Automated or
Computerized
Payroll System

By
Marjorie D. Escueta
Marvin E. Prendol
Sonnylyn R. Rico
Apple Rose C. Yanong
CHAPTER 1: INTRODUCTION TO THE
STUDY
1.1 INTRODUCTION
Payroll is the total of all compensation a business must pay to its
employees for a set period of time or on a given date. The payroll
process can include tracking hours worked for employees, calculating
pay, and distributing payments via direct deposit or check.
 
Payroll is a major expense for most companies and is the primary
component of labor cost. Labor costs vary by industry, and comparing
companies in different industries should be done with this in mind.
 
In the accounting world, doing payroll is a crucial but often
thankless job. The calculations must always be accurate, the paychecks
must be printed on time, new and departing employees must be added
to or deleted from various processes, and the taxes must be remitted to
the proper authorities on time and in the correct amount. As soon as
the process ends, it begins again. Many companies outsource some of
the work.
 
 
 1.2 BACKGROUND OF THE STUDY
 
Pooten & Associates law Office started more than ten years ago
as a law firm specializing in all aspects of the legal profession,
including, but not limited to criminal cases, civil cases, labor cases,
tax cases, and other related cases to address the growing needs of all
clients needing legal assistance. On the one hand, it act as counsel to
clients in any proceeding; on the other, they also work as a research
and consulting company, purveying all sorts of information and
opinions on any question of law, politics and related subjects. Their
field of practice ranges from construction arbitration to litigation in
the regular courts and quasi-judicial bodies.

Our motivation on their existing process is to improve it, secured

the backup files and records. Because, this factors will lead to faster,
shorter and lessen of processes and organized of important data. Our
focus is become user-friendly to the user, effectiveness, simplicity,
accuracy and attractiveness.
 
 
 
 1.3 STATEMENT OF THE PROBLEM
 
 
1.3.1 GENERAL PROBLEM
Employees depend on their income to maintain their
lifestyle. Consequently, they expect their employer to
pay them accurately and on time. When payroll errors
occur, employees often become panic-stricken. A
manual payroll system is done entirely by hand. The
problems with a manual system are many, the room for
error is high because all payroll tasks are done manually.
Thus includes calculating time sheets, wages, and taxes,
issuing checks, verifying the payroll and recording
payroll transactions.
The old system is outdated and no longer adequately
manages the payroll process and the entry of employee
time card information. Therefore, manual intervention is
required to process the payroll.
 

1.4 OBJECTIVE OF THE STUDY

To implement and develop an automated payroll

system or computerized payroll. This enables the
employer to process its payroll through a computerized
system. It makes payroll processing simpler and
reduces errors, which are more likely with the manual
system.
 
 
 
 
 
 
 
 
 
 
 
  
1.5 CONCEPTUAL FRAMEWORK
The study conceptual framework was described using system
approach (Input-Process-Output).
OUTPUT
OUTPUT
INPUT
INPUT
intervie
Software
Software w Maintena
-Vb. Net nce
-Vb. Net
-MS SQL 2005
-MS SQL 2005

Data
Require Implementa
Hardware -ments
tion
COMPUTERIZEDPA
COMPUTERIZEDPA
Hardware
YROLL
YROLLSYSTEM
SYSTEM
-Barcode Reader
-Barcode Reader
-Computer (intel core (CPS)
-Computer (intel core (CPS)
i5 or i7)
i5 or i7) Data Flow
-2GM RAM or higher Diagram Debuggi
-2GM RAM or higher
ng

People ware Software

People ware Design Testing
-Admin
-Admin
Reference:
-Payroll accountant or Reference:
-Payroll accountant or
staff accountant IT thesis (smiling line
staff accountant IT thesis (smiling line
sales and management
-Employee sales and management
-Employee Coding system) page 9.
system) page 9.
 
1.6 Scope and limitations
1.6.1 Scope
The system is designed for enhancement of
computerized payroll system for Pooten and
Associates Law Office it includes features that
can add employee’s record, edit employee’s
information, delete employee’s record,
print/save the pay slip of each employee and
updating employee’s as well as the weekly
salary, cash advance, the rate per day,
overtime, gross payment, net pay and
deduction such as withholding tax and SSS.
 
 
 1.6.2
Limitations
This study limits only to the proposed enhancement
computerized payroll system of the Pooten and Associates Law
Office.
A proposed system which can only be access by authorized
person.
It does not support network topology implementation online
program or online transaction.
 1.7 Hypothesis Of The Study
 
We have asked with building a new
payroll system to replace the existing
system which is hopelessly out of date.
Pooten & Associates needs a new system
to allow employees to record time card
information electronically and
automatically generated based on the
number of hours worked.
 

1.8 Significance Of The Study

 
The proposed system will help the accounting
section of Pooten & Associates Law Office
especially the payroll maker/bookkeeper and the
Finance Officer. It will help to lessen the time and
effort of the payroll maker/bookkeeper preparing
payments of employees.
 
The system develop can accommodate
changing figure and produce a paperless
environment through well design database.
 
 
 
 
 1.9 Definition Of Terms
 
1.9.1 Operational Terms
 
Manager – An individual who is in charge of a certain group of tasks,
or a certain subset of a company. A manager often has a staff of
people who report to him or her.
 
Employee – An individual who works part-time of full-time under a
contract of employment, whether oral or written, express or implied,
and has recognized rights and duties. Also called worker.

HR (Human Resource) is also the function in an organization that

deals with the issues related to people such as compensation and
benefits, recruiting and hiring employees, onboarding employees,
performance management, training and organization development
and culture.

PAYSLIP – a small document, included with an employee’s wage or

salary, giving details of money earned, tax and insurance paid.
PAYCHECK – also spelled pay check or pay cheque, is traditionally a
paper document issued by an employer to pay an employee for
services rendered.
 
PAYROLL – is a company’s list of its employees, but the term is
commonly used to refer to the total amount of money that a
company pays to its employees. A company’s records of its
employee’s salary and wages, bonuses, and withheld taxes.
 
 Salary – a fixed regular payment, typically paid on a monthly or
weekly basis but often expressed as an annual sum, made by an
employer to an employee, especially a professional or white collar
worker.
 
Withholding Tax – Is an amount that an employer withholds from
employee’s wages and pays directly to the government the amount
of withheld is a credit against the income taxes the employee must
pay during the year.
 
 
Employee Benefits – are provided to employees over
and above salaries and wages. These employee benefit
packages may include overtime, medical insurance,
vacation, profit sharing and retirement benefits to name
just a few.
 
Gross Pay - is the total paid to an employee each pay
period, and is determined in different ways for salaried
and hourly employees.

Overtime –is the additional amounts paid to hourly

employees who work over 40 hours in a week, who
works on weekends or other additional amounts. The
federal minimum overtime requirement is that overtime
must be paid at 1 ½ times pay rate for employees who
work more than 40 hours a week. Of course, you can
pay overtime at higher value.
 1.9.2 TECHNICAL TERMS
 
UML (Unified Modeling Language) – is a general
purpose, developmental, modeling language in the field
of a software engineering that is intended to provide a
standard way to visualize the design of a system.
 
ERD (Entity Relationship Diagram) – shows the
relationships of entity stored in a database. An entity set
is a collection of similar entities, these entities can have
attributes that define its properties.
 
Automated Payroll System – enables the employer to
process its payroll through a computerized system.

 
 
 
1.10 Unified Modeling Language (UML)
Diagrams

Can Access the

Log in/ logout
whole Payroll
System
Admin

Can view all the

Log in/ logout transactions and
the employee’s
ACCOUNTING STAFF information

Showed their
Log in/ logout
payslip

Employee
1.11 Entity Relationship Diagram (ERD)

Log in to the Payroll

STAR Management System

T
Check User Level and
Permissions

Check Check Check Check

Permission Permission Permission Permission
Check
Permission

Manage Appraisal Manage Working Points

Manage Payroll Manage Salary Manage Employee

Logout From the System END

 2.1: REVIEW ON RELATED STUDIES
Nowadays, many payroll system implemented in
different companies here in the Philippines because
payroll system is one of the most important in
establishing a business firms on how you provide the
right and appropriate benefits for the employees in the
company. Business firms must operate within the
boundaries of laws and government regulations, Laws
have been developed not only to protect consumers but
also to promote competition among business and
industries. Over half a century on, it’s fair to say that
payroll is now one of the most commonly automated
business operations; and certainly the most frequently
the most used HR Solution that maintaining payroll
record is one of the most important financial tasks in any
business.
 
 
2.1.1 Local Studies
TITLE: Design and Implementation of La Salle University
Payroll System

DATE: 2009
PROPONENTS: Luisander C. Luy and Carin Z. Cabatingan
SOURCE:https://www.lsu.edu.ph
/application/files/7014/7134/1158/Vol._14_No._5_-_Design_and_Imple
mentation_of_La_Salle_University_Payroll_System.pdf
TITLE: WEB BASED PAYROLL SYSTEM

DATE: 2003
PROPONENTS: DIANA CARDENAS, AMBER LUI
SOURCE:
https://www.academia.edu/31818773/WEB_BASED_PAYROLL_SYSTEM_LAS_PI
NAS_CITY_HALL_In_Patial_Fulfillment_Of_The_Requirements_for_the_Degree_B
achelor_of_Science_in_Information_Technology_Members
 
Title: Dumaguete launches automated
payroll system

DATE: SEPTEMBER 10 2018

PROPONENTS: Rey Anthony H. Chiu
SOURCE: https://pia.gov.ph/news/articles/1012470
 2.1.2 Foreign Studies
TITLE: DESIGN AND IMPLEMENTATION OF EMPLOYEE
INFORMATION AND PAYROLL SYSTEM

DATE: July 2017

PROPONENTS: Kolawole Emmanuel Kowale
SOURCE:https://www.academia.edu
/39015107/DESIGN_AND_IMPLEMENTATION_OF_EMPLOYEE_INFORMATION
_AND_PAYROLL_SYSTEM_USING_CALEB_UNIVERSITY_AS_A_CASE_STUDY
 TITLE: WHY BUSINESSES AUTOMATE HR AND PAYROLL
PROCESSING IN CHINA

DATE: August 20, 2018

PROPONENTS: China Briefing and Bradley Dunseith
SOURCE:https://www.china-briefing.com/news/whybusinesses-automate-hr-
andpayroll-processing-in-china/?fbclid
=IwAR0EPYsSiYRa1BJU6iDDSwVPDacgfqFrroY5W4T8nUZmO0dEMlSmlkocDjc
TITLE: AUTOMATED PAYROLL SYSTEM

DATE: May 12, 2011

PROPONENTS: M.IqbalZainal A
SOURCE:
http://eprints.uthm.edu.my/1198/?fbclid=IwAR2iQ_FYuYn-UBw0Gjy
3uR2H1lh28rS4t1a50egh7DFOlyL195La8grrSdE
2.2 REVIEW ON RELATED
LITERATURE
 
Payroll system is an important software program that calculates
payroll accurately in compliance with taxing authority and one of
the many transactions that being worked on computer. The
proponents worked on a custom-made payroll system done for the
specific need of the company like Pooten Law Office which has
many workers. Many companies wants an efficient way of
calculating pays than a manual system to improve productivity,
simplicity and effectiveness of payroll system. Having a payroll
system is very useful and efficient way to simplify information,
generate reports and minimize manual efforts and other details.
A great example uses of this system is the accounting and HR
that has the most difficult job to monitor the daily performance and
salary of the employees by using payroll system it provides great
advantages to organization.
Using of this system it’s quickly and easily generate payslip for
all employees and the employees have more extra time to manage
its own payroll unlike other who is using manual payroll system.
 2.2.1 Local Literature
 TITLE:
ATTENDANCE MONITORING WITH PAYROLL
SYSTEM

DATE: OCTOBER 3, 2011

PROPONENTS:
SOURCE:
https://phdessay.com/attendance-monitoring-with-payroll-system/
?fbclid=IwAR3Sy_-5sZD1yhyc7Jh4BK2lmHVF9HFjCjsN90aWMNL8k
Mg1N74JkeEnAR0
 TITLE: PAYROLL SYSTEM WITH DAILY RECORD USING
BIOMETRIC SYSTEM

DATE: 2013
PROPONENTS: FeliceGrazielle M. Adlaon, Sharellyn U. Enriquez, Paul
Laurenz B. Estrebillo
SOURCE:
https://ejournals.ph/article.php?id=6128&fbclid=IwAR371_FrZydlPWQRjU
hWc_O-WuiAhHms4lZ_lzvs5Ze8Z-t5erGn-MgQmfY
  TITLE: A COMPUTERIZED PAYROLL SYSTEM FOR THE
BARANGAY DITA

DATE: APRIL 6, 2014

PROPONENTS: Acel Carl David O. Dolindo
SOURCE:
https://www.slideshare.net/acelcarl23/thesis-about-computerized-payroll-sy
stem-for-barangay-hall-dita?fbclid=IwAR1vL3QKpriKzNiT3pAcAmbE1nVUM
1TQrJwZUtSkj29Xf0PASiFcLfgKxEU
 2.2.2 Foreign Literature
Title: Biometric attendance System based on Fingerprint
Recognition

Date: 2010
Proponents:Muhamad Umar, Abdul Rahman
Source:https://www.academia.edu
/7949069/Day_Month_Year_Thesis_Project_Title_Biometrics_Attendanc
e_System_Based_On_Fingerprint_Recognition_Particulars_of_the_stud
ents_Name_in_Full_Use_Block_Letters_2010-_gcuf-5500-526
TITLE: A PROPOSED COMPUTERIZED PAYROLL
SYSTEM

DATE: 2009
PROPONENTS:
SOURCE:
https://www.bartleby.com/essay/A-Proposed-Computerized-Payroll-System-
PKWYZKS8CKDQ?fbclid=IwAR0e8rjEoRkjjNEoJFsEwb4Ym5hxdv5j5137lfie3
mOl6PsDQwflBmlPxJI
 TITLE: AUTOMATED PAYROLL: PROVIDING
COMPLIANCE, EFFICIENCY AND ACCURACY

DATE: 2017
PROPONENTS: Alex Margolin
SOURCE:https://papayaglobal.com
/blog/benefits-of-an-automated-payroll/?fbclid
=IwAR3U6-7gv390wQahzs61av4ebXS55fszM3UIDsti-RV88LodHy
aEK2rsScE
 2.2.3 Synthesis
There are many variations of making a computerized payroll
management system on how the client or the owner wants to operate
within his business like the study in HYCO Laboratory Co. that they use a
biometrics with online data analytics dashboard to view information or
save the online studied since 2014 and also the research entitled “intuit
payroll of intuit since 2013” claims that with the use of payroll systems
computation of paychecks or pay slip are precise and always on time,
taxes are clear and liquefied, and tracking of employee records are easy
and organized. The revolutionary systems regarding payroll helps to
eliminate tasks made by man and therefore also eliminating the risk of
human errors. As well as payroll outsourcing company, Oasis
outsourcing (2013) believes that through web-based payroll systems,
the management can access information from in and out of the office.
But with the limited access and multiple levels of security options can
provide reliable and accurate updated records and computations. And
also the study of payroll entitled “automated daily time records and
payroll system of Laguna water district (2004)” recommended to use a
hardware such as iris scan, thumb mark scanner and other biometrics
innovation for additional security and further technology advancement
should be taken into consideration.
 
CHAPTER III- RESEARCH
 

METHODOLOGY

3.1 RESEARCH DESIGN

 
The proponents used the survey method research
where the participants answer the questions through
an interview or asking questions by that the
proponents can get some idea on how the system will
works. The given answer by the participants in the
questions described by the proponents will help them
in their study. The questions are constructed properly
in order for the survey to be both reliable and valid.
The questions should be written and understandable
so that it is clear and easy to comprehend.
 
 
3.2 METHOD USED IN DEVELOPING AND
EVALUATING THE SOFTWARE PRODUCTS (IMAGINE)
 
The software process has eight phase’s interview, data
requirement, data flow diagram, coding, testing,
debugging, implementing and maintenance. In
developing this study, the proponents decided to use v-
shape model because it’s a sequential path of execution
of processes they believed that each process is not as
complicated to other process. The proponents believed
that it is simple and easy to use and very reliable because
once coding is complete, the path of execution continues
up the right side of V where the test plans developed
earlier are now put to use.
 
 
 INTERVIEW MAINTENANCE

DATA REQUIREMENT IMPLEMENTATION

DATA FLOW DIAGRAM DEBUGGING

CODING TESTING

V-SHAPE MODEL
 
The first phase of the process is interview in this phase we will request for a
face to face interview to Atty. Basilio B. Pooten to know their goals and
insight with the proposed study.
The second phase of the process is data requirement in this phase we will
gather all the data or document to be use both in software and hardware.
The third phase is data flow diagram in this phase the overview of the
system will be presented by graphical form that can be used to visualize the
proposed system.
The fourth phase is coding in this phase focuses on the technical part of
the system wherein the proponents will do the coding using the chosen
program language which is Visual Basic Net.
The fifth phase is testing in this phase initial test will be done to the
system from start to end process this is to ensure the quality and
performance of the system.
The six phase is the debugging in this phase all issues, errors and
problems incur from the testing will be documented and fix.
The seven phase implementation in this phase the system will now
introduce to Atty. Basilio B. Pooten key users. It is also known as the Go Live
stage wherein the system will be used as live system.
The eight phases is maintenance in this stage modification of the system
is being done to improve performance and to easily adapt change in
requirements.
 
 
3.3. RESPONDENCE DISTRIBUTION
 
 
In order to continue the development of the proposed
system, we have conducted a survey on the Pooten and
Associates Law Offices due to our system will be
distributed. The respondents will be respondent of a
100%. The proponents will prepare a set of survey
questions for them to understand the efficiency of the
proposed system and for the proponents to determine the
reaction of the respondents on their system.
 RESPONDENTS ESTIMATED PERCENTAGE
POPULATION

ADMIN
2 6.25%
ACCOUNTING
STAFF 5 15.625%
EMPLOYEES
25 78.125%
TOTAL
32 100%
*The percentage is used to determine the quantitative relation to
the whole response. The process of gathering the percentage was
dividing the frequency by the total number of responses to
compute for the percentage
Percentage Formula
P= (f/n)*100
where
P= percentage
f= frequency
n= total number of respondents

P= (f/n)*100
P= (2/32)*100
P=6.25%
percentage of admin= 6.25%
 
P= (f/n)*100
P= (5/32)*100
P=15.625%
percentage of accounting staff= 15.625%
 
P= (f/n)*100
P= (25/32)*100
P=78.125%
percentage of employees = 78.125%
 
 
 3.4 DATA GATHERING PROCEDURES
 
In the data gathering information the
proponents aim to get information to better
understand their interest, want and needs
from the respondents using an interview or
question/survey and answer. The
proponents using standard validated
techniques by several interviews to the
authorized personnel who can help in their
study, the proponents will tally the
response according to their questionnaire.
 
 
 
3.5 INSTRUMENT
 
Tools and instrument help the proponents for gathering
data to be use as a basis for conclusion or making
inference. Some of tools are brainstorming, observation,
interviews and internet research.

BRAINSTORMING
It is a group creativity technique by which efforts are
made to find a conclusion where a group of people meet
to generate new solution and ideas spontaneously
contributed by its member. The proponents shall give
each other views and opinions on what particular area to
study.
 
The proponents will present a list of possible suggestion
and subject to discuss. After the several discussions the
proponents will able to get a final decision on what they
OBSERVATION
 
This was used to find more information and different
feedbacks of the people that take the survey.
 
INTERVIEWS/QUESTIONAIRE
 
It is freewheeling and open-ended conversation
between two people where the interviewer asked a
question to interviewee to obtain information.
 
INTERNET RESEARCH
 
The internet used by proponents in searching for the
local and foreign studies and literature included in the
proponent’s proposal.
 
 
 3.6 STATISTICAL TREATMENT
   
 
 
Proponents will use the following
  formula and scale to get the accurate data. It
 
 
is to ensure that data gathered are not bias.
 
 
 
 
 
 
 
 
3.6.1 CLUSTER SAMPLING
 
Proponents used the “Cluster
Sampling” for the distribution of the
questionnaires. It is refers to a type of
sampling method. With cluster sampling
the proponents divide the population into
separate groups called cluster0s. Then a
simple random sample of cluster is
selected from the population. Proponents
conduct analysis on data from the
sampled clusters
Cluster Sampling

FORMULA Wherein:
 
P = n (100%) P = percentage of respondents
n= number of respondents
N N= total number of population
 
 

ADMIN ACCOUNTING EMPLOYEES

P = 2 (100%) STAFF P = 25(100%)
P = 5 (100%)
32 32
32
P = 6.25% P = 15.625% P = 78.125%
3.6.2 SLOVIN’S FORMULA
 
The proponents will use the Slovin’s formula to get the sample
data out of total population of the employee. The result of this will
be the total number of respondents who voted out of total number
of employee.

FORMULA Wherein:
 
n= number of samples
n= N__ N= total of population
1+Ne2 e= desired margin of error
 
Therefore:
n= ____32______
1+ (32)(0.05)2

n= ____32______
1+ (32)(0.0025)

n= ____32______
1+ 0.08

n= ____32______
1.08

n= 29 (Total number of respondents)