Learning Microsoft Excel 2007

By Greg Bowden

Chapter 16

Payroll Systems

Guided Computer Tutorials

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© Greg Bowden

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First published 2007

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 Chapter

16
Payroll Systems
Companies can use Microsoft Excel to keep pay details. In this activity you will
create a company payroll table and pay advice slips for the individual employees.
The data for the payroll system has been prepared for you, your task will be to
complete the formulas.

Loading the Payroll Template

1 Load Microsoft Excel, or close the current file.
2 Click on the OPEN icon in the QUICK ACCESS TOOLBAR or in the OFFICE
BUTTON. Access the CHAPTER 16 folder of the EXCEL 2007 SUPPORT FILES
and load the template:
PAYROLL
Selecting YES to the READ-ONLY dialogue box.
3 There are two worksheets in the template. Look over the PAYROLL sheet
which will show the pay details for all employees. Click on the PAY ADVICE
sheet. It will display the pay details for an individual employee. The
employee would receive the PAY ADVICE printout when they receive their
pay.
4 Save the template in your STORAGE folder under the file name:
Ch16 Evesalon
Remember to turn off the READ-ONLY RECOMMENDED option.

Completing the Payroll Worksheet

The first sheet is the payroll sheet showing the pay details for all the employees of
the company.
1 Ensure that the PAYROLL worksheet is on the screen.
2 Position the cursor at cell G12. We need to calculate the OVERTIME RATE OF
PAY. It is 1.5 times the NORMAL PAY RATE.

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Learning Microsoft Excel 2007

3 In cell G12 enter the

formula:
= E12 * 1.5

4 Autofill the formula

down for the other
employees.

5 The GROSS PAY is the total weekly pay earned by the employee before
deductions are taken out. We need to multiply the NORMAL HOURS by the
NORMAL PAY RATE and the OVERTIME HOURS by the OVERTIME RATE
then add the two results together.

6 Move the cursor to cell

H12 and enter:
= (D12*E12) + (F12*G12)

7 Autofill the formula

down for the other
employees.

NOTE: The brackets in the GROSS PAY formula are not really necessary,
but they help to separate the two calculation sections and make
the formula easier to understand.

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 Payroll Systems 16
8 The SUPERANNUATION is the amount contributed by employees each
week to a retirement fund. It is usually a percentage of the employee’s Gross
Pay. We will use a rate of 5% here.

9 Set the cursor at cell I12 and enter:

= H12 * 5%
then autofill the formula down for
the other employees.

The Tax Calculation

Normally the TAX is calculated through a series of lookups which you did in an
earlier chapter. This could be done at the right of the payroll and set not to print
when the payroll is printed. To make things a little easier we will use a base tax
rate of 25%.

Set the cursor at cell J12 and enter:

= H12 * 25%
then autofill the formula down for
the other employees.

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Learning Microsoft Excel 2007

Calculating the Net Pay

The NET PAY is the GROSS PAY minus the deductions (superannuation and tax),

Set the cursor at cell K12 and enter:

= H12 - I12 - J12
then autofill the formula down for
the other employees.

Printing the Payroll

The print area needs to be checked so that the whole payroll fits on one page and
the ORIENTATION needs to be set to LANDSCAPE.

1 In the PAGE LAYOUT tab of the

RIBBON set the ORIENTATION
icon to LANDSCAPE and the SIZE
icon to your printer’s paper size (it
is probably A4).

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 Payroll Systems 16

2 Highlight the whole payroll (cells

A1 to K17) and set the PRINT
AREA icon in the RIBBON to SET
PRINT AREA.

3 PRINT PREVIEW the table then print a copy and check over it.

The Pay Advice Worksheet

Each pay day the employees are given pay advice sheets with their pay. We can
use Microsoft Excel to create a pay advice sheet that can import values from the
PAYROLL worksheet and print this pay advice sheet for each employee. The
employee CODE is used to link the two sheets together. The CODE consists of the
first three letters of the employee’s surname and the number 50. If two or more
employee’s have the same first three letters in their surname, the first alphabetical
name receives the number 50, the second 51, the third 52, etc.

A Naming the Payroll Cells

It is advantageous to name the PAYROLL table cells so that entering the formulas
in the PAY ADVICE sheet is easier.
1 The PAYROLL sheet should be on the screen.

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Learning Microsoft Excel 2007

2 Highlight cells A12 to K15, click in

the NAME BOX, name the cells:
Payroll
and press <enter> to complete the
name.

B Sorting The Payroll

Before starting the PAY ADVICE sheet it is necessary to ensure that the PAYROLL
table is sorted into CODE order. The lookup formulas will not find the correct
values if the PAYROLL table is not in CODE order.

1 With the cells A12 to K15 still

highlighted, click on the SORT &
FILTER icon in the HOME tab of
the RIBBON and select:
SORT A TO Z.

2 Click on a cell to remove the highlight and the PAYROLL table should be in
CODE order.

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