Creating a pay item

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Everything you pay an employee is set up on the Pay Items page. 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.

To create a pay item

From the Configuration tab in payroll, click Pay Items (screen ID: MPPP2210).
To create a new pay item, click the plus icon ().
Complete the Description, Narration, Type and Taxation fields.
This example shows how to set up a back pay taxable allowance, which is treated as an extra pay item for PAYE calculations.
In the Calculation Method tab, select which method you want to use:
- Amount—This is best used for fixed dollar amounts. You can be set it to calculate per pay or at specific intervals. You can choose to represent this amount as Hours, Days, Pieces or Units. If you want to use an amount-based pay item for multiple employees and for different pay groups, leave the Amount and which represents fields should blank.
- Rated—This is best for a pay item that is paid in units using the employee's wage rate. You can also apply a custom rate. For example, you could use the rated method for overtime, which you could set to use the employee's standard rate or a custom rate. For the Units section, you have two options. The Entered option lets you either set a default number of units, or select from Hours, Days, Pieces or Units. The Derived option gets its units from other pay items like 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.
Click the save icon (). The pay item is assigned an ID. You can now add the pay item to an employee's pay details or in an open current pay.

Article ID: 38540

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Creating a pay item