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Type:

This may be:

  • Payment The Pay Item is used to pay normal remuneration. Use a Payment Type Pay Item with a negative value for a reversal of a payment. Do NOT use a Deduction Type Item for this.
  • Deduction The Pay Item is used to deduct an amount from the total pay due to an employee. A garnishee or a change for a meal for example. Note it is important to differentiate between a deduction (which has no effect on the Gross Pay) and a reversal (which will reduce the Gross Pay). Use a Payment Type Pay Item with a negative value for a reversal of a payment, NOT a Deduction Type Item.
  • Loading Deduction This is a Deduction Type Item where the amount deducted is a percentage of the Gross Pay.
  • Reimbursement Strictly this is not a payment in the wages sense and it is not included in the employees Gross Pay or Payment Summary. It is intended to be used where an employee is reimbursed some expense, which is not part of their wages.
Function:

This determines how the pay rate for the Pay Item will be worked out.

  • Unit The pay rate is stored in the Pay Item itself or deduced from an Age or Experience Table attached to the Pay Item. The actual payment is this rate multiplied by the number of units entered on the payscreen or generated from the RostCare payment process.
  • Loading The base rate for the Pay Item is the percentage rate set for the Item multiplied by the pay rate from the first Pay Item above this Pay Item, which has the Base Item Flag set to Yes. Where no such Item is available the pay rate from the Pay Item linked to the Current Classification [the base rate for that Classification] for the employee on the payscreen is used.
  • Amount The pay rate is stored in the Pay Item itself or deduced from an Age or Experience Table attached to the Pay Item. No units may be used with an Amount Type Pay Item.
Unit Per Name:

This describes the normal units for the Item. For example Hour or Day.
Deduction Type:

This may be set to:

  • Normal it is always deducted after tax has been calculated and has no effect on tax.
  • Union Fees It is normally deducted before tax is calculated and does affect tax.
  • Donation This is allows you to handle “Workplace Giving”. It is always deducted before tax is calculated and does effect tax.
Tax Options:

This determines how amounts from this Pay Item will be used in the calculation of the employee’s Tax liability.

Note

The notes below are not advice. Please contact the ATO should you have any queries about the tax status and allocation of payments to Payment Summary Labels.

  • Yes Amounts paid with this Pay item will be included in the normal Tax Calculation algorithm as specified by the ATO.
  • No Amounts paid with this Pay item will not be included in the normal Tax Calculation algorithm as specified by the ATO. This is applicable to allowances that may be paid:
    • Tax free (reported in one of the Allowance Labels)
    • Bona fide redundancy payments (reported at Label D)
    • Approved early retirement scheme payments (reported at Label D)
  • Termination This will be reported at Label A. It includes amounts for:
    • Unused LSL that was accrued after 15th August 1978 & before 18th August 1993.
    • Unused Holiday and other Leave related payments that accrued before 18th August 1993.
    • Unused LSL that accrued after 16th August 1978 and Holiday & other Leave related payments, where the amount was paid because the employee ceased employment under an approved early retirement scheme, because of invalidity or because of bona fide redundancy.
  • Long Service Leave (termination) This is applicable to Termination Payments for Long Service Leave accrued prior to August 1977. This is reported at Label B.
  • Average Marginal Rate This is applicable to Termination Payments for Leave & Long Service Leave accrued after to August 1992 and is reported at the Gross Earnings Label.
  • Loading This is applicable for Leave Loading payments. These are Tax Free [pre taxed is a more accurate description I think] up to an annual payment of $320.00. Note that this threshold should be set as a parameter in the Setup, Database Setup, General menu selection. This is reported at the Gross Earnings Label.
  • Loading Termination This is applicable for Pay Items that pay Termination Payments for Leave Loading. This is reported at the Gross Earnings Label.
  • Label C Use this for Pay Items that pay amounts that should be recorded at label C on the Eligible Termination Payments document. Label C amounts are not reported on the Payment Summary but on a separate Eligible Termination Payment Summary.
  • Label E Use this for Pay Items that pay amounts that should be recorded at Label E. (Back Pay that relates to employment that occurred more that 12 months ago).

For Deduction Items

  • Normal Deductions which do not affect tax. Are deducted after tax is calculated.
  • Union Dues May be deducted before tax is calculated.
  • Donation May be deducted before tax is calculated eg Workplace Giving.
Payment Summary Label [Box]:
 

This determines the position on the Payment Summary for amounts paid with this Pay Item. Set the appropriate Payment Summary Label here. Note that the setting at Tax Options will limit the choices here.

Options are:

  • Gross
  • Allowances 1 to 6
  • Other
  • CDEP - Community Development Employment Project
  • Label A
  • Label B
  • Label C
  • Label D
  • Label E

For Deduction Items

  • After The deduction is made after tax has been calculated. Not normally reported on the Payment Summary.
  • Before The deduction is made before tax is calculated. Reported on the Payment Summary as Union Dues or Workplace Giving.
Reduce Units:

Where set this will reduce the units paid with the Pay Item by the percentage that is set. Normally this field is left at 0.
Base Rate:

Set this to Yes if this Item is to be used as a Base Rate for loading Items.

Note

The Pay Item that is set as the Default Pay Item for a Classification must have this Flag set to Yes.
Termination Base Dollars:
 

Set this to Yes if this Item is to be used as the basis for Termination Pay.
Superannuation:

Where amounts paid with this Pay Item will be used as the basis for employer Superannuation liability calculations set this flag as follows:

  • Value The actual amount paid with the Item will be used as the basis for Superannuation liability.
  • Hours The number of units paid (hours normally) multiplied by the Base Rate for the employee will be used as the basis for Superannuation liability.
Monthly SGC Qualifying:
 

Does this pay item count toward meeting the minimum monthly threshold for becoming eligible for SGC. This can be different from the Superannuation setting.
Work Average Load:
 

Set this to Yes if the amounts paid with this Pay Item will be used to calculate the average penalty rate for an employee. Note some awards require that an employee taking leave has their Leave Loading paid at the average penalty rate they would have received had they worked normally where this is greater than 17.5%.
Experience Hours:
 

Set this to Yes if the amounts paid with this Pay Item will be used to increase the Experience Hours for an employee.
Payrun Hours:

Set this to Yes if the amounts paid with this Pay Item will be used to increase the Payrun Hours for an employee. Essentially this means should the units paid with this Pay Item be considered as work hours. Note generally leave hours are counted as work hours.
Accrue Leave:

Where the use of this Pay Item will trigger the accrual of any sort of leave set this flag to Yes.
Event Day Accrual:
 

Where the use of this Pay Item will trigger the accrual of Event Leave set this value to the factor that will be applied to the hours and days to effect the accrual. Typically this is one so that the hours accrued will be same as the hours paid and one day will accrue..
Counter Accrual:
 

Where the use of this Pay Item will trigger the Counter Leave mechanism set this value to the factor that will be applied to the number of counts that will normally be generated. Note that the number of Counts may be edited when the Pay Item is used on the Pay Screen.
2nd Counter Accrual:
 

This is used to create counts which will accrue Double Counter Leave. Both Counters must be satisfied for Double Counter Leave to accrue.
Additional RDO Factor:
 

This RDO factor disables the normal Delayed Leave [ADO/RDO] accrual function and substitutes a process that accrues ADO/RDO but does not reduce the payment to the employee. Suits QLD Nurses ADO/RDO accrual.
Dollars Column:

This relates to the Hours & Dollars report. Any Pay Item that Pays (or Reverses) dollars should be allocated to a Dollars Column. In effect this is all Pay Items except Deductions and Reimbursements.
Hours Column:

This relates to the Hours & Dollars report. Any Pay Item that Pays (or Reverses) hours should be allocated to an Hours Column. This should normally include all Pay Items with the Payrun Hours flag set to Yes.
Company Level:

This relates to integration with LegiCare the General Ledger.
Month End Accrual %:
 

During the Month End process, the cost for the days between the end of the pay period and the end of the month is accrued and transferred to legicare as an accrual journal. Some pay items, eg. Deductions, shouldn’t be included in the accrual process and can be set to zero in this field. When set to zero, no accrual will be generated.

Most pay items should be set to 100%, but you might want to set some pay items to 0% eg. Overtime, Deductions, Leave Taken etc.