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Hi sir, what is the difference between a salary and wage ? If we use wages as a substitute for salary in the exam, will we be penalised ?
For december 2011 exam question 1(b), i don’t understand one procedure in the answer key.
-Agree the year end tax liabilities to the payroll records and subsequent payment to the post year end cash book
What has tax liabilities got to do with payroll records ? Could you explain sir ?
Wage = usually weekly and depending on hours worked, so often based on time records (like clock cards).
Salary = usually monthly and fixed. Occasional bonus payments.
Many audit procedures are the sane for each (eg leavers and joiners), but some are different (eg ensuring time worked is recorded properly).
The tax liability being talked about is the income tax liability. In most tax systems employers deduct income tax from employees’ pay and pay it directly to the tax authorities.
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