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NETWORK – BASED PAYROLL SYSTEM FOR NOVELETA MUNICIPAL OFFICE
An Undergraduate Research Proposal Presented toThe Computer Studies Department
College of ScienceDe La Salle University–Dasmariñas
In Partial Fulfillment of the Requirements for theDegree of Bachelor of Science in
Computer Science
Melju Fatima B. AtogRomel G. Cruz
Joanna Marie R. Marce
October 2008
TABLE OF CONTENTS
Table of Contents i
List of Appendices iv
Acknowledgement v
Abstract vi
1. 0. INTRODUCTION 1
1.1. Background of the Study 1
1.2. Statement of the Research Problem 3
1.3. Statement of the Objectives 4
1.4. Significance of the study 5
1.5. Scope and Limitations of the study 6
1.6. Methodology of the Study 7
2.0. RELATED LITERATURE 10
2.1. Local Literature 10
2.2. Foreign Literature 14
3.0. THEORETICAL FRAMEWORK 18
3.1. Statement of Assumptions 18
3.2. Operational Definition 18
3.2.1 Definition of Terms 18
3.2.2 Definition of Processes 22
3.3. Theories used in the study 23
i
4.0. THE EXISTING SYSTEM 28
4.1. Description of the System 28
4.2. Definition of Data Capture 29
4.3. Inputs 31
4.4 Processes 32
4.5. Files 35
4.6. Outputs 38
4.7. Problem Areas 41
5.0. THE PROPOSED SYSTEM 43
5.1. System Overview 43
5.2. System Objective 45
5.3. Scope 45
5.4. System Justification 47
6.0. SYSTEM DESIGN 49
6.1. Inputs 49
6.2. Processes 52
6.3. Files 55
6.4. Output 59
7.0. IMPLEMENTATION 61
7.1 Resource Requirements 61
7.1.1 System Requirements 61
7.1.2 Hardware Requirements 61
ii
7.1.3 Human Resource Requirements 62
7.2. Installation Plans 63
7.2.1 System Installation 63
7.2.2 Training Plans 63
7.2.3 Conversion Plans 64
7.2.4 Testing 65
8.0. CONCLUSION AND RECOMMENDATION 67
8.1 Conclusion 67
8.2 Recommendation 68
Appendices
Bibliography
iii
LIST OF APPENDICES
A. DFD of Existing System 69
B. DFD of Proposed System 74
C. Entity Relationship Diagram 89
D. Normalization 81
E. Screen Shots 85
iv
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.
v
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.
vi
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, Noveleta’s 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.
2
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.
3
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. To gather information and necessary materials needed to develop the system.
2. To conduct interviews from the persons involved and observations from the
company.
3. To determine the problems of the company regarding their current payroll system.
4. To provide possible solutions for problems identified.
5. To develop prototype of the system and gather feedback from prospective users
about the proposed system.
6. To help the municipality become updated to the modern world using the system.
7. To apply the theories of DFD, ERD, Normalization and Networking in order to
provide solutions and improve the current system.
4
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.
5 2
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.
6 2
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 V-
Model include:
Figure 1.1 V-Model
Requirements Analysis
Systems Design
Program Design
Coding
Unit and Integration
System
System Testing
Acceptance Testing
Operation & Maintenance
Validate requirements
Verify Design
7 2
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.
8 2
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.
9 2
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
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 specialist’s Payroll System
A. Reyes, 2000
JBC Engineering specialist’s 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’
11
main objective in developing the system is to make the company’s 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 specialist’s 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 Piñas
L. Gawaran, 2007
The current payroll system of Citimotors Las Piñas is prepared manually. Noticeably, it
has an array of disadvantages. That is why a Network-Based payroll system for the Citimotors
Las Piñas 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 company’s 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
12
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.
Dasmariñas Municipality Payroll System
L. Lardizabal , 2005
The Dasmariñas 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 municipality’s current system better and more efficient with the use of
the computer.
The proponents’ study focuses on Noveleta Municipality payroll system. In comparison
with Dasmariñas Municipality Payroll system, the system created was from manual to
computerized system. The proponents created a reliable, secured and convenient payroll system
13
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.
14
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.
15
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
employee’s 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
16
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.
17
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 municipality’s 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.
• 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 employee’s 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
employee’s salary computation
• GSIS deduction File - indicates the percentage of deduction to the employee’s
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.
19
• 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 – Employee’s 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-IBIG’s percentage of deduction to the
employee’s salary.
• Pay slip – A detailed breakdown on how much an employee is paid during a
specific period.
• Payroll – It is a detailed computation of salary’s financial record. It includes
bonuses and deductions made to every employee’s 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
20
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
employee’s 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.
21
• 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.
• Record Daily time – Records the daily time of employees into the DTR
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.
22
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 Noveleta’s
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 employee’s 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.
23
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).
24
The proponents used data flow diagram to fully understand the flow of data which would
give them a bird’s 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.
25
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.
26
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.
27
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 mayor’s specification.
The TO generates pay slip and gives it to the employee.
4.2 Definition of Data Capture
4.2.1 CS Form 212(Revised 2005) Employee Information
Data Entry Field name Field Type
Surname Lname text
First Name Fname text
Middle Name Mname text
Date of Birth Bdate date/time
Sex Sex text
Civil Status Cstatus text
Citizenship Citizen text
Residential Address Radd text
GSIS ID no. Gid text
PAG-IBIG ID no. Pid text
PHILHEALTH no. Philno text
TIN Tin text
4.2.2 Daily Time Record
Data Entry Field name Field Type
Pay Ending Pend date/time
Name Ename text
Position Pos text
Age Age number
Department Dept text
29 27
Time in Timein date/time
Time out Timeout date/time
4.2.3 CSC Form no. 6
Data Entry Field name Field Type
Office/Agency Office text
Last Name Lname text
First Name Fname text
Middle Name Mname text
Date of Filing Dfiling date/time
Position Pos text
Number of working
Days Dwork number
Type of leave Ltype text
4.2.4 Pay Slip
Data Entry Field name Field Type
Name Empname text
Pol No. Polno text
Month Salary Msalary number
30 27
4.2.5 Certificate of absences and tardiness
Data Entry Field name Field Type
Last name Lname Text
First name Fname Text
Middle name Mname Text
No. Of late late number
No. Of Absences Absences number
4.2.6 General Payroll
Data Entry Field name Field Type
Number Num text
Name Name text
Position Pos text
Monthly Salary Msal number
Gross Salary Gsal number
Adcom Adcom number
Net pay Net number
4.3 Inputs
Name of Reports: DTR
Number of Copies: 1
Frequency of Distribution: daily
Purpose: Absences and Tardiness
31 27
Name of Reports: PEF
Number of Copies: 2
Frequency of Distribution: every December and June
Purpose: Employees’ Performance
Name of Reports: Personal Data Sheet
Number of Copies: 1
Frequency of Distribution: Hiring
Purpose: for Employment
Name of Reports: Certificate of Tardiness and Absences
Number of Copies: 1
Frequency of Distribution: Cut off period
Purpose: 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
32
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
33
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
34
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
35
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
36
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
37
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: Pay Slip
Prepared By: Treasury Office
Number of Copies: 2
38
Frequency of distribution: Pay Period
Purpose: Pay Period
Source Document: DTR, Total Deduction, General Payroll
Name of Report: General Payroll
Prepared By: Treasury Office
Number of Copies: 2
Frequency of distribution: Pay Period
Purpose: Pay Period
Source Document: DTR, Total deduction
Name of Report: Electronic BIR Remittance
Prepared By: Accounting Office
Number of Copies: 3
Frequency of distribution: Cut off period
Purpose: Deduction Remittance
Source Document: Tax deduction
Name of Report: RF-1
Prepared By: Accounting Office
Number of Copies: 3
Frequency of distribution: Cut off period
Purpose: Deduction Remittance
39
Source Document: PhilHealth deduction
Name of Report: Loan Remittance
Prepared By: Accounting Office
Number of Copies: 3
Frequency of distribution: Cut off period
Purpose: Deduction Remittance
Source Document: Loan deduction
Name of Report: GSIS Remittance
Prepared By: Accounting Office
Number of Copies: 3
Frequency of distribution: Cut off period
Purpose: Deduction Remittance
Source Document: Loan deduction
Name of Report: Pag-ibig Remittance
Prepared By: Accounting Office
Number of Copies: 3
Frequency of distribution: Cut off period
Purpose: Deduction Remittance
Source Document: Pag-ibig deduction
40
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
41
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.
42
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 cut-
off 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
employees with job order is based on the mayor’s 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.
44
5.2 System Objectives
The proposed Network-based Payroll System for Noveleta Municipal Office has the
following objectives:
1. To computerize the municipal’s 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.
45
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.
46
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 can’t 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
477
need to get inputs or information personally from another office. They access information
through the system.
48
CHAPTER 6
System Design
6.1 Inputs
Name of Document: Employee Information
Origin: HRMO
No. of Copies: 1
Purpose: for the information that will be used for the payroll system
Name of Document: Time in / Time out
Origin: Employee
No. of Copies: 1
Purpose: For recording time in and out of the Employee
Name of Document: Allowance Amount
Origin: ALLOWANCEGRANTS Table
No. of Copies: 1
Purpose: For additional compensation on the payroll computation
Name of Document: Loan Monthly Amortization
Origin: LOAN Table
No. of Copies: 1
Purpose: For deduction computation
Name of Document: Base Tax and Percent Over
Origin: TAX Table
No. of Copies: 1
Purpose: For deduction computation
Name of Document: GSIS share Percent
Origin: GSIS Table
No. of Copies: 1
Purpose: For deduction computation
Name of Document: PAG-IBIG Amount
Origin: PAGIBIG Table
No. of Copies: 1
Purpose: For deduction computation
Name of Document: PHILHEALTH Contribution
Origin: PHILHEALTH Table
No. of Copies: 1
Purpose: For deduction computation
50
Name of Document: Leave Inclusive Dates
Origin: LEAVE Table
No. of Copies: 1
Purpose: For computation of total hours worked
Name of Document: Rendered Hours
Origin: DTR Table
No. of Copies: 1
Purpose: For computation of total hours worked
Name of Document: Monthly Rate
Origin: EMPLOYEE Table
No. of Copies: 1
Purpose: For payroll computation
Name of Document: No. of dependent
Origin: DEPENDENT Table
No. of Copies: 1
Purpose: For Deduction
51
6.2 Processes
6.2.1 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
52
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
53
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
54
6.2.8 Generate Report
Begin
Generate Remittance, Pay slip, Payroll
End
6.3 Files
Filename: EMPLOYEE
Data needed: Employee ID BIGINT
Last Name VARCHAR
First Name VARCHAR
Middle Name VARCHAR
Date of Birth DATETIME
Sex VARCHAR
Civil status VARCHAR
Address VARCHAR
Phone CHAR
Cell phone No CHAR
Position VARCHAR
Monthly Rate MONEY
Employee type VARCHAR
55
Filename: EJO
Data needed: Place VARCHAR
Date DATETIME
CTC No. VARCHAR
Filename: REGULAR
Data needed: PAGIBIG no. VARCHAR
ID NO. VARCHAR
TIN VARCHAR
GSIS No. VARCHAR
PHILHEALTH No. VARCHAR
Leave Points FLOAT
Filename: DTR
Data needed: DTRID BIGINT
Time In DATETIME
Time Out DATETIME
Date DATETIME
Status VARCHAR
Rendered hours FLOAT
56 46
Filename: ALLOWANCE GRANTS
Data needed: Description VARCHAR
Amount MONEY
Allowance Type VARCHAR
Filename: LEAVE
Data needed: Leave ID BIGINT
Date of Filing DATETIME
Type VARCHAR
Date TO DATETIME
Date From DATETIME
Filename: PHILHEALTH
Data needed: Bracket INT
Range from MONEY
Range to MONEY
Contribution MONEY
Filename: TAX
Data needed: Status VARCHAR
Bracket INT
57
Basic Tax SMALLMONEY
Range MONEY
Percent over FLOAT
Filename: DEDUCTIONS
Data needed: Deduction ID BIGINT
Total Deduction MONEY
Filename: LOAN
Data needed: Loan ID BIGINT
Description VARCHAR
Principal MONEY
Term INT
Interest Rate NCHAR
Monthlyamortization MONEY
Balance MONEY
Start Date DATETIME
Filename: WAGE
Data needed: Net MONEY
Filename: PAYPERIOD
Data needed: Pay ID BIGINT
Basic Salary MONEY
58
Total Hours Worked FLOAT
ADCOM MONEY
Allowance Description VARCHAR
Allowance Amount MONEY
Date From DATETIME
Date To DATETIME
6.4 Outputs
6.4.1 Name of Report: Updated Employee Information
Prepared By: HRMO
No. of Copies: 1
Purpose: show detail information of the employee
Frequency: once
Recipient: HRMO
6.4.3 Name of Report: Pay Slip
Prepared By: Treasury
No. of Copies: 1
Purpose: show the payroll details
Frequency: every 15th day
Recipient: employee
6.4.4 Name of Report: Remittances
59
Prepared By: Treasury
No. of Copies: 1
Purpose: show the total remittances to external entity
Frequency: every 15th day
Recipient: employee
6.4.5 Name of Report: Login Username
Prepared By: HRMO
No. of Copies: 1
Purpose: to be able to manually login to the system according to access level
Frequency: when needed
Recipient: employee
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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: Microsoft XP or higher version
Application: Microsoft SQL, Microsoft Visual Studio 2005, Crystal report
7.1.2 Hardware Requirements
• Finger Print Scanner
• Pentium 4 or higher
• CD – Rom
• Keyboard
• Mouse
• 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.
63
Activity Materials Date User Person/s in
chargePreparation for
training
Computers Oct 13, 2008 HRMO/Treasury Mr. CruzMs. Atog
Ms. MarceInstallation of the
system
Installation CD Oct 14, 2008 HRMO/TreasuryMs. Atog
Demonstration on
how the system
woks
Software
Application
Oct 15-17,
2008
HRMO/Treasury
Ms. Marce
Training proper Software
Application
Oct 20-24,
2008
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
64
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.
65
Acceptance Testing. This is the phase when the system is already complete and ready for
customers’ evaluation. The system’s 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.
66
CHAPTER 8
Conclusion and Recommendation
8.1 Conclusion
The use of the proposed Network-based Payroll System would make the municipal’s
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
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.
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APPENDIX AData Flow Diagram of the Existing System
Context Diagram of the Existing System
0
Noveleta Municipal Payroll System
HRMO
PEF Employee Information
BIR
BIR Tax Remittances
GSIS
GSIS Remittances
Philhealth
Philhealth Remittances
PAG-IBIG
Pag-Ibig Remittances
Loan Remittances
Lending Company
Pay Slip
DTR
Employee
70
Electronic BIR Remittance
Pag-ibig Remittance
RF-1
Remittance
GSIS remittance
Loan remittance
Tax Contribution
GSIS Contribution
Pag-Ibig Contribution
Tax Contribution
Loan Contribution
Level O of Existing System
Employee
PAG-IBIG
GSIS
Philhealth
Gross Pay
6.0
Calculate Net Pay
Total Deductions
7.0
Generate Report
Net Pay
Gross Pay Pay Slip Employee
D3 General Payroll File
General Payroll
HRMO
1.0
Update Employee
Information
Employee Information
PEF
D1 Employee File
Verified Employee
Information
Verified Employee
Information
DTR
2.0
Record Daily Time
D2 DTR File
Recorded DTR
4.0
Compute Gross Pay
5.0
Calculate Deduction
D1 Employee File
Certificate of Tardiness and Absences
Monthly Salary
Gross Pay
BIR
Tardiness Absences
Generate Certificate of
Tardiness/Absence
3.0
Lending Company
GSIS Deductions
Tax deductions
PAG-IBIG deductions
Philhealth deductions
Loan deductions D4 Tax Table
D5 GSIS deduction
D8Pag-Ibig Deduction
D6 Philhealth deduction
D7 Loan File
71
Child of Process 4.0 of Existing System
Certificate of Tardiness and
Absences
4.1
Get no. of Total Tardiness and Absences
Total no. of Tardiness and
Absences
4.2
Check for Available leave
Points
Leave Points
4.3
Deduct Absences and Tardiness
from Equivalent Leave Points
Net of Tardiness and Absences
4.4
Calculate Gross Pay
Gross Pay
Monthly Salary
72
Child of Process 5.0 of Existing System
Tax deductionGross Pay
5.1
Compute W/holding tax
Gross Pay 5.2
Compute PAG-IBIG deduction
Gross Pay5.3
Compute philhealthdeduction
Gross Pay5.4
Compute GSIS
Deduction
Gross Pay5.5
Compute Loan
Deduction
Tax Contribution
PAG-IBIG deduction
PAG-IBIG contribution
5.6
Compute Total
deductions
Philhealth deduction
Philhealth contribution
GSIS deduction
GSIS contribution
Loan deduction
Total Deductions
Loan contribution
Loan deduction
GSIS deduction
Philhealth deduction
PAG-IBIG deduction
Tax deduction
73
APPENDIX BData Flow Diagram of the Proposed System
75
Level 0 of the Proposed System
76
Child Process of 4.0 of the Proposed System
77
Child Process of 6.0 of the Proposed System
78
APPENDIX CEntity Relationship Diagram
Entity Relationship Diagram of the Proposed System
80
APPENDIX DNormalization
82
83
84
APPENDIX EScreen Shots
DTR Module
Salary Computation Module
86
Employee Maintenance Module
Regular Employee Maintenance Module
87
EJO/Casual Employee Maintenance Module
Allowance Modules
88
Tax Table Module
Tax Table Module with Maintenance
89
BIBLIOGRAPHYBooks
[KEND04] Kendall and Kendall (2004). System Analysis and Design 5th
Edition. Prentice-Hall Inc.
[HOFF02] J. Hoffer, et al (2002) Modern Database Management 6th Edition . Prentice Hall.
Theses[REYE00] Reyes, JBC Engineering Specialists’ Payroll System, 2000
[ALAR01] J. Alarcon and B. Guerrero, Cely Rosa Bus Company Payroll System, 2001
[DAYR07] K. Dayrit and A. Wong, Ahnex Builders Network-based Payroll System, 2007
[AVEN07] A. Aventino, M. Lardizabal and V. Natividad, Municipal Office of Gen. Trias Network-based Payroll System, 2007
[CANT08] A. Cantina, C Ramirez and J. Reaño, Network-based Payroll System for M.C. Trading and Gen. Mercahndise, 2008
[JAMO08] J. Jamolin, J. Mataro and L. Torella, Mark James Hospital Payroll System with Biometrics Timekeeping, 2008
Internet http://en.wikipedia.org/wiki/Entity-relationship_model, 2008
http://en.wikipedia.org/wiki/Computer_network, 2008