Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What type of payroll data refers to variable earnings such as bonuses and overtime?

1. Standing payroll data

2. Inputs to a payroll system

3. Variable payroll data

4. Outputs from a payroll system

The correct answer is: Variable payroll data

Variable payroll data specifically refers to earnings that fluctuate based on the number of hours worked or performance-related factors, such as bonuses and overtime pay. This type of data is distinguished from fixed payroll components, which remain constant regardless of work hours or performance, such as base salaries. In the context of payroll processing, variable payroll data is computed each pay period and is crucial for accurately calculating employees' total compensation. Understanding this distinction is essential for managing employee remuneration effectively and ensuring compliance with labor laws. Standing payroll data refers to more permanent employee information, inputs to a payroll system consist of the data entered for processing payments, and outputs from a payroll system are the results generated after processing, such as payslips or payroll summaries. These options focus on different aspects of payroll data management, reinforcing the concept that variable payroll data encompasses elements like bonuses and overtime specifically.