ASSESSEMENT COVERSHEET Unit/s AssessedFNSPAY501 Process Salary Packaging Arrangements and Additional Allowances in Payroll FNSPAY502 Process Superannuation Payments in PayrollAssessment NameFNSPAY501 + FNSPAY502Assignment Type of Assessment This summative assessment will enable your assessor to make a judgement of competency based on the submission of your completed assessments against the requirements of the unit/s of competency in this module. Benchmark The Assessment Benchmark developed for each unit of competency is the evidence criteria used to judge the quality of performance (i.e. the assessment decision-making rules). Assessors use these benchmarks to make judgements on whether competency has been achieved and to determine if you have performed to the standard expected to meet the unit requirements. Reasonable Adjustment Where appropriate Monarch Institute will allow flexibility in the way in which each unit is assessed based on the needs of an individual. Assessment Coding Assessment of this course is based on competency-based principles. S = Satisfactory NS = Not Satisfactory If you fail to perform satisfactorily for the assessment in the prescribed way you may be assessed as ‘Not Satisfactory’. You are required to be assessed as ‘Satisfactory’ in all assessments for each unit of competency. Re-assessment Your assessment can be submitted after you have reviewed the learning materials and practiced enough to feel confident in your resubmission. You have two weeks from your last submission feedback to resubmit. You are re-assessed in only the areas where your assessor has indicated you were initially assessed as NS. It is at the assessor’s discretion to re-assess the entire assessment should an overall understanding not be demonstrated. When you are re-assessed as ‘satisfactory’ after re-submission you will achieve competency for this assessment. Declaration of Understanding and Authenticity I acknowledge the assessment process has been explained and agree that I am ready to undertake assessment. I am aware of where to find the assessor’s feedback for the assessment. I am aware of the appeals process, should the need arise. I also understand I must be assessed as ‘satisfactory’ in all parts of the assessment/s to gain an overall competent result for the unit/s of competency. If I am found to be NS after a second attempt, it is at the assessor ‘s discretion whether I may be permitted one final attempt. I am aware that a ‘not competent’ final outcome means I may incur fees for re-enrolment in the unit/s. I certify that the attached material is my original work. No other person’s work has been used without due acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism. I understand a person found responsible for academic misconduct will be subject to disciplinary action (refer to Student Information Guide). * I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the above student declaration. Student Name*:Date: Submission instructions: Complete the Declaration of Understanding and Authenticity (above).Once you have completed all parts of the assessment login to the Monarch Learning Management System (LMS) to submit your assessment.In the LMS, click on the link to ‘Submit [assessment name]’ in your course and upload your assessment files. Click save and then click submit assignmentPlease be sure to click ‘continue’ after clicking ‘submit assignment’. Assessment Activities Short Answer and Scenario questions Activity instructions to candidates This is an open book assessment activity.You are required to read this assessment and answer all questions that follow.Please type your answers in the spaces provided.Please ensure you have read “Important assessment information” at the front of this assessmentEstimated time for completion of this assessment activity: approximately 3-4 hours Activity instructions to candidates….continued Textbooks: The following questions are based on the materials in the Digital Edition textbooks: “Process Salary Packaging Arrangements” 1st Edition, July 2018; and “Process Superannuation Payments in Payroll” 1st Edition, July 2018. These textbooks are provided chapter-by-chapter in your LMS as Digital Editions. Online Payroll Software – “Learn Now Practice Payroll System” (KeyPay): For some of the following questions you will be required to use the “Learn Now Practice Payroll System” (KeyPay online payroll software) together with the specific payroll file located in the ‘Your Businesses’ list. The required payroll file has already been created for you, however you will need to create some Pay and Deduction Categories, perform a pay run and print certain documents. This may require you to learn how to use the KeyPay software by making reference to online help provided within the KeyPay software. Many students find KeyPay user friendly and reasonably intuitive. You will be advised in the relevant question(s), if and when you need to make use of the “Learn Now Practice Payroll System”. Use of the free trial version of KeyPay payroll software using the KeyPay public website was previously covered in your Module 1.1 BSBFIM502 Assignment for digital edition textbook. For this assignment you will be using “Learn Now Practice Payroll System”. You also used it in the exercises within your digital edition textbook at Module 3.3 FNSPAY501 titled: “Chapter 3 – Process Salary Packaging Arrangements in Payroll System”, specifically in chapter 3.2. Important: Please be sure to use the “Learn Now Practice Payroll System” (KeyPay online payroll software; this is not the public free trial used in Module 1.1 of your Diploma). This required system is accessed by using the following new web address: https://learnnow.yourpayroll.com.au/ Your special login credentials for access to “Learn Now Practice Payroll System” should have already been provided to you by LearnNow. If you have not yet received these credentials please contact Monarch Institute and request these. Section One Little Pear Administration Pty Ltd offers flexible remuneration plans through salary packaging to certain employees. Little Pear Administration Pty Ltd is not considered a concessional employer. In your position as a Payroll Officer, you are required to calculate the benefits and costs associated with planned salary packaging arrangements. Refer to the (use this link) Little Pear Group Salary Packaging Policy to help you to answer the following questions. Section 1 – Question 1 Erick Hamilton, a management-level employee, wants to renew his Salary Sacrifice Agreement with Little Pear for the period 1 April 2019 through 31 March 2020. Employment Contract (Extract): Date of commencement 1 April 2017 Gross salary per annum $150,000 The gross salary is the earnings base used to calculate the compulsory 9.5% superannuation contributions paid by Little Pear Administration Pty Ltd. Salary Sacrifice Agreement: Novated Lease Agreement Refer to the novation agreement. Expense Payment Benefit Mortgage repayments of $18,000 p.a. on private home Exempt Fringe Benefits Laptop valued at $3,000 net of GST (Primarily business use; GST is payable by the employer and can claim GST credits on this expense). Payment of mobile phone plan costs $1,200 net of GST per annum (No private use declaration signed. Assume GST is payable by the employer and can claim GST credits on this expense.) Other Salary Package Amounts Additional superannuation contributions of $10,000 NOVATION AGREEMENT This NOVATION AGREEMENT is made on 12/March/2019 BETWEEN the “Financier”, the “Employer” AND the “Employee” DETAILS The Employee has entered into the Lease Agreement with the Financier for the Motor Vehicle valued at $50,000. The Employee is employed by the Employer. The Parties have agreed to novate the Lease Agreement as set out in this Agreement. AGREEMENT On the Effective Date the Employee novates to the Employer the Lease Agreement to the extent of the Lease Rights and Obligations. The Employer accepts the novation. Under this agreement the finance lease is rescinded and the employee’s obligation to pay the lease rentals to the finance company is transferred to the employer for the term of the novation agreement. The employer then makes all subsequent lease payments of $17,500 (net of GST per annum) directly to the finance company. The lease payments will be charged against the employee’s remuneration package on a salary sacrifice basis. The employer will pay FBT attributable to the vehicle. The FBT cost will be charged to the employee’s remuneration package on a salary sacrifice basis. The obligation to pay the running costs remain with the employee. The employer, as lessee of the motor vehicle, provides it to the employee as a car fringe benefit for 70% private usage until the novation is terminated. The Employee and Employer may mutually agree to terminate the Novated Lease. In the event of termination, the employee accepts the lease obligations. EFFECTIVE DATE 1/04/2019 a) The required documentation has not been kept to allow the company to use the operating cost method to determine the taxable value of the car fringe benefit. Therefore, the statutory formula method must be used. Required: Use the statutory formula method to calculate the FBT payable in respect of the novated lease. (Where applicable show your workings). Base Value50,000Statutory Rate0.2Private Use %70%Taxable Value7000Gross up Rate2.0802Grossed up Value47%FBT payable6843.85 b) Calculate the FBT payable by the company in respect of Erick’s salary packaging arrangement by completing the table below. Type of BenefitBenefit ValueTaxable Value for FBT (if applicable)Gross up rateGrossed Up value (if applicable)FBT 47%Novated Lease5000070002.080214561.46843.85Mortgage Expense18000180001.886833962.415962.32Laptop3000NAMobile phone plan1200NASuperannuation contributions10000NATotal82,2002500048523.822806.17 c) Evaluate the impact of the Salary Sacrifice Agreement on the employee’s gross salary per annum under the following scenarios: No salary sacrifice ($150,000 Gross salary plus super)Salary Sacrifice Agreement as detailed above Include any Low and Middle Income Tax Offset (LMITO). Refer to the Little Pear Group Salary Packaging Policy to learn about the FBT treatment. i. Help Erick to compare the two options by completing the below table.
