All the conditions and options for processing pays and calculating wages are contained in the Pay Details section which includes: Contact Information, Start Date, Job Classification, Branch Number*, Pay Structure, Pay Options and the End Date that will only appear if the employee has been terminated.
Pay Information and Pay Options are explained further in the following sections.
• Branch Number is the reference for businesses with multiple locations or offices that need to be specified as per ATO requirements. Most reports can also be filtered by Branch numbers. 

Pay Information 

Normal Hours (per Week): Record the normal hours that an employee works per week. This establishes the basis for calculation of entitlements.
This field requires the Normal Hours Per Week regardless of the pay frequency (i.e. Fortnightly, Monthly etc...)

Pay Structure Options : Hourly (for hourly paid employees), Salary (for salaried employees), Nominated Gross (for situations where 'Hourly' or 'Salary' is not appropriate and you nominate the gross pay) or Piece Work (the employee is paid in number of units or pieces processed). See more information on ‘Piece Work’ below.

Hourly Rate/Base Annual Salary: the Hourly Rate or Base Annual Salary is the gross rate for the employee. If you record a Salary Sacrifice using the Salary Sacrifice tab, the amount of salary sacrifice will reduce this amount. (The amount of salary sacrifice will also be shown on pay slips. If you do not want the amount of salary sacrifice to be shown on pay slips, only include the net rate in this field and do not use the Salary Sacrifice tab.)  
Pay Period Options are: Weekly, Fortnightly, Bi-monthly and Monthly.
Pay Method Options are: Cash (where you pay by cash – rounded to nearest 5 cents), Cheque (where you can write cheques manually or use the Cheque Writer system) and Electronic Pay (where amounts are included in a combined file for transfer to your bank). See more information on Electronic Pay and Paying Employees by Internet Banking below.

Piece Work: When the employee’s Pay Structure is Piece Work, you need to use Custom Rates (see section on Custom Rates) to define the units and the rate that will apply to each unit to calculate pays.
Selecting Piece Work will modify other areas of the program.  

The following areas will be disabled: 

  1. Shift Allowances
  2. RDOs
  3. Overtime
  4. Annual Leave and Personal/Carers Leave
  5. Leave Loading 
  6. Long Service Leave 

The Normal Hours (per week) and Hourly Rate boxes will be cleared and disabled in the Pay Details Tab, and in the Summary Page the Hours column will be renamed Units.  
In the Pay Advice Report, the title Hours will be replaced with Units and the title Rate will be replaced with Rate per Unit.  
The title Hours will also be replaced with Units in the Payroll Categories (Detail) report.  

NOTE: Employees with Piece Work selected will not appear in the list of employees when using the Multiple Pays option unless Daily Hours have been recorded. 

Electronic Pay: Electronic Pays are wages paid via a funds transfer from the company’s bank account to the employee’s bank account. It is done through an electronic transfer of a file containing employee wage details and bank account details. Wages Manager will create this file as an .ABA file (an Australian Bank Standard format). This is NOT the same as Internet Banking – see below.
When you select Electronic Pay as the Pay Method you need to record their Bank Details. You will be prompted to do this when you select an employee to be paid electronically and save the changes.
For information on setting up employee bank accounts, see information on Bank Details.
For paying employees into more than one bank account, see information on Multiple Bank Accounts under Bank Details.
For more information on processing electronic pays, see Paying Employees Electronically in Processing Pays.

Paying Employees by Internet Banking:
Paying by Internet Banking is not the same as paying ‘electronically’.
Electronic Pays allow you to create one file that combines all pays so that this one file is sent to your bank. This generally requires that you have the bank’s proprietary software, but some banks may allow you to attach it while you are in internet banking.
However, if you pay your employees using internet banking, do not select Electronic Pay as the option because this will not transfer the information you need to Cashflow Manager to reconcile your records.
Choose Cheque as the Pay Method. This will enable you to record a transaction number (instead of a cheque number) and transfer each payment to your Cashflow Manager file to match with your bank statement.
You can still record your employee’s bank details so that you have them available when paying wages. 

Pay Options 

Increasing or Decreasing Tax Withheld: Wages Manager can increase or decrease the amount of tax for occasions when the automatically calculated tax withheld needs to be manually modified on a regular basis. An example of this scenario is an employee who has a Tax Office approved variation to reduce their tax withheld because of rental property negative gearing deductions. You can specify whether a dollar amount or percentage is adjusted per pay.
To adjust the amount of tax withheld from the employee's pay, click on the [Modify Employee] button and select the Pay Details Tab.
In the Pay Options section, next to Manual Tax Adjustment, select whether to ‘Increase’ or ‘Decrease’ the amount of tax withheld. In the next box, type in the amount of the adjustment and then choose either Dollars or Percent.
If Percent is selected, then the tax calculated will be increased or decreased by the selected percentage amount.
NOTE: You should only decrease the amount of tax withheld when the Tax Office has given authorisation in writing.
You can also adjust the amount of tax calculated when you are processing a pay for a single employee. However, this will only affect that particular pay.
 
Allowances:
Overview - Allowances
When an employee receives allowances or reimbursements this needs to be specified in the Employee’s Details when adding a new employee or modifying an Employee’s Details.
Employees may be paid allowances for a variety of reasons such as industrial award entitlements, use of private motor vehicle etc. In fact, there are 18 different types of allowances (or reimbursements) that are included under the Tax Office guidelines.  
Some require tax to be withheld. Some are reported in gross income while others are reported separately on the PAYG Payment Summary. Some are ordinary times earnings (OTE) for superannuation guarantee purposes while others are not OTE but are still defined as salary and wages.
It is very confusing. However, Wages Manager has made it very simple by automating all of the requirements when you select which of the 18 types of allowances that applies. There are also several additional allowance types that you can select for other allowances or in the event that professional advice you receive indicates that they apply.
The 18 types of allowances and their treatments are:    

Note: if an allowance or reimbursement is a fringe benefit expense, then it needs to be reported separately on the PAYG Payment Summary. To record fringe benefits, click on ‘Tools’ > ‘Record Fringe Benefits’  

Add an Allowance:

  1. In the Employee’s Details, click on [Pay Details], and then click on [Allowances] under Pay Options. 
  2. Click on the [Add] button. A page appears where you can choose the allowance type (see table above). 
  3. Enter a description to identify the allowance. A brief description of the chosen allowance type and its effect on the PAYG is shown below to help identify the correct allowance category. 
  4. If there is a single rate that applies, click on ‘Single Rate’ and type in the amount. In some industries, the number of hours worked on a given day determines the allowance rate that is paid. If this applies, select Multiple Rates and click on the [Add/Modify] button. Add the rates and click on [OK]. Select the type of hours to be included when calculating the number of hours per day for the allowance calculation. (Note: The Multiple Rate feature requires the ‘Daily Hours’ option to be activated: Options > Advanced Preferences > Use Daily Hours. 
  5. Click on [OK] to accept the allowance. You will see the allowance added to the list in Pay Options to be used in processing pays.
    A check box to the right signifies that the allowance is in use: uncheck this box to temporarily or permanently disable the allowance. 
  6. If you have clicked on [Modify Employee] to add the allowance, when you have finished all changes to the Pay Details information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options including allowances.  

Modify an Allowance 

  1. In the Employee’s Details, click on [Pay Details], and then click on [Allowances] under Pay Options.
  2. Click on the [Allowance] you wish to modify and then click on the [Edit] button. This will open the page to adjust the allowance details.  
  3. Once modifications have been made, click on [OK] to accept changes. 
  4. When you have finished all changes to the pay information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options including allowances. 

Delete an Allowance 

  1. In the Employee’s Details, click on [Pay Details], and then click on [Allowances] under Pay Options. 
  2. Click on the [Allowance] you wish to delete and then click on the [Delete] button. You will be prompted if you are sure you wish to remove the allowance. The allowance will be removed from the Allowances list provided it has not been included in any pays. 

Deductions:
Overview - Deductions
Deductions are amounts deducted from the employee's after-tax pay, which the employer pays on their behalf. Examples might be health benefits or insurance funds. A common deduction is for Union Fees but there is a separate category for Union Fees as this is required to be shown on PAYG Payment Summaries. See ‘Union Deductions’ for more information. Employees may also ask you to deduct an amount to pay to a superannuation fund as employee contributions. This is also catered for separately. See Section 5 – Superannuation.
You need to specify when an employee has deductions in the Employee’s Details. This can be done when you add a new employee or modify an Employee’s Details. 

Add a Deduction 

  1. In the Employee’s Details, click on [Pay Details], and then click on the [Deductions Tab] under Pay Options. 
  2. Click on the [Add] button. A page appears where you can enter a name or description of the deduction. 
  3. Record the amount to deduct per pay. 
  4. Click on [OK] to accept the deduction. You will see the deduction added to the list in Pay Options to be used in processing pays.
    A check box signifies the deduction is in use: uncheck this box to temporarily or permanently disable the deduction this box. 
  5. If you have clicked on [Modify Employee] to add the deduction, when you have finished all changes to the Pay Details information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options including deductions. 

Modify a Deduction 

  1. In the Employee’s Details, click on the [Pay Details] Tab, and then click on the [Deductions] Tab under Pay Options. 
  2. Click on the deduction you wish to modify and then click on the [Edit] button. This will open the page to adjust the deduction details. Once modifications have been made, click on [OK] 
  3. When you have finished all changes to the pay information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options including deductions. 

Delete a Deduction 

  1. In the Employee’s Details, click on the [Pay Details] Tab, and then click on the [Deductions] Tab under Pay Options. 
  2. Select the (Deduction) you wish to delete and then click on the [Delete] button. You will be prompted if you are sure you wish to remove the deduction. The deduction will be removed from the Deductions list provided it has not been included in any pays. 

Union Deductions 

  1. Select the (Employee) from the Employee List and click on the [Modify Employee] button. 
  2. Click on the [Pay Details] Tab and then on [Union].
  3. Enter the union name, the employee’s membership number, and the union fee to be deducted from their Net pay each time a pay is processed. 
  4. Click on the [Save] button to save changes or [Cancel] to exit without saving.  
    When processing pays, a button will allow you to edit payroll options including Union Fees. 

Overtime
Overtime is a special category of wages that is not included in Ordinary Time Earnings (OTE), and hence does not normally have superannuation calculated on it. 

  1. Select the (Employee) from the Employee List and click on the [Modify Employee] button.
  2. Under the Pay Details Tab, click on Overtime to show overtime rates.  
  3. Select from the standard rates of 1.5 times and 2 times the normal rate or record a custom overtime rate; just enter the amount by which to multiply the normal rate in the field provided. Tick the options you wish to include. (Custom overtime rates can be added in Custom Rates.) 
  4. Click on the [Save] button to save changes, or [Cancel] to exit without saving any changes.
    When processing pays, a button will allow you to edit payroll options including Overtime. 

Rostered Days Off (RDOs)
When an employee has rostered days off you can stipulate for the program to 'hold back' time paid each pay so that the employee is paid a consistent wage when he or she has their rostered day off. 

  1. Select the employee from the Employee List and click on the [Modify Employee] button.
  2. Under the Pay Details Tab, click on [RDOs].
  3. Enter the number of hours to be held back (and hence not paid in wages) per pay. These hours will accumulate in the Hours Owing field.
  4. When adding an employee who already has accrued RDO hours, record the opening balance of hours in the Hours Owing field. (You can click in the box and type over any value shown.)
  5. Click on the [Save] button to save changes, or [Cancel] to exit without saving changes.
    When processing pays, a button will allow you to edit payroll options including RDOs.
    NOTE: The RDO function is not available to salary, nominated gross, or piece work employees. 

Processing Pays with RDOs
When processing pays for an employee with RDOs, the employee's pay will be reduced by the RDO hours nominated multiplied by the hourly rate. This will show on the pay summary.
When the employee takes their Rostered Day Off, the number of hours taken is recorded in the RDO Hours column. The employee will be paid for this time at their normal rate and the accruals will also be adjusted.

NOTE: When processing pays for an employee with RDOs, the “Calculate tax on amounts paid over…Pay Periods” is “greyed out” and not accessible. This is because RDOs are held back for the period of the pay only (E.g. weekly, fortnightly, and monthly). PAYG cannot be calculated on any more than that period only.
The program deducts the RDO amount (Hours Held x Hourly Rate) from the Gross amount before tax is calculated.
 
Salary Sacrifice:
Overview – Salary Sacrifice
Sometimes employees may sacrifice part of their salary in order to have pre-taxed income converted into superannuation payments or fringe benefits. The advantage is that sacrificed amounts are deducted before tax is calculated, and so reduces the gross income and amount of tax withheld.  
Salary sacrifice amounts are shown on pay advices.

Any amounts of Salary Sacrifice for Superannuation will report on the Superannuation Remittance Report to be included with Superannuation Payments.
Employees of some non-profit and religious organisations can allocate a percentage of their total pay to be paid as fringe benefits. This can be done by selecting ‘Fringe Benefit’ as the salary sacrifice ‘type’ and record the percentage per pay that is set aside for that purpose.  
You need to specify in Employee Details (Add Employee or Modify Employee) when an employee is using the salary sacrifice option. This can be done when you add a new employee or modify an Employee’s Details.

NOTE: If you do not want any reference to the sacrificed amount shown on pay advices, the alternative is not to select the Salary Sacrifice option and only include the reduced amount of salary (or wage) in the Pay Structure. However, in this case you may not be able to monitor superannuation payments related to the salary sacrifice. 

Add a Salary Sacrifice

  1. In the Employee’s Details, click on the [Pay Details] Tab, and then Click on [Salary Sacrifice] Tab under Pay Options.
  2. Click on the [Add] button.
  3. Record a name or description for the salary sacrifice.
  4. Next to Calculate, type in the amount or percent to be sacrificed, and choose the option in the drop-down list next to ‘per pay’.
  5. Select the Type of salary sacrifice from the drop-down list. Options are Superannuation, Fringe Benefit or Tax-Exempt benefit.
    Note: If Fringe Benefits is selected, the ‘salary sacrifice’ will record the amount that is allocated or transferred to a bank account for the expected payment of fringe benefits. The actual fringe benefits payments need to be recorded under Options > Fringe Benefits.
  6. If you select Superannuation, choose the name of the fund in the drop-down list to which the salary sacrifice payments will be paid. If the fund has not already been added in the program you can click on [Add] and record the details now. Enter the employee’s account number as well.
  7. Click on [OK]. You will see the salary sacrifice added to the list in Pay Options to be used in processing pays.
    A check box signifies the salary sacrifice is in use: uncheck this box to temporarily or permanently disable the salary sacrifice. 
  8. If you have clicked on [Modify Employee] to add the salary sacrifice, when you have finished all changes to the Pay information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options including salary sacrifice. 

Modify a Salary Sacrifice’ 

  1. In the Employee’s Details, click on the [Pay Details] Tab and then on the [Salary Sacrifice] Tab under Pay Options.
  2. Click on the salary sacrifice you wish to modify and then on the [Edit] button. This will open the page to adjust the salary sacrifice details.
  3. When finished, click on [OK].When you have finished all changes to the Pay information, click on the [Save] button.
    When processing pays, a button will allow you to edit payroll options, including salary sacrifice. 

Delete a Salary Sacrifice 

  1. In the Employee’s Details, click on the [Pay Details] Tab and then on the [Salary Sacrifice] Tab under Pay Options.
  2. Click on the [Salary Sacrifice] you wish to delete and then on the [Delete] button. You will be prompted to make sure you wish to remove the salary sacrifice. The sacrifice will be removed from the Salary Sacrifice list provided it has not been included in any pays.
    When processing pays, a button will appear so you can edit payroll options, including salary sacrifice.
     
    Custom Rates
    Custom Rates are for additional rates that differ from normal hours and can include overtime and shift allowances. Customising a rate allows you to specify the rate, category and leave accrual options. It is also used for piece work wages where each unit and its rate are specified (e.g. sheep shorn, kilograms of grapes picked, etc)
    Custom Rates give the program a lot of flexibility. For example, it is perfect for the hospitality industry where an employee may have a number of different rates depending on the days and times they work. 
  1. Select the (Employee) from the Employee list and click on the [Modify Employee] button.
  2. Under the Pay Details Tab, click on [Custom Rates]. Any existing custom rates will be displayed.
  3. To add a new rate, click on the [Add] button.
  4. Record a name for the rate, the rate amount and whether it is a dollar amount or a percentage of normal hourly rate.
  5. Choose the wage category it falls into (see table below).
  6. Select in the (Apply Accruals) checkbox if leave is accrued for this rate, and in the Use in Pay checkbox if this rate is to be used in the payroll. (Uncheck the Use in Pay checkbox if you do not want the rate to display when processing pays.)
    The Wage Category selected will determine if the amounts calculated are classified as Ordinary Time Earnings (OTE) for superannuation calculations. If the rate is a result of a particular 'shift', the wage category will be Shift Loading.  
    Wage Category OTE for superannuation calculations Annual Leave taken (Yes) Casual Loading (Yes) Compassionate Leave (Yes) Long Service Leave taken (Yes) Over Award Payments (Yes) Overtime (No) Payments when on Maternity or Paternity leave (No) Personal/Carers Leave taken (Yes) Piece Work (Yes) Public Holidays (Yes) Shift Loading (Yes) Top up payments - serving jury duty or reserve forces etc No Workers compensation where work is performed (Yes) When processing pays, a button will allow you to edit payroll options, including Custom Rates. 

Shift Allowances (Shift Loading)
A Shift Allowance allows you to establish a percentage loading for afternoon and night shifts. When calculating pays, the hours recorded in this category will have the hourly rate increased by the shift loading percentage. 

  1. Select the (Employee) from the Employee list and click on the [Modify Employee] button.
  2. Under the Pay Details Tab, click on [Shift Allowance].
  3. There are boxes for an Afternoon Loading and/or a Night Loading. These amounts are percentages on top of the normal hourly rate. For example, if you wish to have a night loading of time and a half, the Night Loading field should have 50 in it, as 50% on top of the normal hourly rate is 150%, or 1.5 times the normal rate.
    NOTE: Shift Allowance loading forms part of ordinary time earnings for superannuation calculations and leave entitlement accruals. It is not a part of Overtime.
    The Shift Allowance selection is limited to afternoon and night shift. However, additional loading rates can be established for any employee in the Custom Rates section (see above).
    When processing pays, a button will allow you to edit payroll options, including Shift Allowances.
     
     

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