Introduction To Payroll Systems - Qp4

An attachment of earnings order (AEO) is a legal mechanism used by courts to collect unpaid debts from an employee's wages. If an employee is unable or unwilling to pay their debts out of their net pay, the courts can issue an AEO to their employer. This order requires the employer to make deductions from the employee's pay and pay them directly to the courts. Therefore, the statement is true.

This statement is true because deductions can be categorized into two types: statutory and voluntary. Statutory deductions are mandatory deductions that employers are legally required to make from an employee's paycheck, such as taxes and certain benefits contributions. On the other hand, voluntary deductions are deductions that an employee chooses to have taken out of their paycheck, such as retirement contributions or health insurance premiums. Therefore, the statement accurately states that some deductions are statutory and must be made, while others are voluntary.

GAYE stands for "Give as you earn." This suggests that the acronym represents a system or program where individuals contribute or donate money as they earn it.

The correct answer is 9% because it is the rate at which the student loan is payable above the employee earnings threshold. This means that if an employee's earnings exceed the threshold, they will be required to pay 9% of their earnings towards their student loan.

Statutory deductions are mandatory deductions from an employee's salary or wages as required by law. PAYE (Pay As You Earn) is a system used in the United Kingdom to deduct income tax from employees' salaries. Class 1 NI contributions are National Insurance contributions deducted from employees' earnings to fund various social security benefits. Court and Child Support Agencies deductions refer to court-ordered deductions for things like child support payments or fines. Student Loan Deductions are deductions made from an employee's salary to repay their student loan. Trade Unions are not statutory deductions, so they are not included in the answer.

The statement is false because an employee's authority is not required for deductions to recover wages and expenses that were overpaid by mistake. In such cases, an employer has the legal right to make deductions from an employee's wages without their consent, as long as the deduction is reasonable and lawful. However, it is generally good practice for employers to inform and consult with employees before making any deductions.

Student loan deductions can only be made on instructions by HMRC or if there is a Yes in the Student Loan box on the P46. This statement is false because student loan deductions can also be made if the employee has a student loan and the employer receives instructions from the Student Loans Company (SLC) to make deductions. It is not solely dependent on HMRC or the P46 form.

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