GRADUATION THESIS Topic Accounting for Payroll And Payroll Deductions At Thien Ung Services Training Company Limited

Overview of Thien Ung Service Traning Company Limited 2.1.1 Establishment and development of Thien Ung training service accounting company 2.1.2 The main activities and the organization

MINISTRY OF FINANCE

ACADEMY OF FINANCE -

Thien Ung Services Training Company Limited

Major: English for Finance and Accounting

Student code: 165D2202010048

Supervisor: MSC Cao Phuong Thao

Ha Noi - 2020 RESEARCH PROPOSAL DETAILED OUTLINE

1.Rationale of the study

2.Aims of the study

3.Scope of the study

4.Methodology of the study

5.Organization of the study

CHAPTER 1: LITERATURE REVIEW

1.1 Overview of payroll and the payroll deduction

1.1.2.3 Other forms of payment

1.2 Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll and payroll deductions

1.2.2 Accounting for payroll

1.3.4 General journal voucher

1.4 Factor influencing accounting for salary and salary deductions

1.4.1 Internal factors

1.4.2 External factor

CHAPTER 2: THE STUDY

2.1 Overview of Thien Ung Service Traning Company Limited

2.1.1 Establishment and development of Thien Ung training service accounting company 2.1.2 The main activities and the organization of Thien Ung training service accounting company

2.1.3 The features of accounting system of Thien Ung training service accounting company

2.1.3.1 Organization of the accounting system

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company2.1.3.3 The feature in condition of using accounting software

2.2 The current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited

2.2.1 The features of labor, payroll and payroll deductions at Thien Ung training service

accounting company

2.2.2 Payment methods and salary calculating methods

2.2.3 Vouchers and accounts used

2.2.4 Accounting for salaries and bonuses

2.2.5 Accounting for payroll deductions

3.3.1 Improving payroll management

3.3.2 Adjusting salary calculation form

3.3.3 Improving training of manager and workers

3.3.4 Improving salary policy

3.2.5 Using reasonable bonuses policy

CONCLUSIONS

REFERENCES

APPENDIXES

ACKNOWLEDGEMENT

Firstly, I would like to express sincere thanks to Academy of Finance (AOF) for giving

me opportunity to study and research my into educational reality

I do not know how to express my appreciation to Ms Cao Phuong Thao, my supervisor, who gives valuable advice, perceptive comments as well as her enthusiasm supports and careful supervision

I really appreciate all my lecturers at the Academy of Finance for their assistances,

directions and encouragement, it is main factor for me to complete excellently the study

of educational reality

I have furthermore to thank for the help of THIEN UNG SERVICE TRAINING

COMPANY LIMITED and people in the company who give me opportunity to practices

in the company in the pastime

Especially, my friends from Foreign Languages also supported me in my thesis, I would like to thank them for all their support and suggestion I also would like to give my thanks

to my beloved family crating motivation for me to complete my graduation thesis

Finally, because of limitation of time and knowledge, my mistakes are unavoidable, so I wish to have more opportunities I also wish to receive more contribution and suggestion

to get a better project

ABSTRACT

New In the current period, the trend of integration and globalization of the world

economy takes place, enterprises in general are under pressure of competition by other country Therefore, in order to increase the integration process and improve the efficiency

of the production and business activities, businesses need to find effective working

methods The important goal of a business is to maximize profits The profit earned by a business depends on both objective and subjective factors Payroll regime is also an importance factors that company should focus on, so this thesis would make clear this issue

This study is about the regime of wages and bonuses at THIEN UNG SERVICE

TRAINING COMPANY LIMITED First, the main purposes are providing deep

understanding about salaries, bonuses, insurances defines their theories and the important

of paying salary for their employee and the necessary of the payroll accountant Next, it will consider the applications, the achievements and limitations of payroll regime at THIEN UNG SERVICE TRAINING COMPANY LIMITED, as an illustration for the academic background Finally, there are many proposals and solution for the company to improve their payroll accounting regime In conclusion, this study would have a part in improving the regime of payment of salaries, wage, bonuses and insurances at the

company Hopefully, the adjustment could help company get a better payroll regime in the future, and it also would be a great reference for other company

Part I: Introduction

1 Rationale

Labor is the most important input factors of every business Improving labor productivity

is the basic way to improve business efficiency and create reputation of businesses incompetitive market

For enterprises, to survive and develop, they must find ways to improve production andbusiness efficiency Therefore, the management of wages and salary deductions must bepaid attention Other activities will not be effective, or even ineffective if this work willnot be paid enough attention

In today's market economy, labor and salary management organization is an importantcontent in the business management of enterprises, it is one of the most important factorsthat determine quantity and quality of goods and products

Payroll and payroll deductions for the employees always receive great concern because ofits social-economic significance For the employees, these payments are importantbecause they could be their sole incomes, to support their whole families’ lives For everybusiness, it accumulates in the expense account that takes up a great proportion in totalcosts It can be the driving force behind the increase of labor productivity, if it is paidbasing on employee's productivity Therefore, how to construct wage regime and how toselect an appropriate payment form are very necessary Payroll issue is not new, howeverthere are some deficiencies which are need to adjust to get an effective work of payingsalary, wage, bonus and insurance in enterprises As the result, Enterprises could ensurethat, their employee can get suitable salary, thus companies can save cost and increaseprofits

Understanding the paramount importance of the payroll accounting work in enterprises

so in the process of practice as well as completing the subject of graduation, with theenthusiastic advices of my teacher - Ms Cao Phuong Thao and the support of financialaccounting department's personnel, I decide to choose the subject: "Accounting forpayroll and payroll deduction at Thien Ung service training company limited " asgraduation thesis topic

2.Aims of the study

When studying “Accounting for payroll and payroll deduction”, there are three mainobjectives which I want to clarify First, providing basic information to understand theconcept of salary, payroll deductions, bonus and insurance Second, the ways thatenterprise use to made payment for their employee, taking the scenario at Thien UngService Training company limited as a case for study, and reviewing their advantages anddisadvantages Finally, it is to suggest possible solutions to improve the payrollaccounting and the payroll related to insurance at

3.Subjects and Scope of the study

The study provides analysis and reviews the work of payroll accounting and payrolldeduction at Thien Ung training service company limited Research scope: research scopelimited in Thien Ung training service company limited Time study: metrics used mainlyare February 2019

4 Methodology

In order to finish graduation thesis, many methods are applied such as collecting andsynthesizing data, analyzing by tables, diagrams and using mathematical Firstly, Methodsfor collecting and synthesizing data include many ways to collect information and datasupporting graduation thesis For example, I work and contact the financial-accountingdepartment of the Company to collect data about payroll accounting and payrolldeduction in February 2019 of the Company Besides, using many tools to getinformation about the situation of payroll accounting and payroll deduction in Vietnamsuch as: Internet, newspaper, financial news and many colleagues or studying manygraduation theses and many related topics Secondly, Comparison is another method This

is method that used to compare the similarities and differences of an issue In reality,applying this method, I compare between theory and practices about payroll accountingand payroll deductions in the Thien Ung service training company limited, so finding outthe deficiencies of the company Thirdly, using analysis by table and diagrams is anefficient method Finally, I use Mathematical method which using mathematical formulas

to calculate the payments to the employees

Chapter 1: Literature review

Chapter 2: The current situation of accounting payroll and the payroll deduction to

at Thien Ung service training company limited

Chapter 3: Recommendations to improve payroll regime and payroll deduction at Thien Ung service training company limited

Part II: Main content

CHAPTER 1: LITERATURE REVIEW

Contents

1.1 Overview of payroll and the payroll deduction 2

1.1.1 Definitions 2

1.1.1.1 Payroll 2

1.1.1.2 Payroll deduction 2

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions 2

1.1.2 Payment methods 2

1.1.2.1 Job-based salary 2

1.1.2.2 Time-based salary 2

1.1.2.3 Other forms of payment 2

1.2 Accounting for payroll and payroll deductions 2

1.2.1 Definition and role of accounting for payroll and payroll deductions 2

1.2.2 Accounting for payroll 2

1.2.2.1 Vouchers used 3

1.2.2.2 Accounts used 3

1.2.3 Accounting for payroll deductions 3

1.2.3.1 Social insurance 3

1.2.3.2 Health insurance 3

1.2.3.3 Unemployment 3

1.2.3.4 Trade union 3

1.3 Accounting books used 3

1.3.1 General Journal 3

1.3.2 General Ledger 3

1.3.3 Journal voucher 3

1.3.4 General journal voucher 3

1.4 Factor influencing accounting for salary and salary deductions 3

1.4.1 Internal factors 3

1.4.2 External factor 3

2.1 Overview of Thien Ung Service Traning Company Limited 3

2.1.2 The main activities and the organization of Thien Ung training service accounting company 3

2.1.3 The features of accounting system of Thien Ung training service accounting company 3

2.1.3.1 Organization of the accounting system 3

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company 3

2.1.3.3 The feature in condition of using accounting software 3

2.2 The current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited 3

2.2.1 The features of labor, payroll and payroll deductions at Thien Ung training service accounting company 3 2.2.2 Payment methods and salary calculating methods 3

2.2.3 Vouchers and accounts used 3

2.2.4 Accounting for salaries and bonuses 4

2.2.5 Accounting for payroll deductions 4

2.2.5.1 Social insurance 4

2.2.5.2 Health insurance 4

2.2.5.3 Unemployment insurance 4

2.2.5.4 Trade union fees 4

3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien Ung Service Traning Company Limited 4

3.1.1 Advantages 4

3.1.2 Disadvantages 4

3.1.3 Causes 4

3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Traning Company Limited 4

3.3.1 Improving payroll management 4

3.3.2 Adjusting salary calculation form 4

3.3.3 Improving training of manager and workers 4

3.3.4 Improving salary policy 4

3.2.5 Using reasonable bonuses policy 4

1 Rationale 8

2.Aims of the study 9

3.Subjects and Scope of the study 9

4 Methodology 9

5.Organization 10

1.1 Overview of Payroll and Payroll deductions 15

1.1.1 Definitions 15

1.1.1.1 Payroll 15

1.1.1.2 Payroll deductions 16

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions 17

1.1.2 Payroll methods 19

1.1.2.1 Job-base salary 19

1.1.1.2 Time-base salary 20

1.1.2.3 Other form of payroll 22

1.2 Accounting for payroll and payroll deductions 22

1.2.1 Definition and role of accounting for payroll, payroll deductions 22

1.2.2 Accounting for payroll 23

1.2.2.1 Vouchers used 23

1.2.1.2 Accounts used 24

1.2.3 Accounting for Payroll deductions 24

1.2.3.1 Social Insurance 26

1.2.3.2 Health Insurance 26

1.2.3.3 Unemployment Insurance 27

1.2.3.4 Trade union 28

1.3 Accounting books used 29

1.3.1 General journal 29

1.3.2 Journal Ledger 30

1.3.3 Journal Voucher 32

Diagram 3: Diagram of accounting for payroll and payroll deductions recorded in the Journal voucher form 33

1.3.4 General Journal Voucher 33

1.4 Factors influencing Salary and Salary deductions 34

1.4.1 Internal Factors 35

1.4.1.1 Supply demand of labor market 35

1.4.2 External Factors 35

1.4.2.1 Working environment of enterprise 35

1.4.2.2 Employees 36

2.1 Overview of Thien Ung Service Training Company Limited 38

2.1.1 Establishment and development of Thien Ung Training Service Accounitng Company Limited 38

2.1.2 The main activities and the organizations of Thien Ung Training Service Accounting Company

Limited 40

2.1.2.1 The main activities of Thien Ung Training Service Accounting Company Limited 40

2.1.2.2 The organization of the company 41

2.1.3 The features of accounting system of Thien Ung Service Training Company Limited 43

2.1.3.1 The organization of accounting system 43

2.1.3.2 Accounting form, applied accounting policy and reporting system at the company 45

2.1.3.3 The feature in condition of using accounting software 48

2.2 The current situation of accounting for payroll and the payroll deduction at Thien Ung Service Training Company Limited 48

2.2.1 The features of labor, payroll and payroll deduction at Thien Ung Service Training Company Limited 48 2.2.2 Payment methods and salary calculating methods 52

2.2.3 Vouchers and accounts used 54

2.2.4 Accounting for salaries and bonuses 55

2.2.4.1 The policy of accounting for salaries and bonuses 55

2.2.4.2 Accounting procedures 57

2.2.5 Social insurance allowance for employees 80

2.2.5.1 Social Insurance regime 80

2.2.5.2 Social insurance allowance application 81

2.2.6 Accounting for payroll deduction 88

2.2.6.1 Social Insurance 88

2.2.6.1 Unemployment Insurance 88

2.2.6.3 Trade Union 88

2.2.6.4 The calculation payroll deduction at Thien Ung Service Training Company Limited 90

3.1 The evaluation of current situation of accounting for payroll and the payroll deductions at Thien Ung Service Training Company Limited 110

3.1.1 Advantages 110

3.1.2 Disadvantages 111

3.1.3 Causes 112

3.2 Suggestions to improve accounting for salary and salary deductions at Thien Ung Service Training Company Limited 112

3.2.1 Improving a clear allowance and subsidy regime 112

3.2.2 Improving management policy 112

3.2.3 Improving training of manager and workers 112

1.1 Overview of Payroll and Payroll deductions

1.1.1 Definitions

Labor: is the consumption of labor force in reality Labor is purposeful, consciousactivities of people to create products to serve the needs of society life Labor is the mosttypical and creative activity of man

The labor costs definition is the total cost of all labor used in a business It is one of themost substantial operating costs These are particularly important in any business whichexperience heavy human resource labor costs: construction, manufacturing, and otherindustries which have partially or non-automated operations These costs include 2 mainsubcategories The direct labor costs definition is summarized as the cost of labor which isused directly to make products Meanwhile, the indirect labor costs definition is simplyexplained as the cost of labor which is used to support or make direct labor more efficient.Whenever a worker activity takes place, the enterprise must pay for all kinds of materials,attrition of tools and tools for production process and money paid to laborers Labor costsare one of the three cost factors that make up the value of products made by businesses.High or low labor costs affect product costs Therefore, in order to manage productioncosts well, firstly, it is necessary to strictly control labor expenses and to manage wagesfrom two basic criteria: quantity and quality of labor

1.1.1.1 Payroll

Payroll is the total of all compensation a business must pay to its employees for a setperiod of time or on a given date It is usually managed by the accounting or humanresources department of a business; small-business payrolls may be handled directly bythe owner or an associate Increasingly, payroll is outsourced to specialized firms thathandle paycheck processing, employee benefits and insurance, and accounting tasks such

as tax withholding

Laborers, after using their labor power to create products, shall be paid a certainamount of wages On the other hand, we see that labor is exchanged for wages So laborcan be considered a commodity, a special commodity And wages are the prices of thosespecial goods, labor goods Because goods of labor need to be exchanged on the labormarket on the basis of an agreement between the buyer and the seller, affected by the law

of value, the law of supply and demand Therefore, labor prices will vary according to theprice of the constituent elements as well as the supply-demand relation of labor Thus,when considering wages as the value of labor, this price will form based on an agreementbetween the employee and the employer Payroll may increase or decrease depending onthe supply and demand of labor goods Thus, the price of wages often fluctuates but itmust revolve around the value of labor power, as other common goods, it requires exactly

of its value On the other hand, the fluctuations in payroll must ensure the minimum livingstandards so that workers can survive and continue working

1.1.1.2 Payroll deductions

Payroll deductions are amounts withheld from an employee's payroll check, and theseamounts are withheld by their employer Among these deductions are insurance pensioncontributions, wage assignments, child support payments, taxes, and union and uniformdues Deductions that are mandated are government taxes; however, all other deductedamounts are voluntary

No matter how many hours an employee has worked, payroll deductions must be withheldfrom payroll checks In the event that no deductions are withheld, the employer becomesliable and responsible for any mandated amounts that were supposed to be withheld.When an employee's insurance deductions are not withheld, the employer becomes liable

to pay the deductions or to cancel the employee's insurance policy It is always anemployer's responsibility to make sure any payroll deduction is withheld in a timelymanner

Payroll deductions include:

In addition to the payroll and salary deductions, the company has also built bonus regimefor individuals with achievements in production and business activities Bonuses forstimulating employees in production and business activities include: emulation bonus,reward for improving product quality, saving materials and giving incentives for technicalinnovations, …

1.1.1.3 The roles, tasks and functions of accounting for payroll and payroll deductions

 The role of accounting for payroll and payroll deductions

Payroll accountancy is one of the most essential accounting functions within anorganization that demands unique set of skills for the management of payrolls of thecompany

Good accounting for payroll and payroll deductions helps the personnel management indisciplined manner Also, it creates a basis for enterprises to pay insurance allowancesreasonably

Well organized accounting for payroll and payroll deductions not only helps managesalaries strictly, ensuring paying salaries in accordance with policies, but also is a basisfor calculating the allocation of labor costs and business costs properly

 Tasks

The payroll and payroll deductions tasks include the following basic tasks:

-Organizing to record; reflecting and synthesizing data on the number of employees, time

of labor results; calculating wages and deduction of salary amounts, allocating labor costsaccording to the subjects of labor use

-Instructing and checking accounting staff in production and business departments anddepartments to implement the initial records of labor and wages according to the properregime and methods

-Monitoring the situation of payment of salaries, bonuses and allowances for employees

- Making reports on labor, wages, salary deductions, periodically labor situation analysis,situation of management and spending of salary fund, providing information on wagelabor for the department management in time

Payroll and payroll deductions is not only a noticable topic because it is an importanceexpenditure of the business but also a special concern for employees because this is theirright Moreover, workers use wages to stabilize their daily lives, serving their dailynecessities

- Function of supervising employees: Helping the employer through paying wages,inspecting and monitoring workers who work according to their topics, ensuring thewages paid as effective as possible

- Labor administration function: The function of ensuring the role of the labor coordinator

in a reasonable manner with the fair and satisfactory wage, the employee will voluntarilycarry out the work assigned anywhere or anytime

1.1.2 Payroll methods

1.1.2.1 Job-base salary

Payroll by products based on products implies the payment of wages to employees based

on the quantity and quality of completed work products

Formula

Job - based

Rate perunit

Job – based salary form including:

+ Salary form based on products directly produced by direct labor

Salary paid to employees is calculated directly according to the number of finishedproducts which reach quality standards

+ Salary paid for indirect labor

The salary is paid for indirect labors who have no physical association with the finishedproduct or it’s impractical to trace the costs So, this form still has several limitations However, there is a clear link between the value of the job performed to the company andthe level of pay when applying this form So, it helps encourage employees to workharder and better to improve labor productivity as well as increase their salaries.However, It is complicated to administer and expensive to operate This system is suitable

to direct labors And such a system is most effective in the circumstance where jobs areclearly defined

1.1.1.2 Time-base salary

This is a form of payment for employees based on working time, wage level and wagescale This method is mainly applied to indirect workers, stable jobs or maybe even directworkers without product norms

In the enterprise, the payroll by time is applied to office staff such as administrativeadministration, labor organization, statistics, finance and accounting Time-basedpayment is a form of compensation for employees based on their actual working time,occupations and professional and technical proficiency levels of employees Eachoccupation specific job characteristics that apply different wage levels Professional andtechnical proficiency divided into several wage scales, each salary level has a certainsalary, which is the basis for payment of wages, wages over time can be divided

Time-based salary per month

As salary paid to employees by month, the wage level is calculated

over time is 1 month

Minium wage

x

The actual number

of working days ofemployees in month

The number ofworking days inmonth

Time-based salary per week

Wages are wages for employees based on weekly wage and number of working days in amonth.

Time-based salary per day

Hourly rates can be calculated directly to pay hourly rates or based on daily wage forovertime allowances for employees

1.1.2.3 Other form of payroll

Payroll base on turnover is a form of payment / bonus whose income depends on theturnover achieved according to the sales target and the company's salary / bonus policy.Usually applied to sales staff

Monthly salary

52 weeks

There are many types of salary base on turnover

+ Personal salary and bonus

+ Group salary and bonus

1.2 Accounting for payroll and payroll deductions

1.2.1 Definition and role of accounting for payroll, payroll deductions

 Definition of accounting for payroll, payroll deductions

Accounting for payroll play a vital role in all companies with a staff of employees Both

small and large businesses alike must comply with local, state and federal laws specific topayroll reporting and compliance regulations In essence, payroll accountants act as liaisons that perform financial and reporting activities between a business organization, their employees and the government

Payroll and payroll deductions is not only a notice topic because it is an importance

expenditure of the business but also a special concern for employees because this is their right Workers use wages to stabilize their daily lives, serving their daily necessities

 The roles of accounting for payroll, payroll deductions

Payroll Accountanting and Payroll deductions cover a wide range of tasks that are

essential for timely, accurate and efficient payroll operations abiding by federal, state and local laws Payroll Accountants and payroll deducitons need to have a comprehensive understanding of fundamental tasks, such as paycheck calculations, taxation principles, preparing ledgers and journals, transfers and journal entries and deposits Their main role

is responsible for appropriate disbursement of funds, maintaining and updating employee leave balance information

1.2.2 Accounting for payroll

1.2.2.1 Vouchers used

Vouchers used in accounting for payroll and payroll deductions are made for the purpose

of monitoring the use of working time, payables for employees in enterprises such as salaries, wages, allowances, bonuses, working-trip allowances, overtime pay, payables forother organizations and some other content related to wages or labor

The accounting vouchers consist of:

- Form 01a – LDTL – Timesheet: is a method for recording the amount of a worker's timespent on each job by month or by week

- Form 02 – LDTL – Timesheet for overtime

- Form 03 – LDTL – Wage payment table: Each production group, each management department creates a wage payment table, which lists the names and the paid wage

amounts of each person in the group

- Form 04 – LDTL – Bonus payment table: This table is made for each production group, each department, business division these payment tables are the basis for payment and deduction of other amounts such as social insurance, health insurance for workers

- Form 06 – LDTL – Overtime pay table

- Form 08 – LDTL – Exchange contract: This form is a contract signed between the employer and a person about the workload, working time, responsibilities and interests of each party when performing that job When the job is done, then the end of contract It is also a basis for paying wages to the contractor

1.2.1.2 Accounts used

Account 334: payable to employees

334: Account 334: payable to employees

This account is used to reflect the amount of money and the situation of the amount of payments payable to the personnel of enterprises about salaries, wages, bonuses, and otheramounts which belongs to the personnel's income In enterprises this account is also used

to reflect the wages to pay for outsourced employees

The structure and the content of reflection of the account 334

Debit Account 334 Credit

- Deductions of salaries and wages from the

employees’ salaries

- Salaries, wages, bonuses, social insurance

and other amounts which have been paid or

advanced to employees

- Amounts payable to employees such as salaries, wages, bonuses and social insurance

Debit balance (if any) shows overpay for

Form no 10-LDTL: The list remitted wages

Form no 11-LDTL: Allocation table wages and social insurance

 Accounts used

Account 338: "payable and submitted": used to reflect the amounts payable and

submitted to legal authorities, organizations, social associations, for superior about theexpenses of union, social insurance, health insurance, payroll deductions according to the decision of court (the money raising child upon divorce, legal costs, etc.) the value

of excess asset waiting to process, short-term bet, encash for someone, keeping moneyfor someone

1.2.3.1Social Insurance

Social Insurance expense means that expense employers and employees pay to the

government so that people receive money when they are not able to work because of age, illness, etc.:

Under the current regime, social insurance is calculated that the rate of 25.5% of the total wage must be paid to employees in each period

In which:

- Employers must bear 17.5% of the total wage or salary included in production expenses

- Employees must bear 8% of the total salary by deduction into their salaries

Account 3383 – Social insurance: reflecting accruement and payment of social insurance

at units

1.2.3.2 Health Insurance

Health insurance expense is the expense incurred by a business to pay for its portion of

the medical insurance of its employees If the expense relates to employees in the selling and administrative area, the expense is charged in that portion of the income statement If

- Amounts of Social Insurance fees paid

to manage fund agencies of social

insurance

- Appropriating Social Insurance feesinto operating expenses or salaries ofemployees;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages and other amounts payable to employees.

the expense is instead related to employees in the production area, the expense is charged

to the cost of goods sold

Health insurance expense is 4.5% of the total wage payable to employees, in which:

- Employers must bear 3% and be included in production and business costs

- Employees must pay 1.5% by deducting from their salaries

Account 3384 – Health insurance: reflecting accruement and payment of health insurance

by units

1.2.3.3 Unemployment Insurance

Unemployment insurance expenses is the amount of money businesses must pay

employees when they suffer lost a job Under the current regulations, unemploymentinsurance is 2% of the total salary payable for each accounting period, in which theemployer pays 1%, which is included in the production and business costs, the employeesbear 1% by deducting their salaries

Account 3386 – Unemployment insurance: reflecting accruement and payment of

unemployment insurance by units

- Amounts of Health Insurance fees

paid to manage fund agencies of social

insurance

- Appropriating Health Insurance feesinto operating expenses or salaries ofemployees;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages and other amounts payable to employees.

1.2.3.4 Trade union

Trade union fees

A trade union is an organization that has been formed by workers in order to represent their rights and interests to their employers, for example in order to improve working conditions or wages Therefore, Trade union fees is a grant fund for union activities at all levels

- According to the current regulations, that fees is deducted at the rate of 2% of the total amount

- Salary must be paid for each accounting period and included in the business and production expenses, including 1% for the grassroots trade union and 1% for the upper union

Account 3382 – Trade union fees: reflecting accruement and payment of trade union fees

by units

- Amounts of unemployment Insurance

fees paid to manage fund agencies of

1.3 Accounting books used

1.3.1 General journal

A Journal entry is the first step of the accounting or book-keeping process In this step, allthe accounting transactions are recorded in general journal in a chronological order The general journal is maintained essentially on the concept of double entry system of

accounting, where each transaction affects at least two accounts

Other names used for general journal are “journal book” and “book of original entry”.The process of making a journal entry

The first step in the process of preparing a journal entry is to analyze the accounts

involved in a business transaction and then apply the rules of debit and credit 1based on the type of each account After identifying the accounts involved in the transaction and deciding upon the applicable rules, the journal entry is recorded in the general journal in aspecified format which includes the following details:

1 Date of transaction

2 Ledger accounts involved

3 Amount of transaction

- Trade union fees disbursed at units;

- Amounts of trade union fees paid to

manage fund agencies of trade union

fees

- Appropriating trade union fees intooperating expenses or salaries ofemployees;

- Overspending trade union fees whichare granted additionally;

Debit balance (if any) shows overpay

for employees.

Credit balance shows salaries, wages

and other amounts payable to employees.

4 A brief narration to describe the transaction

Diagram 1: Diagram of accounting payroll and payroll deductions recorded in the

general journal form

Record dailyRecord at the end of the month or periodicallyReconciliation and Examination

1.3.2 Journal Ledger Journal – Ledger is a bookkeeping form in which arising economic transactions are combined and recorded in chronologic order and according to economic contents (according to accounts) into a single general accounting book which is journal ledger

GENERAL JOURNAL

Special

General detailed reports

General ledger 334, 338

Trial Balance

Financial statements Wage payment table

Accountants or bookkeepers use accounting books such as journal ledger, subsidiary ledgers and base on accounting vouchers or a summary of vouchers in the same type to record these transactions They can make it easy to record, collate and check information and figures frequently However, because there is only a general accounting books

(journal ledger), it makes difficulties for medium and large size enterprises in performing

a division of labor

Diagram 2: Diagram of accounting for payroll and payroll deductions recorded in

the Journal ledger form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

General table of accounting vouchers of the same type.

338

General detailed reports Journal Ledger

Financial statements Wage payment table

Journal voucher

book

334, 338 Journal

Ledger Financial statements

Wage payment table

Diagram 3: Diagram of accounting for payroll and payroll deductions

recorded in the Journal voucher form.

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.3.4 General Journal Voucher

A general journal is the part of the accounting record keeping system in which

transactions are entered The four types of journals include sales, cash receipts, purchases,and cash disbursements

A general ledger is the account used to store and sort the balance sheet and income

statement transactions Accounts included are cash, accounts receivable, investments, inventory, equipment, and land

In other words, a journal voucher makes entries into the general journal, whose

transactions are then used for the preparation of the ledger

Diagram 4: Diagram of accounting for payroll and payroll deductions recorded in

General journal voucher form

Record daily

Record at the end of the month or periodically

Reconciliation and Examination

1.4 Factors influencing Salary and Salary deductions

1.4.1 Internal Factors

1.4.1.1 Supply demand of labor market

When the supply of labor is greater than the demand for labor, the wage tends to decrease,when the supply of labor is smaller than the demand for labor, the wage tends to increase, and when the supply of labor is equal to the labor demand The labor market is in

equilibrium The wage is now a balanced wage, which is broken when the factors

affecting the supply and demand of labor change such as (marginal productivity of labor, prices of goods and services )

When the cost of living changes, due to the change in prices of goods and services, real wages will change Specifically, when the cost of living increases, real wages will

decrease Thus forcing units and businesses to increase nominal wages for workers to ensure stable life for workers, ensuring real wages are not reduced

1.4.2 External Factors

1.4.2.1 Working environment of enterprise

The policies of the business: the policies of wages, allowances, prices applied

thoroughly and appropriately will encourage employees to improve productivity, quality, efficiency, directly increase their income

The financial ability of an enterprise strongly affects wages For businesses with a large amount of capital, the ability to pay salaries for employees will be easy and convenient

On the contrary, if the financial capacity is not stable, the salary of the employee will be very precarious

The rational or unreasonable organizational structure also affects more or less the salary How is the management done, how to arrange the workforce to supervise and propose measures to stimulate the production process As the result, the efficient of production process by good organization structures affects salary regime

1.4.2.2 Employees

Labor qualifications: For highly qualified workers, there will be higher income than lower-level workers because to achieve that level, workers have to spend more power for their work or they have to take part in long-term training in schools or at the enterprise The enterprises are willing to pay high salary for the jobs which require a high level of knowledge and qualifications

In addition, working experience and work time often go hand in hand A person who has many years of experiences will gain a lot of experience, so they will limit the risks that may occur in the job and improve his sense of responsibility before the work to achieve high quality productivity As the results, their salary will be increasing Moreover, the ability of completing of the job is fast or slow, quality assurance or not, affects the wages

of workers immediately

In conclusion, payroll accounting and payroll deductions are affected by both internal andexternal factors, so companies should find a good accounting management

MINISTRY OF FINANCE ACADEMY OF FINANCE -

Thien Ung training service company limited

Major: English for Finance and Accounting

Student code: 165D2202010048

Supervisor: MA Cao Phuong Thao

Ha Noi - 2020 CHAPTER 2 THE STUDY 2.1 Overview of Thien Ung Service Training Company Limited

2.1.1 Establishment and development of Thien Ung Training Service AccounitngCompany Limited

2.1.1.1 The establishment of Thien Ung Training Service Accounting Company LimitedThien Ung Accounting Company was founded in 2013 by Mr Hoang Trung That Withthe desire to help students and those who do not really understand accounting, hecooperate with a number of lecturers who have been chief accountants, accounting expertsand general accounting; all have many years of experience in accounting They createmany interesting lectures, It really get attention from students In addition to teaching andtraining to help students with experience equivalent to 3-4 years of experience, thecompany also associates with a number of companies to give students the opportunity toexperience internships and work at a number of companies

 Reputation is the most important asset of the Company;

 Ethics is the most important quality of its employees;

 Compliance and risk control

 The goal of the company

Support accounting students in the last year to practice at the Company: Instructing tomake internships reports, select topics, provide data, stamp to confirm internships

Create favorable conditions for newly graduated accounting students, accountants to beexposed to practical accounting jobs, improve their professional skills, learn fromexperience from the former chief accountants

Training new accountant with high professional skills, who can master their own tax andfinancial statements

Advice to support and solve problems that businesses are having to deal with accountingbooks and Tax

Supporting business managers and leaders who can manage their business accountingsystem well, whether they are doing right or wrong

Provide free accounting resources with high professional skills for businesses, haveexperience in handling the actual accounting operations that enterprises are facing

2.1.1.2 The development of Thien Ung Training Service Accounting company Limited

After 7 years of establishment, the company has expanded many branches and achievedmany rewards After 7 years of establishment and development, the company hasaffirmed its position in both teaching and accounting fields The company has been one ofthe leading accounting training centers in Vietnam and also one of the most prestigiousaccounting and financial consulting firms in Vietnam Up to now, the company hascollaborated with many other companies and trained thousands of students, all of whomhave leaved great feedback

2.1.2 The main activities and the organizations of Thien Ung Training ServiceAccounting Company Limited

2.1.2.1 The main activities of Thien Ung Training Service Accounting Company Limited

 Accounting Services

If the accounting department of the enterprises doesn’t have more experiences or thecompany is shortage accountant, they will hire external accounting services Thecompany will do all the tasks relating accounting, which consists of reviewing andchecking accounting books, balancing profit and loss, making annual financialstatements for all types of enterprises

 Tax accounting services

Services help to manage tax accounting issues and focus on strategic tax aspects ofthe business Services include:

 Deferred tax validation projects

 Tax basis balance sheet support

 Remediation and restatement assistance

 Financial statement carveout support

 Issue-specific tax accounting consulting, including valuation allowance assessments, business combinations and etc

 Financial reporting services

It helps an organization or business mainly to analyze and evaluate the company’sfinancial performance in the previous financial years as well as how the company

is doing quarter on quarter basis In simpler words, financial reports would providethe organization with an analysis of how the organization has performed in the pastand how it is performing presently

 Teaching service

The company will train all the student from basis accounting knowledges tobecoming a good accountant by many accounting experts, general accountant and

so on

2.1.2.2 The organization of the company

Based on business field, basic mission of a commercial enterprise, the management

system Thien Ung Training Service Company Limited has been organized as the firstchart follows:

Chart 2.1: The organization of Thien Ung Training Service Company

Director

Director is the most powerful people who is responsible for controlling the work andresources of the Company and ensuring the recruitment and retention of the requirednumbers and types of well-motivated, trained and developed staff to ensure that itachieves its mission and objectives Besides, managing director prepares a corporate plan

Head of Sale Department

Head of Sale Department StaffStaff

Vice Director

Vice Director