Page 102 - Accountancy_F5

Preparation of payroll accounts

Employers maintain records with information of each employee salary including hours
worked, the rate of pay, total overtime, entitlement and additions to salary, reductions
from salary and employee’s net salary pay. Payroll records refer to documents kept by
entities for recording payroll transactions or information. Basically, the two major payroll
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records are individual earning statement (salary slip) and payroll summaries.
Individual earning statement (salary slip)
This is a document given to an employee informing about the summary of items which
resulted to the amount to be paid. At the end of each pay period, this statement
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to every employee to communicate his/her earnings information for that period.
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A salary slip looks as shown below:
Name of employee: ................................................................

Payroll No: .............................................................................
Month: ...................................................................................
Details TZS TZS
Basic pay xx
Add: Overtime payment xx
Transport allowance xx
Rent allowance xx

Meal allowance xx xx
Gross pay xxx
Less: Deductions
PAYE xx
NSSF / PSSSF xx
NHIF xx
Salary advance/loan xx
Trade union xx xx
Net pay xxx
Note: The cheque is written on the basis of the net pay amount.

Payroll summary
Payroll summary refers to a report which provides periodical analysis of payments that
was made to the employees. Some organisations have several departments or operating
units. Usually, payroll is prepared along departmental lines. From the information on
the salary slips, it should be possible to prepare a payroll summary for the department.
Salaries can be paid in cash, by cheque or by credit transfer to various employees’ bank

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