Fundamentals of Payroll Accounting
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version
Section I: Administrative Information
  Total hours: 42.0
Credit Value: 3.0
Credit Value Notes: N/A
Effective: Winter 2021
Prerequisites: ACCG16971
Corequisites: N/A
Equivalents: N/A
Pre/Co/Equiv Notes: N/A

Program(s): Business, Business Admin. Accounting
Program Coordinator(s): Georgia Mello, Jennifer Peterson
Course Leader or Contact: Monika Lebrecht
Version: 20210118_00
Status: Approved (APPR)

Section I Notes: N/A

Section II: Course Details

Detailed Description
Students are introduced to payroll preparation practices and procedures and study the applicable government payroll related legislation. This course serves as the basis for more advanced studies in payroll management or for a better understanding of related concepts in the areas of accounting, taxation and human resources. Students learn to identify taxable earnings and benefits, determine statutory and non-statutory deductions, calculate net pay, prepare accounting payroll data and complete the prescribed forms and remittances required to be submitted by employers. Using lectures, demonstrations and problem solving activities, students learn the steps of the payroll cycle that result in accurate payroll solutions for both internal and external stakeholders.

Program Context

Business Program Coordinator(s): Georgia Mello
This course is an optional elective in the Business Diploma program.

Business Admin. Accounting Program Coordinator(s): Jennifer Peterson
This course is an optional elective in the three year Business Administration Accounting program.

Course Critical Performance and Learning Outcomes

  Critical Performance:
By the end of this course, students will demonstrate the ability tocomplete an entire (annual) payroll cycle, in compliance with Canada Revenue Agency's legislation and the requirements of its regulatory bodies.
Learning Outcomes:

To achieve the critical performance, students will have demonstrated the ability to:

  1. Apply provisions of the Employment Standards Act to ensure employers meet minimum requirements, mandated by the Province of Ontario.
  2. Distinguish employment income by evaluating cash earnings, allowances, expenses and fringe benefits.
  3. Calculate statutory deductions (Canada Pension Plan, Employment Insurance & Income Taxes) using both Canada Revenue Agency payroll tables and the on-line calculator.
  4. Identify various non-statutory deductions for the purpose of calculating net pay.
  5. Complete an earnings record, by computing insurable/pensionable earnings and gross/net taxable income.
  6. Prepare government remittances using prescribed forms.
  7. Create a year-end payroll register, to finalize the payroll cycle and report T4 slips and a T4 summary.
  8. Determine Employer Health Tax and Workers Safety & Insurance Board levies, in obligation of Provincial requirements.
  9. Construct payroll accounting journal entries and accruals.
  10. Administer employee terminations, by determining final payments owing and filing a Record of Employment.

Evaluation Plan
Students demonstrate their learning in the following ways:

 Evaluation Plan: IN-CLASS
 In-Class Quizzes (4 x 5%)20.0%
 Assignment 1 (Module 1 & 2)15.0%
 Assignment 2 (Modules 1 to 4)10.0%
 Test 1 (Mid-term)25.0%
 Test 2 (Comprehensive Final)30.0%

Evaluation Notes and Academic Missed Work Procedure:

Provincial Context
The course meets the following Ministry of Colleges and Universities requirements:


Essential Employability Skills
Essential Employability Skills emphasized in the course:

  • Communication Skills - Communicate clearly, concisely and correctly in the written, spoken, visual form that fulfills the purpose and meets the needs of the audience.
  • Communication Skills - Respond to written, spoken, or visual messages in a manner that ensures effective communication.
  • Numeracy - Execute mathematical operations accurately.
  • Critical Thinking & Problem Solving Skills - Use a variety of thinking skills to anticipate and solve problems.
  • Critical Thinking & Problem Solving - Apply a systematic approach to solve problems.
  • Information Management Skills - Analyze, evaluate, and apply relevant information from a variety of sources.
  • Information Management - Locate, select, organize and document information using appropriate technology and information systems.
  • Interpersonal Skills - Show respect for the diverse opinions, values, belief systems, and contributions of others.
  • Interpersonal Skills - Interact with others in groups or teams in ways that contribute to effective working relationships and the achievement of goals.
  • Personal Skills - Manage the use of time and other resources to complete projects.
  • Personal Skills - Take responsibility for one's own actions, decisions, and consequences.

Prior Learning Assessment and Recognition
PLAR Contact (if course is PLAR-eligible) - Office of the Registrar
Students may apply to receive credit by demonstrating achievement of the course learning outcomes through previous relevant work/life experience, service, self-study and training on the job. This course is eligible for challenge through the following method(s):

  • Challenge Exam

Section III: Topical Outline
Some details of this outline may change as a result of circumstances such as weather cancellations, College and student activities, and class timetabling.
Instruction Mode: In-Class
Professor: Multiple Professors
OptionalOtherInstructor to provide mobile computing information available on SLATE.

Applicable student group(s): Business Administration Accounting, Business General
Course Details:

Additional information pertaining to class quizzes, activities,
assignments and tests will be provided in SLATE via the Course

Module 1; Payroll Compliance (Introduction & LO #1)

Lesson 1 - The Payroll Environment

Students are provided with an overview of the payroll function and
the importance of employer compliance. An exploration of relevant
Federal & Provincial Legislation, Regulatory Agencies and
Jurisdiction provides a framework for payroll concepts covered in
the remainder of the course. 

Module 2; Payroll Fundamentals (LO's #2 - 6)

Lesson 2 - Income from Employment

Students begin to differentiate income from employment, including
cash earnings, allowances & expenses and fringe benefits. Taxable
vs. non-taxable income is evaluated and emphasis is put on which
statutory deductions are applicable to various types of taxable

Lesson 3 - Statutory Deductions

Students extend their knowledge, by beginning to calculate Canada
Pension Plan contributions (CPP), Employment Insurance premiums (EI)
& Income Tax withholding's manually, using Payroll Deduction Tables
electronically, using Canada Revenue Agency s On-line Calculator
(PDOC). TD-1 Forms & Worksheets are also explained, providing
insight as to how employers determine how much income tax to
withhold from an employees pay.

Quiz #1 (5%)

Lesson 4 - Non-Statutory Deductions

Students understanding of deductions is further expanded, as
non-statutory deduction are introduced. Both compulsory and
deductions are detailed and exampled, in preparation for a more
comprehensive computation of net pay.   

Lesson 5 - Calculating Net Pay

Students are now in position to apply an important payroll model,
which aids in determining Insurable/Pensionable Earnings and
Gross/Net Taxable Income. Mastering this model, allows for the
seamless and accurate calculation of gross earnings and statutory
deductions. In addition, a structured approach to computing net pay
is demonstrated,by creating employee earnings records.

Quiz #2 (5%)

Assignment #1 (15%)

Mid-term Exam (25%)

Module 3; Year-End Procedures (LO's #6 - 8)

Lesson 6 - Remittances & T-Slips

Students are exposed to Federal Government reporting requirements,
including a PD7A Statement (used for statutory remittances) and
year-end T-slips (T4 & T4 Summary). In conjunction with these
obligations, the significance of the payroll register is sampled, as
a primary source document, utilized for payroll reporting purposes.

Lesson 7 - Other Payroll Levies

Students are introduced to additional Provincially mandated payroll
levies, including Employer Health Tax and the Workers Safety
Insurance Board. General administration and filing of annual returns
are explored.

Quiz #3 (5%)

Module 4; Completing the Payroll Cycle (LO's #8 - 10)

Lessons 8 - Payroll Accounting & Controls

Students conclude the payroll cycle, synthesizing the payroll
function's reliance on the accounting function. By constructing
appropriate journal entries and accruals, expenses and liabilities
are identified, elaborating the concept of employer payroll costs.
As part of the payroll/accounting processes, internal controls are
also discussed, bringing awareness to the risks employers can face,
with regard to payroll fraud.

Lesson 9 - Employee Terminations 

Students learn how to identify an interruption of earnings and the
types of payments owing to employees who experience a loss of
employment. Terminations are evaluated for the purpose of filing a
Record of Employment and Employment Standards Act legislation is
revisited, to ensure minimum requirements are met.

Quiz #4 (5%)

Assignment #2 (10%)

Module 5; Course Overview (LO's #1 - 10)

Lesson 10 - Comprehensive Review

Students continue to practice and apply their knowledge with
comprehensive workshop exercises, in preparation for the final exam.

Comprehensive Final Exam (30%)

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