Payslips
Payslips contain a wealth of information and sometimes your employees may have questions about the calculations on their payslip.
The guide below is split up into 3 key sections:
- Payslip components- this shows you from where payslips data is pulled from your foundU platform.
- Typical payslip example- we then have an example of a typical payslip example and outline how key formulas are used to calculate Gross pay and Total pay.
- And finally we include an example of a more detailed payslip that has an extra step for the calculations as it contains penalty rates, allowances and deductions.
As foundU is an end-to-end platform, the components that go into the Payslip such as personal details, office code (paying entity) etc all pull into the payslip.
Below is an example of a typical payslip and the different components that display.
Below is a list of where this data that appears on the payslip comes from your platform (which is useful for updating purposes).
- Pay is paid fortnightly for all staff under the Operation
- Personal details are pulled through from the Employee App
- Position is pulled through from Employee's profile (a custom position title will display if this has been selected in set up).
- The position is linked to the Pay rate which is located in the relevant Award & Agreement.
- Entitlements set in Employee's profile
- Entitlement shown on payslip, as per settings in Payroll settings.
- Employee salary sacrifice or personal super contributions set in the Employee App
- Office code- Paying entity
- Taxable Gross Pay
- Hours pulled through from:
- Work pattern (Salaried)
- Roster/Approve shifts (Fulltime, Part time, Casual)
- Super Guarantee percentage from Super Settings
Below are the 3 key formulas used in the calculations.
True Gross= Taxable Gross Pay+ non taxable allowances+ taxable allowances + entitlements
- This figure does not display on the payslip, relevant for employees applying for loans (how much people earn actually).
Taxable Gross Pay= True Gross - Non taxable allowances - Gross Deductions - Salary sacrifice
- This figure displays as 'Gross Pay' on the payslip.
Net Pay= Taxable Gross Pay- tax-additional tax-non taxable deductions + non taxable allowances
- This figure displays as 'Total Pay' on the payslip.
Calculating Gross Pay can involve a small amount of calculation, that is why the naming of Allowances and Deductions and including information such pre or post tax can be really helpful.
Below are examples of where you can see these details.
- Allowances (because there are are gross and net ones, as well as taxable and non taxable allowances).
- Tip: Check out the pay item and allowance schedule in your platform to see the set up.
- The details that are in the schedule come from Awards and agreements. Below is an example of the Allowance section
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- Deductions (because there are are gross and net ones, as well as taxable and non taxable deductions).
- Super contributions (there are those that are gross e.g. Salary sacrifice, but there are also those that after net (after tax)).
(See our next section for a Typical Payslip Example, and a Detailed Payslip example in the sections below)
In Fred's example below, he worked 76 hours over the fortnight (and he is paid fortnightly). This is an example of Simple payslip without leave entitlements taken, allowances, deductions or salary sacrifice.
True Gross= Taxable Gross Pay ($1802.49)+ non taxable allowances (0)+taxable allowances+ entitlements (0)+entitlements= $1802.42.
Taxable Gross Pay= True Gross($1802.49)+Non taxable allowances (0)-gross deductions (0)- super salary sacrifice (0)=$1802.49, this is the Gross Pay shown on the payslip.
Total Pay (Net)= $1802.42 (Taxable Gross Pay)-848 (tax)- 0 (additional tax)- non taxable deductions (0) + non taxable allowances (0)= $954.48 this is the Total Pay on the payslip.
Fred now works 40 hours, takes leave and has allowance and deductions.
Below is a more detailed example of Fred's payslip in this example he is a Full time employee and we can see that:
- He has taken annual leave and personal so we'll need to add that in when calculating the gross.
- We'll also need to add in his laundry allowance, as he has a gross (pre tax) allowance, as well as 2 x Meal Allowances (non taxable).
- He has both a gross (pre tax) deduction and a post tax deduction. So we will need to minus out the pre tax Salary packaging for his car.
- He has chosen to do salary sacrificing and nominated an additional tax amount.
Calculating Taxable Gross Pay and True Gross
True Gross= Hours worked+ non taxable allowance + taxable allowance + entitlements
=(753.61+182.33+109.40=1045.34 hours worked)+70 (non taxable allowance) +(184.76+184.76=369.52 entitlements)+3=1487.86
- This figure does not display on the payslip, relevant for employees applying for loans etc.
Taxable Gross Pay= (Total hours worked x pay rate)- non taxable allowance- gross deductions- super salary sacrifice
=1487.76-70 (Non taxable allowance)-25 (Gross deductions)-100 (Salary sacrifice)= $1292.86
Calculating Total Pay (Net)
Net Pay= Taxable Gross Pay- tax - gross deductions+ non taxable allowances
= 1292.86-608 (tax) -10 (Additional tax) - 20 (non taxable deductions) +70 (non taxable allowance)
= $724.86
- This figure displays as 'Total Pay' on the payslip.
