Creating a pay item

Everything the employee is paid is set up in the pay items screen. This article looks at how to set up a pay item for use in the standard pay details and/or an open current pay for an employee.

From the configuration tab in payroll you will find Pay Items (Screen ID MPPP2210).

To create a new pay item, click on the + and enter the detail into the Description, Narration, Type and Taxation fields.

In this example, we will setup a Back Pay taxable allowance. This is treated as an extra pay item for PAYE calculations.

Calculation Method

Amount

This is best used for fixed dollar amounts and can be set to per Pay or a specific frequency. How this amount is represented can be broken down to Hours, Days, Pieces or Units. To enable an amount based pay item to be used for multiple employee's and in different pay groups, the Amount and representation fields should be left blank.

Rated

This is the type you would use for a pay item that is paid in units that use the employee's wage rate or a custom rate can be applied. The best example of this being used would be overtime and this can be set to the employee's standard rate and the Rate Multiplier used to apply a Time and Half or Double Time amount. The Units can be set to a default number or units in hours, days, pieces or units or can be derived from other pay items such as wages and salary.

Percentage

A percentage of selected pay items can be used per pay or week to determine the value of the pay item when included in a pay. This would be used for a casual employee who should be paid 8% of gross earnings every pay period. The selected items would be set to Income eligible for Holiday Pay.

The Back Pay example we have is set to Amount per pay representing Units as be will be paying the employee's a set amount for this pay item.

Once the setup is saved, a Pay Item ID will be assigned and this can be added to any employee's Pay Details or in an open Current Pay.