Jose Rizal University

Mandaluyong City

Payroll Management System

for

Grand Star General Contractor

A Project Study

Presented to the Faculty of Information Technology Department of the

College of Computer Studies and Engineering

In Partial Fulfillment of the Requirements for the Degree of

Bachelor of Science in Information Technology

By

John Lord G. Briton

Jhune Mackevin A. Castillo

Jerodilyn C. Castro

Louraine C. Po

________________________

RYAN A. EBARDO

September, 2019
 TABLE OF CONTENTS

CHAPTER 1: COMPANY PROFILE

Company Background………………………………………………………………… ..… 1

Mission……………………………………………………………………………………….. 2

Vision………………………………………………………………………………………… 2

Organizational Structure…………………………………………………………………… 2

Description of Organizational Structure……………………………………………………3

Office Layout………………………………………………………………………………….4

Description of Office Layout…………………………………………………………………5

Operational Terms……………………………………………………………………………5 – 6

Technical Terms………………………………………………………………………………6 – 7

Process Narrative of Payroll Management System……………………………………….8 – 11

CHAPTER 2: SYTEM ANALYSIS

Business Process……………………………………………………………………………..12 -13

Data Flow Diagram

Context Level Diagram………………………………………………………………………..13

Level 0 Diagram………………………………………………………………………………..14

Child Diagram…………………………………………………………………………………..15

Problem Definition……………………………………………………………………………..16

General Problem……………………………………………………………………………….16

Specific Problems………………………………………………………………………………17

Significance of the Study……………………………………………………………………….17

Scope and Limitations…………………………………………………………………………18

CHAPTER 3: SYTEM DESIGN

Business Processes………………………………………………………………………..19 – 20

Data Flow Diagram

Context Level Diagram………………………………………………………………….…..21

Level 0 Diagram……………………………………………………………………………...22

Child Diagram………………………………………………………………………….……..23

CHAPTER 4: SYTEM FEASIBILITY

Proposed Solution

FEASIBILITY STUDY

Technical Feasibility……………………………………………………………………………24

Operational Feasibility…………………………………………………………………………25
 CHAPTER 1

INTRODUCTION

1. COMPANY PROFILE

Grand Star General Contractor (GGC) was founded in July 2004 and has

shown history of contracting arm of Gladstone commercial, this is a family

business that engaged in the manufacture and fabrication of steel products and

aids to navigation. they offering a construction consultancy and management

services although they are new Grand Star have an experience to their specific

field of expertise ranging in civil engineering, electronic communications and

architectural designs. The company is to undertake projects such are fabrications

and installation of telecommunication towers, ports and harbors, building and road

constructions, structural steel, and also civil works and other similar ventures.

Their main office is located in Caloocan City. Engineer Elmer R. Estrella took in

charge of the construction company together with Architect Paul Tristan Joson

Operations Manager.

As of this day, their on-going projects are Renovation of the third floor in

Philippine Normal University, Philippine national Bank. And their completed projects

are Security Bank, Sutherland Global Services, Kipling, Philippine Ports Authority,

Manila Water, Department of Labor and Employment.

Grand Star General Contractor is accredited by the Philippine Constructors

Accreditation Board (PCAB).

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 2. MISSION

It is our commitment in services quality and rendering satisfactory service to

our customer and clients.

VISION

Is to become one of the leading suppliers and manufacturers of the

navigational products here and abroad.

3. ORGANIZATIONAL STRUCTURE

Engr. Elmer R. Estrella

President

Gloria R. Estrella Arch. Paul Tristan Joson Antonio D. Ledesma Jr.

Finance Head Operations Manager Account Manager

Jose Y. Dadulla Jr. Engr. Jake Mondares Chuck Vincent L. Tandoc

Accountant Project Engineer Project Engineer

Jeaneth M. Estrella Marissa C. Millan Kristofferson W. Marasigan

Treasurer Purchaser Safety Officer

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Engineer Elmer R. Estrella the one who establishes the grand star general contractor in July 2004 and

he is responsible for being the executive officer of the corporation and for seeing that the affairs of the

corporation is carried out in accordance with the provisions of the By-Laws. Gloria R. Estrella the

finance head responsibility for their company's financial health. They combine operational and strategic

roles, manage accounting and financial control functions, and establish a financial strategy for the

profitable long-term growth of the business. Architect Paul Tristan Joson is the operations manager

/architect he manages overall operations and is responsible for the effective and successful

management of labor, productivity, quality control and safety measures as established and set for the

safe and efficient operations. Antonio D. Ledesma Jr is the Accounting Manager, he establishes

financial status by developing and implementing systems for collecting, analyzing, verifying, and

reporting financial information; managing staff. Jose Y. Dadulla Jr. is the accountant, provides financial

information to management by researching and analyzing accounting data; preparing reports. Engr.

Jake Mondares and Chuck Vincent L. Tandoc are both project engineer, Completes engineering

projects by organizing and controlling project elements. Jeaneth

M. Estrella is the treasurer, responsible for corporate liquidity, investments, and risk management

related to the company's financial activities. Marissa C. Millan is the purchaser, Obtains requirements

by verifying, preparing, and forwarding purchase orders; verifies receipt of items; authorizes payment.

Kristofferson W. Marasigan is the safety officer, he ensures that construction workers are following

established policies and safety regulations.

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4. Office Layout

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 Gran Star General Contractor (GGC) is 123 Maria Clara Street, 7th Avenue Caloocan

City. It consist of 11 rooms , upon entering the opposite door is the front desk, then the

Engineering Department, Accounting Department, Staff’s room, Project Engineers room and the

pantry.

There is a connecting door through the conference room, and in the middle of the

conference room and the comfort room there is a President’s office.

Operational Terms

Gross Pay - This amount includes the total of the employee's pay calculated before anything is

taken out.

Net Pay - This amount includes employee's gross pay, or total amount, minus all tax withholdings

and deductions.

Time Sheet - A method should be used to track each employee's time for when they clock in and

out of work, for lunch and any personal time off taken during the work day. This is especially

important for hourly employees as their hours worked is used to calculate their regular pay as

well as any overtime.

Regular rate - This is the employee's regular rate of pay or straight pay.

Overtime - If the employee works over an hours, they are paid overtime for the extra hours.

Contract employees - are responsible for paying their own income taxes at the end of the year

as the employer does not withhold taxes from their pay.

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Regular employees An employee who has been hired for a position without a pre-determined

time limit. A permanent employee differs from a term or temporary employee, both of which have

a pre-determined period of employment.

Pay period is a recurring length of time over which employee pay is recorded and paid. Some

common pay periods are monthly, weekly, bi-weekly (every other week) and semi-monthly (twice

a month).

Tax a compulsory contribution to state revenue, levied by the government on workers' income

and business profits, or added to the cost of some goods, services, and transactions.

Pay checks a check for salary or wages made out to an employee.

Technical Terms

Data-flow diagram (DFD) is a way of representing a flow of a data of a process or a system

(usually an information system). The DFD also provides information about the outputs and inputs

of each entity and the process itself. A data-flow diagram has no control flow, there are no

decision rules and no loops. Specific operations based on the data can be represented by a

flowchart.

Context Diagram shows the system under consideration as a single high-level process and then

shows the relationship that the system has with other external entities (systems, organizational

groups, external data stores.

Level 0 data flow diagram (DFD), also known as a context diagram, shows a data system as a

whole and emphasizes the way it interacts with external entities.

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Data- is a set of value of qualitative or quantitative variables; restated, data are individual pieces

of information. Data in computing or data processing are represented in a structure. Data consists

of a series of facts or statements that may have been collected, stored, processed and/or

manipulated but have not been organized or placed into context.

Output Result of computerized payroll system.

System In this study, this term refers to any group as components that is related or connection

with the system.

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 PROCESS NARRATIVE OF PAYROLL MANAGEMENT SYSTEM

Grand Star General Contractor is a contracting arm running for fifteen (15) years base in

the City of Caloocan. As of today the organization is ran by 50 staffs distributed in three divisions -

Operations, Finance and Administration. To implement Payroll Management System, the

management decided to hire the expertise of Grand Star General Contractor to make a

presentation on a possible proposal.

Grand Star General Contractor immediately activated the project team and initiated

several system analysis initiatives. Having been the supervising in the team, Engineer Elmer R.

Estrella summarized the results of the data gathering initiatives with the assistance of into a

process narrative as follows:

Setting Up New Employees – New employees, in the hiring process, must fill out payroll-

specific information. Copies of this information should be set aside in the payroll department

in anticipation of its inclusion in the next payroll.

Collecting Timecard Information – Office staff and managers definitely require no change in

wages paid for each payroll, but an employer must collect and interpret information about

hours worked for nonexempt employees. This may involve having employees scan a badge

through a computerized time clock, punch a card in a stamp clock, or manually fill out a time

sheet.

Verifying Timecard Information – Whatever the type of data collection system used in the

last step, the payroll staff must summarize this information and verify that employees have

recorded the correct amount of time.

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Summarizing Wages Due – This should be a straightforward process of multiplying the

number of hours worked by an employee’s standard wage rate. However, it can be

complicated by overtime wages, shift differentials, bonuses, or the presence of a wage

change partway through the reporting period.

Keying Employee Changes – Employees may ask to have changes made to their

paychecks, typically in the form of alterations to the number of tax exemptions allowed,

pension deductions, or medical deductions. Much of this information must be recorded for

payroll processing purposes, since it may alter the amount of taxes or other types of

deductions.

Calculating Applicable Taxes – The payroll staff must either use IRS-supplied tax tables to

manually calculate tax withholdings or have a computerized system or a supplier determine

this information. Taxes will vary not only by wage levels and tax allowances taken but also by

the amount of wages that have already been earned for the year-to-date.

Calculating Applicable Wage Deductions – There are both voluntary and involuntary

deductions. Voluntary deductions include payments into pension and medical plans, while

involuntary ones include garnishments and union dues. These can be made in regular

amounts for each paycheck, once a month, in arrears, or prospectively. The payroll staff must

also track goal amounts for some deductions, such as loans or garnishments, in order to

know when to stop making deductions when required totals have been reached.

Accounting for Separate Manual Payments – There will inevitably be cases where the

payroll staff has issued manual paychecks to employees between payrolls. This may be

caused by an incorrect prior paycheck, an advance, or perhaps a termination.

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Whatever the case, the amount of each manual check should be included in the regular

payroll, at least so that it can be included in the formal payroll register for reporting purposes,

and sometimes to ensure that the proper amount of employer-specific taxes are also withheld

to accompany the amounts deducted for the employee.

Creating a Payroll Register – Summarize the wage and deduction information for each

employee on a payroll register, which can then be used to compile a journal entry for inclusion

in the general ledger, prepare tax reports, and for general research purposes. This document

is always prepared automatically by payroll suppliers or by in-house computerized systems.

Verifying Wage and Tax Amounts – Conduct a final cross-check of all wage calculations

and deductions. This can involve a comparison to the same amounts for prior periods, or a

general check for both missing information and numbers that are clearly out of line with

expectations.

Printing Paychecks – Print paychecks, either manually on individual checks or, much more

commonly, through a computer printer, with the printouts using a standard format that

itemizes all wage calculations and deductions on the remittance advice. If direct deposits are

made, a remittance advice should still be printed and issued.

Keying Payroll Information in General Ledger – Use the information in the payroll register

to compile a journal entry that transfers the payroll expense, all deductions, and the reduction

in cash to the general ledger.

Sending Out Direct Deposit Notifications – If a company arranges with a local bank to

issue payments directly to employee accounts, then a notification of the accounts to which

payments are to be sent and the amounts to be paid must be assembled, stored on tape or

other media, and sent to the bank.

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Depositing Withheld Taxes – The employer must deposit all related payroll tax deductions

and employer-matched taxes at a local bank that is authorized to handle these transactions.

The IRS imposes a rigid deposit schedule and format for making deposits that must be

followed in order to avoid penalties.

Issuing Paychecks – Paychecks should, at least occasionally, be handed out directly to

employees, with proof of identification required; this is a useful control point in larger

companies where the payroll staff may not know each employee by name, and where there

is, therefore, some risk of paychecks being created for people who no longer work for the

company.

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 CHAPTER 2

SYSTEM ANALYSIS

2.1Business Process

The payroll process starts after the hiring of the employee, each pay period, employees work and must

be paid based on their hours and pay rate. However, before giving the employees paycheck you need

to process deductions, such as tax, insurance etc. provided to the employee in a pay check, direct

deposit or the other method such as ATM card. There are some processes of each payroll to pay

period: Collect time worked to process the correct payroll information start by collecting each

employees time worked in the pay period.

Most companies used a time sheet, time clock, time keeping system.

Calculating Earnings and Deductions input the data (hours worked) into payroll system. The process to

calculate paychecks will be the same whether they do payroll manually. Count the hours verify hours

work against the time card to make sure the employees that the company is paying for the correct

number of hours work. Determine Overtime if the employee who worked over 40 hours a week and pay

overtime (time and a half) for those hours. Overtime is paid at time and a half calculate Gross Pay

multiply the pay rate times the hours worked to come up with the gross pay. You’ll need to ensure to

use the employees regular or straight time pay rate for regular hours, and overtime pay rate for

overtime hours.

Regular Pay + Overtime Pay = Gross Pay

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Then add those two kinds of pay (regular and overtime) together to come up with the total gross pay.

Take deductions if process manually we have to determine the deductions such as benefits, taxes,

and insurance those need to be taken out of the employee’s gross pay each pay period. Calculate

the net pay if manual processing subtract the deduction and come up with the net pay as result.

Gross Pay – Deductions = Net Pay

Data Flow Diagram

Context Level Diagram

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2.1.1 Level 0 Diagram

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Child Diagram

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2.3 Problem Definition

Our payroll management system defined as a method of administrating

employees’ salaries in the organization. The process consists of calculations of salaries

and tax deductions of the employees, administrating the retirement benefits and

disbursement of the salaries of the employees. It can also as an accounts activity which

undertakes the salary administration of employees in the organization.

Employees are usually in hurry upon the arrival on leaving and hence require

system that takes absolute minimum amount of time in registering their attendance.

Employee can easily clock in or out on behalf of another, calculating employees working

hours take of real effort, reports are always vulnerable to data entry errors, inaccurate

working hours cost of thousand pesos monthly.

2.3.1 General Problem

The general problem that the researchers intends to solve is how the streamline the

payroll management system of Grand Star General Contractor.

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Specific Problems

• Some common problems by the accounting staff of the company

in terms of using their manual system in processing payroll and

time keeping.

• Administrative overwhelm

• Organizational issues

• Compliance issues

• Manual Processing

3.0 Significance of the Study

The significance of the proposed study has classified according to the use

of proposed system. This study has been beneficial to the following:

Employee. The study will benefit the employees granting an error free

computation of their salary.

Organization. The study will provide their employees accurate results of the

payroll that will be very efficient and effective.

This part is to have a better service for the employee and less error

of their payroll system, the company, employee, proponents, and other

person who involved this system also have benefits from our proposed

system. The accountant will also benefit from this system this will help them

to have a faster way of retrieving and updating the of employee’s records.

The company will benefit from this system, 17

 The Owner will benefit from this system because of this will make checking

of the employees, their payroll and even attended needs and problems.

this will help them to have a better service, to update their record

easily and this can also keep track the performance of their employee.

3.1 Scope and Limitations

Scope

This study will scope our Payroll Management System will cover the process

of preparing the pay slip of each employees, monitor loans, cash advances,

charges, keeping the records and easily computes the basic pay, regular

overtime pay, overtime with night differential pay, gross pay, SSS

contributions, PhilHealth contributions, Pag -Ibig contributions.

Limitations

The system cannot generate report of appraisal and evaluatio n reports

of the employee because it was not includi ng in the system.

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 Chapter 3:

SYSTEMS DESIGN

Proposed Solution

Business Processes

Description of the Proposed Processes

As we build a fasten processing of making a payroll system. Gran Star General

Contractor is having a specific problem with their system precede that involved

calculations and recording of essential data. The company is using manual payroll

system which experiencing slow processing of data and also very costly since it takes

up a lot of time, resources and money. In order to cope with it, the staffs are extending

their time

There is also a high volume of errors using manual computation. For that matter, the

proponents decided to build up a system in which it will try to solve this kind of problem.

Then, there would be less, efforts to be done and no more unorganized flow of

processing. For this reason, the proponents come up with a payroll system that will

manipulate the information receive and transmitted to produce an efficient and effective

process that can be use to a Gran Star General Contractor.

Payroll is the sum of all financial records of salaries for an employee, wages, and

deductions. In accounting, payroll refers to the amount paid to employees for services

they provided during a certain period of time. Payroll plays a major role in a company for

several reasons.
A payroll system allows businesses to follow a set series of processes in order to make

timely, correct payments in compliance with government regulations. 19

The payroll systems typically includes calculating employee's pay, recording payroll

transaction and determining and paying the taxes and beneficiary.

And our payroll system enables the employer to process its payroll through a

computerized system and it makes the computation of the employee's salary faster and

efficient, while a manual payroll system requires that the payroll be processed by hand

and is therefore a considerably slower procedure than an automated system.

• It takes a lot of time computing the salary of the employees

• There is also a high volume of errors using manual computations.

They must start using of computerized systems that will make their work easier.

We recommend the start of using this Computerized Payroll System, that will practically

ease the task and improve service more. We assure that records of the employee's are

more secured because of limited users ac

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Data Flow Diagram

Context Level Diagram

21
Level 0 Diagram

22
Child Diagram

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 CHAPTER 4

SYSTEM FEASIBILITY

Proposed Solution

Feasibility Study

Before developing this project, we need a feasibility study to understand whether the

project would be successful or not. Feasibility study is detailed analysis of any system.

The two criteria to judge feasibility are cost required and value to be attained.

Factors of Feasibility Study:

Technical Feasibility:

The assessment is based on an outline design of system requirements, to determine

whether the company has the technical expertise to handle completion of the project.

In our case, ‘The Grand Star General Contractor’ has an

efficient IT department and the personnel from the accounts department has that

expertise.

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Operational feasibility:

This feasibility study measures how well a proposed system solves

t h e problems, and takes advantage of the opportunities identified during

scoped e f i n i t i o n a n d h o w i t c a n o r g a n i z a t i o n a d o p t i d e n t i f i e d i n t h e

r e q u i r e m e n t s analysis phase of system development

Development costs:

Development cost is incurred during the development of the system are onetime

investment, its Include the Adequate Software, Hardware requirements, labor cost,

supplies cost, electric consumption, food and transportation cost.

Cost and Benefits Analysis

Cost benefit analysis (CBA) it is important to identify cost and benefitfactors.

It’s a technique designed to determine the feasibility of a project or plan by

quantifying its cost and benefits. Through this analysis you will be able toc o m p u t e

the total cost saving, payb ack period and net saving by use of

t h i s formulation.

Annual Cost = E x i s t i n g C o s t – P r o p o s e d C o s t

Payback Period = A n n u a l C o s t / P r e s e n t V a l u e

Net Saving = End Cumulative Present Value – Total Development Cost

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