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AccountRight Plus and Premier, Australia only

An employee’s pay is made up of separate components, such as normal time, overtime, superannuation, salary sacrifice, PAYG withholding, and so on. In AccountRight, these components are called payroll categories, and they are grouped into six types: wages, superannuation, entitlements, deductions, expenses and taxes.

Payroll categoryDescription
Wages

All monies paid to an employee for labour or services rendered on an hourly, salary or other basis, including allowances.

Superannuation

Superannuation benefits such as superannuation guarantee and salary sacrifice.

Note that any reportable superannuation contributions need be set up as separate superannuation payroll categories. For more information, see  Reportable Employer Super Contributions (RESC) .

Entitlements

Items such as annual and personal leave, which employees accrue under the terms of their work agreement.

Deductions

Amounts withheld by the employer and paid to other organisations on behalf of the employee, for example, union fees.

Expenses

Employer-paid benefits other than superannuation, for example, WorkCover.

Taxes

Amounts withheld by the employer from the employee’s paycheque and paid to a statutory authority, for example, PAYG Withholding paid to the ATO.

A default list of payroll categories is generated when you create your company file. To access the list, go to the Payroll command centre and click Payroll Categories. You may want to review these categories and tailor them to suit your business needs.

If you want to create a new payroll category, see the relevant procedure below.

If you want to edit an existing category, see Editing payroll categories.

 

To create a wage category
  1. Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.

  2. Click the Wages tab.
  3. Click New. The Wages Information window appears.
  4. Type a name for the wage category and make the required selections in the window.

    A
    Choose Hourly for amounts that are paid per-hour, for example, allowances and overtime. Also, if this wage category is linked to an entitlement (such as annual leave), select Hourly.

    If you have allowances or payments that are calculated based on a unit other than hours, such as kilometres, select the Hourly option. Then select the Fixed Hourly Rate pay rate option and enter the rate per unit. When recording pays, you'll need to enter the number of units in the Hours column.

    For payments such as bonuses and commission that aren't based on hours worked, choose Salary. You can enter the amount when recording each employee's pay each period, or on each employee's standard pay in their card.
    BIf you select Hourly as the type of wages, the  Pay Rate  fields appear. Select Regular Rate Multiplied by and enter, for example,  2  for double time or  1.5  for time and a half. This will multiply the employee’s  Hourly Base Pay  (entered in the Payroll Details  tab of their card) by this amount.
    Alternatively, you can enter a fixed hourly rate. This dollar amount per hour will be the same for each employee regardless of their hourly base pay.
    CIf you want to override the employees’ wage expense account (entered in the  Payroll Details tab of their card) for this particular wage, select the Optional Account option and enter the override account in the field that appears.
    D[Hourly wages only] If you want to use this wage category to pay leave entitlements (such as  Personal Leave or  Annual Leave ), select the Automatically Adjust Base Hourly or Base Salary Details  option. When you record leave, base pay amounts will be adjusted for the amount of leave paid.
  5. Click Employee. The Linked Employees window appears.
  6. Select the employees whose pay will include this category, then click OK.
  7. Click Exempt. The Exemptions window appears for the payroll category you are creating.
  8. Select the taxes and deductions that do not apply to the new category.
  9. Click OK.
  10. Click OK to return to the Payroll Category List window.
To create a superannuation category
  1. Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.

  2. Click the Superannuation tab.
  3. Click New. The Superannuation Information window appears.
  4. Type a name for the superannuation category and make the required selections in the window.

    A

    Linked Expense Account is the account to which you charge employer expense superannuation payroll categories (Employer Additional, Productivity Superannuation, Redundancy Superannuation or Superannuation Guarantee). The Default Employer Expense Account you specified when setting up payroll appears as the default.

    We recommend you create an expense account called Superannuation Expense and select it as the linked expense account.

    B

    Linked Payable Account is the liability account to which the superannuation amounts accrue. The Default Tax/Deductions Payable Account you specified when setting up payroll appears as the default.

    We recommend you create a liability account called Superannuation Liability and select it as the linked payable account.

    C

    The Contribution Type may be Employee Additional, Employer Additional, Productivity, Redundancy, Salary Sacrifice, Spouse or Superannuation Guarantee. Select the appropriate type from the list.

    • The Salary Sacrifice (deduction) contribution type is deducted from an employee’s gross pay, that is, before PAYG withholding tax is calculated. It reduces the employee’s gross taxable income.
    • The Employee Additional (deduction) and Spouse (deduction) contribution types are deducted from the employee’s net pay, that is, after PAYG withholding tax is calculated.
    • The Employer Additional (expense), Productivity (expense), Redundancy (expense) and Superannuation Guarantee (expense) contribution types are paid in addition to the employee’s gross pay.
    D If you want the superannuation amount accrued to appear on employees’ pay advice, select the  Print on Pay Advice  option.
    E

    Calculation Basis can be:

    • User-Entered Amount per Pay Period allows you to enter an amount at the time the pay is processed each pay period. Choose this option if the amount varies regularly or if you want to use the amount you have entered in an employee’s standard pay details.
    • Equals x Percent of allows you to enter a percentage of a payroll category (such as wage, deduction or superannuation) or a percentage of all wage categories (by choosing Gross Wages or Federal Wages ). The superannuation will be calculated until the limit is reached.
    • Equals x Dollars per allows you to enter a specified amount per pay period, per hour, per month or per year until the specified limit is reached.
    F

    In the Exclusions field type the amount by which the eligible wage is reduced before the superannuation is calculated. For example, an employee with a gross wage of $1000 per month and an exclusion of $100 will have the superannuation calculated only on $900.

    G

    Superannuation limits can be used to place a ceiling on the superannuation calculation. For example, for an Employee Additional superannuation deduction of $30 per pay period and a limit of 2% of gross wages, a pay with gross wages of $1000 yields superannuation of only $20 (i.e. 2%). Limit can be one of the following three choices:

    • No Limit signifies no limit to the superannuation calculated for this category.
    • Equals x Percent of results in the maximum superannuation calculated being a percentage of wage, deduction or superannuation payroll categories. For example, an Employer Additional superannuation contribution might be $20 per pay period, but this should not exceed a maximum of 20% of the employee’s base salary.
    • Equals x Dollars per results in the maximum superannuation calculated being a fixed amount per pay period, per hour, per month or per year. For example, a Salary Sacrifice superannuation might be 5% of the employee’s gross wages up to $1000 per year.
    HIf this superannuation calculation is only payable if wages exceed a specified amount per month (such as for superannuation guarantee contributions), enter this amount in the Threshold field. For example, if the threshold is $450 per month, then superannuation is not payable until the employee’s gross wage exceeds $450 per month. When determining whether the gross wages on a pay exceeds the threshold per month, other pays issued that month are included. (See Troubleshooting superannuation calculations .)
  5. Click Employee. The Linked Employees window appears.
  6. Select the employees whose pay will include this category, then click OK.
  7. Click Exempt. The Exemptions window appears for the payroll category you are creating.
  8. Select the taxes and deductions that do not apply to the new category.
  9. Click OK and click OK again to return to the Payroll Category List window.
To create an entitlement category

  1. Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.

  2. Click the Entitlements tab.
  3. Click New. The Entitlements Information window appears.
  4. Type a name for the entitlement and make the required selections in the window.

    A

    Calculation Basis can be:

    • User-Entered Amount per Pay Period should be selected if you want to manually enter a specific amount for each employee, each pay period. Choose this option if the amount varies regularly or if you want to use the amount you have entered in an employee’s standard pay details.
    • Equals x Percent of allows you to set the entitlement as a percentage of the number of hours of any wage category. It can only be used with employees who have an Hourly Base Pay (entered in the Payroll Details tab view of their card). For information about the way in which you should determine the percentage rate for calculating annual leave and personal leave accruals, see "Calculating annual and personal leave accruals" below.

      Type the percentage in the first field and then select the wage category from the selection list.

      For example, an annual leave entitlement may be for 20 days per year, being 152 hours per year based on a 38-hour week. Every hour worked accumulates 0.076923 hours of leave, or 7.6923%. If a worker is paid an hourly pay of 38 hours plus 2 hours overtime, and both are included in gross hours, the Gross Hours options will calculate an entitlement on a weekly pay of 7.6923% of 40 hours, or 3.076 hours.

    • Equals x Hours per allows you to enter a fixed number of hours to be accrued each Pay Period , Month or Year , regardless of the hours worked by the employee. If you have set your employees to be paid on a salary basis rather than on an hourly basis, this is the only option that will automatically accrue entitlements. Using this method, an annual leave entitlement may be for 20 days per year, being 152 hours per year based on a 38-hour week. If the employee is being paid fortnightly, there are 26 pay periods per year. The amount you enter here would be 152 ÷ 26 = 5.846 hours per pay period. If you pay more than a standard pay period in one cheque, you will need to manually adjust this figure. For example, for 2 weeks pay on one pay (1 week in advance), you would double it to 11.692 hours.
    BIf you want the entitlement amount to appear on the pay advice, select the Print on Pay Advice option.
    C

    If you want to carry over any entitlement leave balance from the previous year, select the Carry Remaining Entitlement Over to Next Year option.

    D

    Each entitlement category must have a Linked Wages Category. For example, the Annual Leave Accrual entitlement could be linked to the Annual Leave Pay wage category and the Personal Leave Accrual entitlement could be linked to the Personal Leave wage category. If you create a new entitlement, you must link it to a wage category.

    When employees use their entitlement, for example, by taking a holiday, you allocate the hours taken against the linked wage category (in this example, the Annual Leave Pay wage category). The employee’s accrued leave balance is reduced by the hours taken.

    Note that you can link multiple wage categories to an entitlement. This enables you to provide and track different types of the same entitlement. For example, you can link a Personal Leave wage category and Personal Leave Without Certificate wage category to the Personal Leave Accrual entitlement. When an employee takes either type of leave, Personal Leave Accrual entitlement is reduced by the hours taken.

  5. Click Employee. The Linked Employees window appears.
  6. Select the employees whose pay will include this category, then click OK.
  7. Click Exempt. The Exemptions window appears for the payroll category you are creating.
  8. Select the taxes and deductions that do not apply to the new category.
  9. Click OK.
  10. Click OK to return to the Payroll Category List window.

Calculating annual and personal leave accruals

The following examples may help you calculate the percentage rate for your hourly employees.

Annual leave entitlements

  • An employee has 20 days annual leave per year and works a 7.6-hour day (38-hour week). 7.6 hours × 20 days= 152 hours of annual leave 152 hours ÷ (38 hours × 52 weeks) = 7.6923%

Personal leave entitlements

  • An employee has 10 days personal leave per year and works a 7.6-hour day (38-hour week). 7.6 hours × 10 days = 76 hours of personal leave 76 hours ÷ (38 hours x 52 weeks) = 3.846%
To create a deduction category
  1. Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.
  2. Click the Deductions tab.
  3. Click New. The Deduction Information window appears.
  4. Type a name for the deduction and make the required selections in the window.

    A
    Linked Payable Account is the account (usually a liability account) in which all the deducted money will be accrued. The Default Tax/Deductions Payable Account you specified when setting up payroll appears as the default. You can change this default if you want to track the deduction separately. For example, if you are deducting union fees, create a Union Fees Payable liability account. This way, the balance sheet will display the deductions separately from your PAYG Withholding and other deductions.
    B

    Calculation Basis can be one of the following choices:

    • User-Entered Amount per Pay Period should be selected if you want to manually enter a specific amount for each employee, each pay period or if you want to use the amount you have entered in an employee’s standard pay details. Note that manually entered deductions should be entered as negative values.

      Equals x Percent of results in the maximum superannuation calculated being a percentage of wage, deduction or superannuation payroll categories. For example, an Employer Additional superannuation contribution might be $20 per pay period, but this should not exceed a maximum of 20% of the employee’s base salary.
    • Equals x Percent of allows you to enter a percentage of any of the wage categories. This amount will be deducted until the deduction limit (see below) is reached.

      Type or select a wage category upon which the calculation is to be based. Alternatively, you can select Gross Wages or Federal Wages, which totals all wage categories (hourly and salary) you pay an employee.

    • Equals x Dollars per allows you to deduct the specified amount per pay period, per month, per year or per hour. This amount will be deducted until the limit (see below) is reached.
    C

    Limit may be one of the following choices:

    • No Limit signifies no limit on the amount of money that can be deducted from the employee’s pay for this category.

    • Equals x Percent of results in the maximum deduction amount being a percentage of a wage category. For example, a deduction might be $50 per pay period up to a maximum of 50% of the employee’s base salary. The special categories of Gross Wages and Federal Wages is also available here (refer to discussion in ‘Equals x Percent of’, above).

    • Equals x Dollars per results in the maximum deduction being a fixed dollar amount per pay period, per month or per year. For example, a deduction might be 10% of the employee’s gross wages up to $1,500 per year.
  5. Click Employee. The Linked Employees window appears.
  6. Select the employees whose pay will include this category, then click OK.
  7. Click Exempt. The Exemptions window appears for the payroll category you are creating.
  8. Select the taxes and deductions that do not apply to the new category.
  9. Click OK.
  10. Click OK to return to the Payroll Category List window.
To create an employer expense category
  1. Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.

  2. Click the Expenses tab.
  3. Click New. The Employer Expense Information window appears.
  4. Type a name for the deduction.
  5. Make the required selections for the payroll category.

    A
    Linked Expense Account is the account to which you are charging this expense. The Default Employer Expense Account you specified when setting up payroll appears as the default.
    BLinked Payable Account is the liability account to which your expense will accrue. The Default Tax/Deductions Payable Account you specified when setting up payroll appears as the default.
    CIf you want employer expense amounts to appear on employees’ pay advice, select the Print on Pay Advice option.
    D

    Calculation Basis can be one of the following choices:

    Equals x Percent of allows you to enter a percentage of any of the wage or deduction categories, or a percentage of all the wage categories (by choosing Gross Wages). This expense will be charged until the expense limit is reached.

    Equals x Dollars per allows you to enter the specified amount per pay period, per month or per year until the limit is reached.

    E

    Limits can be used to place a ceiling on the expense. For example, for an expense of $30 per pay period and a limit of 2% of gross wages, a pay with gross wages of $1,000 yields an expense of only $20 (i.e. 2%). Limit may be one of the following choices:

    • No Limit signifies no limit to the expense for this category.

    • Equals x Percent of results in the maximum expense being a percentage of a wage or deduction category or of all wage categories. For example, an expense may be $20 per pay period up to a maximum of 20% of the employee’s salary.

    • Equals x Dollars per results in the maximum expense being a fixed dollar amount per pay period, per month or per year. For example, an expense might be 5% of the employee’s gross wages up to $1,000 per year.
    F

    Employer expenses, such as WorkCover, are only payable if wages exceed a specified amount per month. Enter this amount in the Threshold field.

    When determining if the gross wages on a pay exceed the minimum wage threshold per month, other pays processed in that month are included.

  6. Click Employee. The Linked Employees window appears.
  7. Select the employees whose pay will include this category, then click OK.
  8. Click Exempt. The Exemptions window appears for the payroll category you are creating.
  9. Select the taxes and deductions that do not apply to the new category.
  10. Click OK.
  11. Click OK to return to the Payroll Category List window.

You can't create tax categories, you can only view the existing PAYG Withholding category. To view the tax table information, click the Taxes tab and then click the zoom arrow (   ) next to PAYG Withholding.

Tax table information is set by the ATO. Therefore, any queries should be referred to the ATO.