Add and edit pay items and allowances

Adding or Adjusting pay items and allowances in your platform

When you are building a new Award in your platform, these are the relevant steps:

  1. Add a new Award or Agreements
  2. Add rate Labels and settings
  3. Add Classifications
  4. Add and edit Pay Items and Allowances (we will cover this article)
  5. Position Groups
  6. Rates Book

Some examples of pay items include:

  • Work Cover
  • Bonus / Commission / Short Term Incentive Payment (this includes the option to select your desired tax calculation method).

Some examples of allowances include:

  • Car 
  • Transport
  • Laundry
  • Meals
  • Travel
  • Other

  Please note: How pay items or allowances are set up can impact your End of Financial year (EOFY) reporting and how it is reported to the ATO via Single Touch Payroll (STP).

To view or edit an existing pay item/allowance
  1.  In the quick menu select the hamburger icon to navigate to the full menu > select Awards & Agreements.
  2. Select the Pay Items/Allowance button, this will display the Pay Item and Allowance Library.
  3. The search function will show you results from each tab you are in. Or you can select the Pay Items or Allowance buttons to view the details.
  4.  To edit an Allowance you can select the Edit button, make the desired changes and save.
 To add a new pay item/allowance
    • Select Type: Pay Item or Allowance or Workcover. The type will affect how items filter through to reporting
    • Title: This will be visible to Admins and Employees Portal, the label chosen will appear on payslips e.g. Travel, Laundry.
    • Valid in: Select the State the pay item/allowance is valid in. Select Australia (NAT) if it's the same across all states. You may need to create separate items for specific states.
    • Interval: Select the pay item/allowance interval depending on your item type: hour, day (per shift), weekly, hour (inputted by employee), km (inputted by employee).
    • Accrual Allowance: Should the pay item/allowance accrue? Select No if the pay item/allowance will be paid to employees.
    • Are you required to withhold tax: Yes or No.
    • If you select Yes to withholding tax for the pay item, you'll then be prompted to select your desired Tax calculation method.
      • The methods available:
        • Marginal Tax (Default)
        • Method A applies to back payments, bonuses or similar lump sum payments irrespective of financial year. The additional payment is apportioned over specified periods, applying the averaged amount to the current gross earnings.
        • Method B (i)  applies to back payments relating to a specific period within the current financial year. The PAYG shortfall from tax previously withheld will be calculated based on the current tax tables for the specified period to which the back payment applies.
        • Method B (ii) applies to back payments relating to a prior financial year or additional lump sum payments regardless of financial year. This method averages all additional payments applied within the financial year across the number of annual pay periods and applies it to the average total earnings.
      • For more information on each method please see the Australian Tax Office (ATO)'s Schedule 5 End of Financial Year Reporting & Payment Summaries:
    •  Is the allowance reported through STP? If so how should it be submitted?
      • This option is really important for End of Financial Year reporting purposes and does impact how the items are reported via Single Touch Payroll to the Australian Tax Office.
      • If for example you have an allowance that is being included in the gross when it should be listed as a separate item (or vice-versa) this is where you can make the relevant adjustment.
      • Optional- you can also select if you do not want the allowance to automatically appear as a line item/ pay item on the payslip. 
        • The options which are available for selection are:
          • No- this will not be report through through Single Touch Payroll (STP).
          • Yes (include total allowance in Gross Payment).
          • Yes (show total allowance separately in an allowance box with explanation).
            • If you select this option you'll also be prompted for:
            • Select the Allowance type, where you can choose from a predefined listed of categories from the ATO:
              • Car 
              • Transport
              • Laundry
              • Meals
              • Travel
              • Other- which is for all other allowance that do not fit into the above categories.
          • Lump Sum A Redundancy.
          • Lump Sum A Termination.
          • Lump Sum B.
          • Lump Sum D.
          • Lump Sum E.
    • Super Guarantee - does it apply? 
    • Variable - Workers’ Compensation, Payroll tax, Superannuation and/or Public liability. Variables are important for reporting purposes.
    • Specific Operations (optional)- select which Operations (clients or venues) for this allowance to be available. Or leave blank if applies to all.
    • Apply to Positions (optional)- select which positions you would like this allowance to be available to, or leave blank if applies to all.
      • Please note you'll need to select an Award if you don't select a specific Operation or apply to positions. Then you'll need to add the positions.
        • You don't need to add an Operation unless the allowance applies to only specific operations.
      • Tip: To have allowances pull through automatically for employees, you'll need to add the applicable positions in this field (otherwise it won't pull through).
    • Minimum hours - Does the allowance only apply after a specific number of hours?
    • Label (e.g. Travel Allowance) and amount ($) - the rate will not be saved if you do not enter a Label. The label is what will appear when selecting pay items in the payslip.
    • Select the hamburger icon to open the full menu and select Awards & Agreements > Pay Items/Allowances button select the Add. 
  • Ensure to Save.



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