insurances and the like are sent to Accounting Office by the agencies handling these deductions: BIR, GSIS, PAG-IBIG, PHILHEALTH, and other Lending Companies like UNLAD Bank, and MPS Lending Company. The salary of the employees is based on the Plantilla that comes from the CSC and DBM which state the monthly salary and position to be given to the regular employee and to the EJO which is based on the mayors specification. The TO generates pay slip and gives it to the employee.

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27

4.2 Definition of Data Capture 4.2.1 CS Form 212(Revised 2005) Employee Information Data Entry Surname First Name Middle Name Date of Birth Sex Civil Status Citizenship Field name Lname Fname Mname Bdate Sex Cstatus Citizen Field Type text text text date/time text text text text text text text text

Residential Address Radd GSIS ID no. PAG-IBIG ID no. PHILHEALTH no. TIN Gid Pid Philno Tin

4.2.2 Daily Time Record Data Entry Pay Ending Name Position Age Department Field name Pend Ename Pos Age Dept Field Type date/time text text number text

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27

Time in Time out

Timein Timeout

date/time date/time

4.2.3 CSC Form no. 6 Data Entry Office/Agency Last Name First Name Middle Name Date of Filing Position Number of working Days Type of leave Dwork Ltype number text Field name Office Lname Fname Mname Dfiling Pos Field Type text text text text date/time text

4.2.4 Pay Slip Data Entry Name Pol No. Month Salary Field name Empname Polno Msalary Field Type text text number

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27

4.2.5 Certificate of absences and tardiness Data Entry Last name First name Middle name No. Of late No. Of Absences Field name Lname Fname Mname late Absences Field Type Text Text Text number number

4.2.6 General Payroll Data Entry Number Name Position Monthly Salary Gross Salary Adcom Net pay Field name Num Name Pos Msal Gsal Adcom Net Field Type text text text number number number number

4.3 Inputs Name of Reports: Number of Copies: Frequency of Distribution: Purpose: DTR 1 daily Absences and Tardiness

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Name of Reports: Number of Copies: Frequency of Distribution: Purpose:

PEF 2 every December and June Employees Performance

Name of Reports: Number of Copies: Frequency of Distribution: Purpose:

Personal Data Sheet 1 Hiring for Employment

Name of Reports: Number of Copies: Frequency of Distribution: Purpose:

Certificate of Tardiness and Absences 1 Cut off period computation of no. Of late and absences

4.4 Processes 4.4.1 Update_employee_information Begin If June or December then HRMO give PEF End if Store employee info to Employee File End

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4.4.2 Record_daily_time Begin Employee DTR record time Store DTR to DTR file End 4.4.3 Generate_Cerificate_of_Tardiness/Absences Begin Compute Tardiness and Absences Generate Certificate of Tardiness and Absences End 4.4.4 Compute_gross_pay Begin If cut off period then Give certificate of Tardiness and Absences from DTR file Get total no. of tardiness and absences Check for available leave points If leave points is available then Deduct tardiness and absences to equivalent leave points End if Calculate gross pay from monthly salary and total no. of tardiness & absences End if End

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4.4.5 Calculate_deduction Begin Get gross pay Get tax contribution Compute withholding tax from gross pay Get PAG-IBIG contribution Compute PAG-IBIG deduction from gross pay Get PhilHealth contribution Compute PhilHealth deduction from gross pay Get GSIS contribution Compute GSIS deduction from gross pay Get loan contribution Compute loan deduction Compute total deduction End

4.4.6 Calculate_netpay Begin Get gross pay Get total deductions Calculate net pay End

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4.4.7 Generate _report Begin If pay period then Print pay slip End if Print BIR remittance Print GSIS remittance Print Pag-Ibig remittance Print Philhealth remittance Print Loan remitance End

4.5 Files Name of File: Employee File Data Needed: Employee Id no. Last name First name Middle Initial Monthly Salary Tardiness and Absences Net Pay Loan Balance GSIS contribution

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Withholding tax Dependents Pag-ibig contribution GSIS ID no. PAG-IBIG ID no. PHILHEALTH no. TIN

Name of File: DTR File Data Needed: Employee Id no. Employee name Cut off period Time in Time out Absences Tardiness

Name of File: General Payroll File Data Needed: Employee name Employee ID Position Monthly Salary Number of days absent

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Number of days late Gross salary Adcom Net pay Deductions Name of File: Tax table Data Needed: Employee id no. Employee name Civil Status Dependents Exemption Withholding tax Percentage

Name of File: Pag-Ibig Deduction Table Data Needed: Employee Id Employee name Contribution

Name of File: PhilHealth Deduction table Data Needed: Employee Id Employee name Contribution

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Name of File: GSIS deduction File Data Needed: Employee Id Position Range Contribution

Name of File: Loan File Data Needed: Employee name Loan amount Loan history Loan Balance

Name of File: Tax Table Data Needed: Status Range Base Tax Bracket Percent Over

4.6 Outputs Name of Report: Prepared By: Number of Copies: Pay Slip Treasury Office 2

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Frequency of distribution: Purpose: Source Document:

Pay Period Pay Period DTR, Total Deduction, General Payroll

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose: Source Document:

General Payroll Treasury Office 2 Pay Period Pay Period DTR, Total deduction

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose: Source Document:

Electronic BIR Remittance Accounting Office 3 Cut off period Deduction Remittance Tax deduction

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose:

RF-1 Accounting Office 3 Cut off period Deduction Remittance

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Source Document:

PhilHealth deduction

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose: Source Document:

Loan Remittance Accounting Office 3 Cut off period Deduction Remittance Loan deduction

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose: Source Document:

GSIS Remittance Accounting Office 3 Cut off period Deduction Remittance Loan deduction

Name of Report: Prepared By: Number of Copies: Frequency of distribution: Purpose: Source Document:

Pag-ibig Remittance Accounting Office 3 Cut off period Deduction Remittance Pag-ibig deduction

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4.7 Problem Areas In using their current Payroll System, Noveleta Municipal Office encounters problems such as problems with attendance monitoring, data redundancy, complicated interface, error in calculations, file retrieval and back-up, and unsecured files. First, they encounter problem in attendance monitoring. They use DTR for attendance to log in and out of work. This is a problem because employees can just ask their co-worker to log their name even if they are not yet really in the office. There is no way to know if employees really work on time. Next is the data redundancy. The current payroll system of the municipality is done manually. Due to this manual system, there are more paper works. Printed copies of documents are sent to departments involved. Different departments hold copies of the documents so that when the documents have to be updated, all the copies should also be updated. As a result, data redundancy is committed. The Treasury Department uses MS Excel Application in their payroll system. It is where they input necessary data for the computation of the salary. The complicated interface of the application plus the large number of data to be inputted makes it hard for the person in charge to do the work faster. This particular problem results to slow payroll process. It takes the department 5 days to finish the computation. Another problem is the error in calculations. This establishment has around 200 employees, which means around 200 salary computations. All of their salary has to be manually calculated using the calculator, before inputting and saving the data to MS Excel. Calculating all the employees' salary is not easy. It takes a lot of time and effort. There are times when the

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person in charge of the computation gets confused with the numbers or inputs of wrong amount, which leads to errors and inaccurate financial transactions. Retrieval and back up of file is another problem. The treasury department uses only one computer only for data storage. All computations are saved in that computer without other back up. The problem is, when the computer fails, there will be no other means to retrieve the files. Another thing is that there is no CD driver installed and the floppy disk is not working. They are not able to get a softcopy of the data. Lastly is confidentiality and security of data. Since the Municipality is a public area, unauthorized persons can easily view important files from the computer and alter some data without others noticing it.

CHAPTER 5 The Proposed System

5.1 System Overview The proposed Network-based payroll system for Noveleta Municipal Office is the solution to the problems encountered using their current manual process. It provides accurate and efficient computation of employees salary. The computation which includes deductions is error free and takes less time to accomplish. Attendance recording and monitoring is included in the system which makes getting the total number of hours worked fast and easy. Files can be easily manipulated and organized. Important files are secured and can be accessed only by authorized persons. The departments that will be given access to the system are the Treasury Office and Human Resource Management Office. The treasury office is in-charge of the salary computation and maintenance modules. The HRMO will be responsible for the Daily Time Record, Leave, and Absences Modules. Files are protected using passwords, so that only authorized users may be able to access the file. The payroll process starts by getting the hours worked by the employees within the cutoff period, which is done by the Treasury Office. A biometrics system is used to record the hours worked, instead of the usual DTR. Employees have to scan their finger print on the scanner to record the time they start and finish working. The attendance record is updated every time an employee logs-in and out of work. After getting the hours worked, the system automatically computes salary for the given pay period. The salary of the regular employees is based on the plantilla while the salary of the

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employees with job order is based on the mayors specification. If approved, absences of regular employees are deducted from the leave points, which is 1.25 days per month. The computation of salary also includes deductions such as GSIS, Pag-ibig, Withholding tax and loans. Regular employees receive PERA, 13month pay, ADCOM, clothing allowance and productivity allowance. Added benefits such as the RATA, Travel Allowance and Cash Gift are given only to the office heads. The system generates necessary reports such as pay slip, remittance report and general payroll. The pay slips are produced by the system and are given to employees, for them to know the amount deducted from their salary and the total amount of salary they will get. Remittance report is given to the Accredited Agencies such as GSIS, BIR, Pag-ibig and Philhealth. General payroll contains payroll information such as the name, position and address of employees who receive payroll and the amount of salary they receive for each pay period. It is printed and given to the accounting office for record keeping. A module for File maintenance is included. It will ease updating and sorting of records. Transactions for maintenance such as adding, deleting or editing records are easily done, by just clicking the labeled button for the desired function. Back-up and recovery of files are also provided so that copies of files may be reproduced when needed or be restored when accidentally deleted. The proposed system is network-based; it allows sharing of information among different users of the system. Through this, users save time and effort in performing tasks. When gathering data, instead of personally going from one department to another, the users may just access data they need via the computer/ system.

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5.2 System Objectives The proposed Network-based Payroll System for Noveleta Municipal Office has the following objectives:

1. To computerize the municipals manual payroll system in a network-based environment. 2. To offer a biometric system using finger print scanner for the Time Management System of the municipal. 3. To provide modules such as salary computation, attendance information and maintenance module. 4. To ensure an accurate computation of employees salary. 5. To provide a user-friendly and easy access system. 6. To provide security through the use of passwords and access level . 7. To provide backup and recovery. 8. To generate necessary reports.

5.3 Scope The proposed system focuses on the payroll of Noveleta Municipal Office. It covers all the transactions for all types of employees. It has modules for Salary Computation, Daily Attendance Record, Leave and Absences, Benefits and Allowances, Log-in Log-out, and Maintenance. Instead of DTR, Biometrics is used for record attendance. Through this, attendance can be monitored by the system. The scanner is connected to the system, to access the attendance record which would be used for the computation of salary.

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The computation of salary is included in the system. The system automatically computes for the salary for a given pay period. The computation includes deduction from GSIS, Pag-ibig, Philhealth, loan and withholding tax. Accurate calculations are done in order to come up with the correct amount of salary. Computation for the Benefit and Allowance is also included in the payroll. Regular employees receive PERA, 13month pay, ADCOM, clothing allowance and productivity allowance. Added benefits such as the RATA, Travel Allowance and Cash Gift are given only to the office heads. These benefits and allowances are given to regular employees in certain time of year. File maintenance is included in the system. Adding, deleting, and editing of records are easily done using the system. Back up and recovery is also provided. The system also produces pay slips, General Payroll and Remittance Report. The pay slips are produced by the system and are given to employees. Remittance report is given to the Accredited Agencies such as GSIS, BIR, Pag-ibig and Philhealth. General payroll contains payroll information such as the name, position and address of employees who receive payroll and the amount of salary they receive for each pay period. It is printed and given to the accounting office for record keeping. For security, the system includes level of access and passwords so that authorized users are only given permission to access the system. The system is network-based which allows sharing of information in less time.

47 7 5.4 System Justification The proposed payroll system is needed to solve the problems encountered by the current payroll process of the municipal. Features and benefits are offered to improve their manual system. Firstly, it provides accurate computation. The system automatically computes the salary of employees in every pay period. The formula for salary and for other inputs is acquired and already programmed in the system, which lessens human errors. The system is also user-friendly. It is designed with buttons and labels so that functions are easy to know and understand. Attendance monitoring is easy. A finger print scanner is provided to record the attendance of employees. HRMO will not be having trouble manually computing the attendance. The hardware is already connected to the system which updates the attendance. The scanner verifies the finger print and saves it to the database. The use of finger print scanner can also prevent employees from cheating their daily attendance records. When using the DTR, employees can ask their co-employee to log in their time card when they cant get to work on time. This will now be avoided using the finger print scanner. Records can easily be updated. File maintenance is included so that record can be added, edited and deleted in less time. Through backup and recovery, files can be copied or restored. The system includes provided passwords and access level. For security, only authorized users are given permission to access the system. This makes files and other important documents protected. Lastly, payroll process takes less time using the proposed system. It is network-based, which allows sharing of information in less time. Users are more productive; they lose no time in performing tasks. Data they need could be acquired through the system, which means they do not

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need to get inputs or information personally from another office. They access information through the system.

CHAPTER 6 System Design

6.1

Inputs Name of Document: Origin: No. of Copies: Purpose: Employee Information HRMO 1 for the information that will be used for the payroll system

Name of Document: Origin: No. of Copies: Purpose:

Time in / Time out Employee 1 For recording time in and out of the Employee

Name of Document: Origin: No. of Copies: Purpose:

Allowance Amount ALLOWANCEGRANTS Table 1 For additional compensation on the payroll computation

Name of Document: Origin: No. of Copies: Purpose:

Loan Monthly Amortization LOAN Table 1 For deduction computation

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Name of Document: Origin: No. of Copies: Purpose:

Base Tax and Percent Over TAX Table 1 For deduction computation

Name of Document: Origin: No. of Copies: Purpose:

GSIS share Percent GSIS Table 1 For deduction computation

Name of Document: Origin: No. of Copies: Purpose:

PAG-IBIG Amount PAGIBIG Table 1 For deduction computation

Name of Document: Origin: No. of Copies: Purpose:

PHILHEALTH Contribution PHILHEALTH Table 1 For deduction computation

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Name of Document: Origin: No. of Copies: Purpose:

Leave Inclusive Dates LEAVE Table 1 For computation of total hours worked

Name of Document: Origin: No. of Copies: Purpose:

Rendered Hours DTR Table 1 For computation of total hours worked

Name of Document: Origin: No. of Copies: Purpose:

Monthly Rate EMPLOYEE Table 1 For payroll computation

Name of Document: Origin: No. of Copies: Purpose:

No. of dependent DEPENDENT Table 1 For Deduction

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6.2 6.2.1

Processes Update Employee Information Begin If New employee Add information to Employee File Else Edit information Save Employee Information End

6.2.2

Record DTR Begin If status is out Record Time in Else if status is in Record Time out End if End

6.2.3

Get Absent Begin If Employee not in DTR now Note as Absent

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Else If Employee Rendered Hours is less than 4 Note Half Day End If End If End

6.2.4

Compute Total Hours Worked Begin Compute Absences If Leave is applied Compute no. of leaves End If If Leaves point is available Get hours added from the Leave points End IF Compute Total Hours worked as rendered hours plus hours added End

6.2.5

Compute Basic Salary Begin Get Monthly Rate, Allowance Grants Amount and Total Hours Worked Compute Basic Salary

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End

6.2.6

Compute Total Deduction Begin Get Basic Salary Loan Monthly Amortization Get No. of Employee Dependent, Base Tax, Tax Percent Over Compute Withholding Tax Get PHILHEALTH Contribution Compute PHILHEALTH Deduction Get GSIS percent Compute GSIS Contribution Get PAGIBIG amount Get LOAN Monthly Amortization Compute Loan Deduction Compute Total Deduction End

6.2.7

Compute Net Pay Begin Get Allowance Grants Amount, Compute Net Pay End

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6.2.8

Generate Report Begin Generate Remittance, Pay slip, Payroll End

6.3

Files Filename: EMPLOYEE BIGINT VARCHAR VARCHAR VARCHAR DATETIME VARCHAR VARCHAR VARCHAR CHAR CHAR VARCHAR MONEY VARCHAR

Data needed: Employee ID Last Name First Name Middle Name Date of Birth Sex Civil status Address Phone Cell phone No Position Monthly Rate Employee type

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46

Filename:

EJO VARCHAR DATETIME VARCHAR

Data needed: Place Date CTC No.

Filename:

REGULAR VARCHAR VARCHAR VARCHAR VARCHAR VARCHAR FLOAT

Data needed: PAGIBIG no. ID NO. TIN GSIS No. PHILHEALTH No. Leave Points

Filename:

DTR BIGINT DATETIME DATETIME DATETIME VARCHAR FLOAT

Data needed: DTRID Time In Time Out Date Status Rendered hours

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Filename:

ALLOWANCE GRANTS VARCHAR MONEY VARCHAR

Data needed: Description Amount Allowance Type

Filename:

LEAVE BIGINT DATETIME VARCHAR DATETIME DATETIME

Data needed: Leave ID Date of Filing Type Date TO Date From

Filename:

PHILHEALTH INT MONEY MONEY MONEY

Data needed: Bracket Range from Range to Contribution

Filename:

TAX VARCHAR INT

Data needed: Status Bracket

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Basic Tax Range Percent over Filename: DEDUCTIONS

SMALLMONEY MONEY FLOAT

Data needed: Deduction ID Total Deduction

BIGINT MONEY

Filename:

LOAN BIGINT VARCHAR MONEY INT NCHAR

Data needed: Loan ID Description Principal Term Interest Rate

Monthlyamortization MONEY Balance Start Date MONEY DATETIME

Filename:

WAGE MONEY

Data needed: Net

Filename:

PAYPERIOD BIGINT MONEY

Data needed: Pay ID Basic Salary

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Total Hours Worked FLOAT ADCOM MONEY

Allowance Description VARCHAR Allowance Amount Date From Date To MONEY DATETIME DATETIME

6.4

Outputs 6.4.1 Name of Report: Prepared By: No. of Copies: Purpose: Frequency: Recipient: Updated Employee Information HRMO 1 show detail information of the employee once HRMO

6.4.3

Name of Report: Prepared By: No. of Copies: Purpose: Frequency: Recipient:

Pay Slip Treasury 1 show the payroll details every 15th day employee

6.4.4

Name of Report:

Remittances

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Prepared By: No. of Copies: Purpose: Frequency: Recipient:

Treasury 1 show the total remittances to external entity every 15th day employee

6.4.5

Name of Report: Prepared By: No. of Copies: Purpose: Frequency: Recipient:

Login Username HRMO 1

to be able to manually login to the system according to access level when needed employee

CHAPTER 7 Implementation

7.1

Resource Requirement Resource Requirements are things that must be provided in order to successfully

implement the system. These requirements are Software, Hardware and Human Resources. Software requirements are programs and applications that the computers should have in order to install the system. Hardware requirements are materials necessary to be able to use the system. Lastly, human resources are the persons who will use the system. These requirements are all needed when implementing the system, so it will work properly.

7.1.1

Software Requirements Operating System: Application: Microsoft XP or higher version

Microsoft SQL, Microsoft Visual Studio 2005, Crystal report

7.1.2

Hardware Requirements Finger Print Scanner Pentium 4 or higher CD Rom Keyboard Mouse

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Printer Monitor AVR LAN Connection Router

7.1.3

Human Resources Human Resources are the persons who will be using the proposed system. There will be 2

users, the direct and indirect users. Direct users are the persons who will operate and maintain the system. These direct users are the HRMO and Treasury Office. Indirect users are the beneficiary of the system. They are the regular and EJO employees working at Noveleta Municipal Office.

7.1.3.1 Direct User HRMO will operate the employee update information and the attendance information. Treasury will take charge of the payroll computation modules.

7.1.3.2 Indirect User Regular and EJO Employees working in the municipality

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7.2

Installation Plans

7.2.1

System Installation The proposed system should be installed as the training is being conducted. This aids the

direct users to understand the flow of the system and to properly use each transaction they will encounter. In the installation process, the proponents would provide all necessary information regarding the proposed system such as troubleshooting procedure, maintenance, reinstallation process, and other requirements. The system will be installed in two computers located at the Treasury Office (first floor) and HRMO Office (second floor). The finger print scanner will be placed near the main entrance of the municipal office so that employees may log in as they enter the building before going to their respective offices.

7.2.2

Training Plans The proponents will conduct training for the direct users to familiarize them with the

proposed system. They will be taught enough information regarding the system. Activities for the training plans are Preparation for training, Installation of the system, Demonstration on how the system works, and the Training proper. There will be scheduled dates for these activities. Direct and indirect users will be taught on the proper usage and maintenance of the finger print scanner.

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Activity Preparation for training Installation of the system Demonstration on how the system woks Training proper

Materials Computers Installation CD Software Application Software Application

Date Oct 13, 2008 Oct 14, 2008 Oct 15-17, 2008 Oct 20-24, 2008

User HRMO/Treasury HRMO/Treasury

Person/s in charge Mr. Cruz Ms. Atog Ms. Marce Ms. Atog

HRMO/Treasury Ms. Marce HRMO/Treasury Mr. Cruz

Figure 1.1. Training Plans

7.2.3

Conversion Plans The proponents will use the parallel conversion in replacing the proposed system from

the manual system. The following are the reasons why the proponents chose this type of conversion: With parallel conversion, users will slowly become accustomed to the new system. It will help them get familiar and adjust to their new working environment. They will be able to learn the flow of processes of the payroll little by little. Another reason is that users will be able to compare and evaluate results obtained from both systems. They can compare if the new system is more helpful and convenient to use than the older version. They can check if the new system really lessens their workload, giving them time to accomplish other tasks

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7.2.4

Testing The efficiency of the system will be tested by the proponents. They will check if the

proposed system works better than the old system. It will demonstrate the accuracy of the transactions and outputs. The proponents will test each module if it works properly and show appropriate output. They will also check if the system and hardware requirements are met. Unit and integration Testing. This testing is done to ensure that all aspects of the program design have been implemented in the code. These modules are tested to make sure that each performs right functions individually and as a whole when connected to each other. This was done by the proponents. They used Bottom-up Approach of Integration. All lower level modules were tested first until the top level modules were reached. Individual modules were run and checked if functions were working correctly. Then all the modules were combined as a whole system, and was run again. System testing. System testing is done to ensure that the system does what the customer wants it to do. The functionality of the system is tested. Modules are checked, making sure that all processes are complete. The transactions and processes should perform according to the requirements and should come up with the desired output. This was done by running the whole system. The payroll process was performed by running the modules starting from the DTR, Salary Computation, Maintenance and Report Generation. Incorrect were inputted to know if the system could really handle errors and faults. The interface was also checked if all buttons were named appropriately and according to its name.

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Acceptance Testing. This is the phase when the system is already complete and ready for customers evaluation. The systems function and processes are checked if it satisfies the requirements. The proponents will present the system to the customer. The customer will test it by running the system. Customers will input real data to test the system and make sure that it works properly.

CHAPTER 8 Conclusion and Recommendation

8.1 Conclusion The use of the proposed Network-based Payroll System would make the municipals payroll process accurate, fast and easy. The use of innovative products such as the Biometrics helps in attendance monitoring. It makes maintaining of attendance information easy. Computing of the total number of hours worked is also accurate and takes less time. The system automatically adds up the number of hours worked when the employee logs in and out of work through the scanner. It lessens human error and saves lot of time. The use of salary computation module, maintenance module, and networking also helps in making tasks easier. The modules are designed to be easily used and understood by users. It only takes one click of button to do transactions. Networking also allows users to share information through the computer. It takes less time, and users are able to maximize their time in accomplishing tasks. in the salary computation, module ensures an accurate computation of employees salary. Compuation of deductions for Philhealth, Pag-ibig, Withholding Tax and loan is included in the computation. Benefits and allowances like PERA, 13month pay, ADCOM, clothing allowance, productivity allowance and added benefits such as the RATA, Travel Allowance and Cash Gift are automatically added to their salary. Security is provided through the use of passwords and access level. The system can be accessed only by direct users such as the HRMO and Treasury Office. They are the only ones

68

given passwords to the system. this will keep important files hidden to unauthorized persons, making these files secured and protected. Generating of reports is accommodated by the system. The users can easily print reports such as general payroll, pay slip, remittance report and other needed documents.

8.2 Recommendation For the future researchers who will choose payroll as system study, the proponents recommend that they develop not only a network-based but online payroll system. In making the system online, users could work on their tasks at home and even on weekends. The proponents recommend the computation of loans to be included in the future studies. Salary distributed through an Automated Teller Machine (ATM) is another way of advancement for salary distribution. In this method, acquisition of salaries is more convenient and safe for employees. The use of optical scanner is also recommended for attendance monitoring. The use of this high-tech device will impose high technology advancement to the municipal office.

APPENDIX A
Data Flow Diagram of the Existing System

70

Context Diagram of the Existing System

HRMO
PEF Employee Information

BIR Tax Remittances

BIR

0
GSIS Remittances

Pay Slip

GSIS

Noveleta Municipal Payroll System

Employee
DTR

Philhealth

Philhealth Remittances

Lending Company
Loan Remittances Pag-Ibig Remittances

PAG-IBIG

71

Level O of Existing System

Employee Information 1.0 Update Employee Information Verified Employee Information Verified Employee Information D1 PEF Employee File

HRMO

3.0 D1 Employee File Generate Certificate of Tardiness/Absence

Tardiness Absences

Employee
DTR

Monthly Salary

Certificate of Tardiness and Absences

D2

DTR File

D8

2.0 Recorded DTR Record Daily Time

Loan Contribution Tax Contribution D6

Pag-Ibig Deduction

Pag-Ibig Contribution

4.0 Gross Pay Compute Gross Pay 5.0

D7 Loan File

Calculate Deduction

Philhealth deduction

GSIS Contribution

D5

GSIS deduction

PAG-IBIG deductions

Loan deductions

Tax Contribution

D4

Tax Table

Gross Pay
Tax deductions

Electronic BIR Remittance Pag-ibig Remittance Total Deductions GSIS Deductions RF-1 Philhealth deductions Remittance GSIS remittance

BIR PAG-IBIG

Philhealth

6.0

GSIS Calculate Net Pay Net Pay

Loan remittance

7.0

Lending Company

Gross Pay

Generate Report

Pay Slip

Employee

General Payroll D3
General Payroll File

72

Child of Process 4.0 of Existing System

Certificate of Tardiness and Absences

4.1 Total no. of Tardiness and Absences

4.2

Get no. of Total Tardiness and Absences

Check for Available leave Points

Leave Points

Monthly Salary 4.3 4.4 Net of Tardiness and Absences Deduct Absences and Tardiness from Equivalent Leave Points

Gross Pay

Calculate Gross Pay

73

Child of Process 5.0 of Existing System

Tax deduction 5.1 Compute W/ holding tax Tax deduction

Gross Pay Tax Contribution

Gross Pay PAG-IBIG contribution

5.2 Compute PAG-IBIG deduction

PAG-IBIG deduction PAG-IBIG deduction

Gross Pay Philhealth contribution

5.3 Compute philhealth deduction

Philhealth deduction Philhealth deduction

5.6 Compute Total deductions

Total Deductions

Gross Pay GSIS contribution

5.4 Compute GSIS Deduction

GSIS deduction

GSIS deduction

Gross Pay Loan contribution

5.5 Compute Loan Deduction

Loan deduction

Loan deduction

APPENDIX B
Data Flow Diagram of the Proposed System

75

76

Level 0 of the Proposed System

77 Child Process of 4.0 of the Proposed System

78

Child Process of 6.0 of the Proposed System

APPENDIX C
Entity Relationship Diagram

80

Entity Relationship Diagram of the Proposed System

APPENDIX D
Normalization

82

83

84

APPENDIX E
Screen Shots

86

DTR Module

Salary Computation Module

87

Employee Maintenance Module

Regular Employee Maintenance Module

88

EJO/Casual Employee Maintenance Module

Allowance Modules

89

Tax Table Module

Tax Table Module with Maintenance

BIBLIOGRAPHY Books [KEND04] [HOFF02] Theses [REYE00] [ALAR01] [DAYR07] [AVEN07] [CANT08] [JAMO08] Reyes, JBC Engineering Specialists Payroll System, 2000 J. Alarcon and B. Guerrero, Cely Rosa Bus Company Payroll System, 2001 K. Dayrit and A. Wong, Ahnex Builders Network-based Payroll System, 2007 A. Aventino, M. Lardizabal and V. Natividad, Municipal Office of Gen. Trias Network-based Payroll System, 2007 A. Cantina, C Ramirez and J. Reao, Network-based Payroll System for M.C. Trading and Gen. Mercahndise, 2008 J. Jamolin, J. Mataro and L. Torella, Mark James Hospital Payroll System with Biometrics Timekeeping, 2008 Kendall and Kendall (2004). System Analysis and Design 5th Edition. Prentice-Hall Inc. J. Hoffer, et al (2002) Modern Database Management 6th Edition . Prentice Hall.

Internet http://en.wikipedia.org/wiki/Entity-relationship_model, 2008 http://en.wikipedia.org/wiki/Computer_network, 2008