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NETWORK – BASED PAYROLL SYSTEM

FOR NOVELETA MUNICIPAL OFFICE

An Undergraduate Research Proposal Presented to


The Computer Studies Department
College of Science
De La Salle University–Dasmariñas

In Partial Fulfillment of the Requirements for the


Degree of Bachelor of Science in
Computer Science

Melju Fatima B. Atog


Romel G. Cruz
Joanna Marie R. Marce

October 2008
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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


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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


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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
iv

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
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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.


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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.
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.
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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.
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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.
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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.


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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.
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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.


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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 Operation &


Analysis Maintenance
Validate
requirements

Acceptance
Systems Testing
Design

System
Verify Testing
Program Design
Design
Unit and
Integration
System

Coding
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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.
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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.
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
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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’
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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
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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
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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.
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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.
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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
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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.


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.


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• 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.
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• 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
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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.
22

• 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.


23

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.
24

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).


25

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.
26

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.


27

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.


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.


29
27

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


30
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


31
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


32

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
33

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
34

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
35

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
36

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


37

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
38

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
39

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


40

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


41

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
42

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.


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
44

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.


45

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.


46

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.


47
7

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
48

need to get inputs or information personally from another office. They access information

through the system.


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


50

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


51

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


52

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
53

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


54

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
55

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


56
46

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


57

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
58

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


59

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


60

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
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
62

• 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


63

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.
64

Activity Materials Date User Person/s in


charge
Preparation for Computers Oct 13, 2008 HRMO/Treasury Mr. Cruz
Ms. Atog
training
Ms. Marce
Installation of the Installation CD Oct 14, 2008 HRMO/Treasury
Ms. Atog
system
Demonstration on Software Oct 15-17, HRMO/Treasury
how the system Application 2008 Ms. Marce
woks
Training proper Software Oct 20-24, HRMO/Treasury Mr. Cruz
Application 2008

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


65

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.
66

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.
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
68

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.
APPENDIX A
Data Flow Diagram of the Existing System
70

Context Diagram of the Existing System

HRMO

PEF Employee
Information

BIR Tax
Remittances

BIR 0

GSIS Pay Slip


Remittances
Noveleta Municipal Employee
GSIS
Payroll System
DTR

Philhealth
Remittances Lending
Philhealth
Company
Loan Remittances

Pag-Ibig
Remittances

PAG-IBIG
71

Level O of Existing System


Verified
Employee
Employee
1.0 Information
Information

HRMO D1 Employee File


Update
PEF Employee
Information

Verified
Employee
3.0 Information

D1 Employee File Generate


Certificate of Tardiness Employee
Tardiness/Absence Absences
DTR

Pag-Ibig
Monthly Salary Certificate of Tardiness D8
D2 DTR File Deduction
and Absences 2.0
Pag-Ibig
Recorded Contribution
DTR Record Daily
Time
4.0
Gross Pay 5.0 Loan
Contribution D7 Loan File

Compute
Gross Pay Tax Contribution
Calculate D6 Philhealth deduction
Deduction
GSIS
D5 GSIS deduction
Contribution

Loan Tax Contribution


PAG-IBIG D4 Tax Table
deductions
deductions
Electronic BIR
Gross Pay Remittance BIR
Tax deductions
Pag-ibig
Remittance
PAG-IBIG
Total Deductions
GSIS Deductions RF-1
Philhealth
Philhealth Remittance

6.0 deductions
GSIS remittance
GSIS
Calculate Net
Pay Loan remittance
Net Pay Lending
7.0
Company

Generate
Gross Pay
Report Pay Slip Employee

General Payroll
D3 General Payroll
File
72

Child of Process 4.0 of Existing System

Certificate of 4.1 4.2


Tardiness and
Total no. of
Absences
Tardiness and
Get no. of Absences Check for
Total Tardiness Available leave
and Absences Points

Leave
Points

Monthly
Salary

4.3
4.4 Net of Tardiness
and Absences
Deduct Absences
Gross Pay and Tardiness
Calculate
from Equivalent
Gross Pay
Leave Points
73

Child of Process 5.0 of Existing System

Tax deduction
Gross Pay
5.1

Tax Contribution Tax deduction


Compute W/
holding tax

PAG-IBIG
Gross Pay 5.2 deduction

Compute
PAG-IBIG PAG-IBIG PAG-IBIG
contribution deduction deduction

5.6
Philhealth Total Deductions
Gross Pay
5.3 deduction Compute
Total
Philhealth Compute Philhealth deductions
contribution philhealth deduction
deduction

GSIS
Gross Pay deduction
5.4

GSIS Compute GSIS deduction


contribution GSIS
Deduction

Loan
Gross Pay deduction
5.5

Loan Compute Loan deduction


contribution Loan
Deduction
APPENDIX B
Data Flow Diagram of the Proposed System
75
76

Level 0 of the Proposed System


77

Child Process of 4.0 of the Proposed System


78

Child Process of 6.0 of the Proposed System


APPENDIX C
Entity Relationship Diagram
80

Entity Relationship Diagram of the Proposed System


APPENDIX D
Normalization
82
83
84
APPENDIX E
Screen Shots
86

DTR Module

Salary Computation Module


87

Employee Maintenance Module

Regular Employee Maintenance Module


88

EJO/Casual Employee Maintenance Module

Allowance Modules
89

Tax Table Module

Tax Table Module with Maintenance


BIBLIOGRAPHY
Books
[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