Creating a pay item

There are three types of pay item:

• Income—This applies to a payment if it increases the number of hours an employee works. For example, wages, overtime or salary.
• Allowance—An extra payment owed to an employee in addition to payment for hours worked. For example, commission, bonus, back pay, reimbursement of costs, meal allowance or shift allowance.
• Deduction—An amount withheld from an employee's pay, which is then forwarded to an authority or other organisation. For example, union fees, child support or staff loans.

On the Calculation Method tab, you can choose one of three options for the Method field:

Amount

The Amount method is best for fixed dollar amounts. 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 blank.

Rated

The Rated method is best for a pay item that's paid in units. You can either use the employee's wage rate or a custom rate.

For example, to calculate overtime, you could select Use Employee's Rate, then use the Rate Multiplier field to apply a time-and-a-half or double time amount.

For the Units section, you have two options. The Entered option lets you set a default number of units as Hours, Days, Pieces or Units. The Derived option gets its units from other pay items, like wages and salary.

Percent Of

The Percent Of method lets you select how much of a pay item's value will be included in a pay.

For example, you could use this method for a casual employee who should be paid 8% of gross earnings every pay period.

1. In MYOB Advanced, go to the Pay Items (MPPP2210) screen.
2. On the toolbar, click the plus icon ().
   
3. Complete the Description, Payslip label, 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.
   
   
4. Click the Calculation Method tab.
5. In the Method field, select which calculation method you want to use.
6. On the toolbar, 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 to an open current pay.