Payroll - Pay Types

Pay Types are used to define the rates that the employees are paid. Setting up pay types will help simplify the management of employee pay rates by:

• Automatically calculating linked rates through loading and penalty rate
• Configuring super rates
• Configuring leave accrual
• Configuring other paid leave
• Configuring overtime pay rates for Single Touch purpose

Pay Types Classification

There are two classifications for the pay types as below:

• System protected and locked from any modification
• User user controlled pay type, created and managed by the user

The System pay type can be further classified as:

• General Pay Types: separately itemised for the reporting purpose, the following is a list of the general pay types:
• Ordinary Time Earnings

Base salary and wages.

• Community Development Employment Project

This relates to the wages of employees working under the CDEP scheme. The CDEP scheme has now been ceased, but support arrangements are in place that require those remaining members of the scheme to be supported for the duration of its operation.

• Double Time

Double time is when an employee recieves double rate payment such as for public holidays or based on the awards agreement.

• Government Paid Parental Leave

After at least 12 months of service, employees can get parental leave, paid or unpaid, when an employee gives birth, an employee’s spouse or de facto partner gives birth or an employee adopts a child under 16 years of age. Some employers offer paid parental leave and the Government Paid Parental Leave (GPPL) Scheme offers eligible employees, who are the primary carer of a newborn or adopted child, up to 18 weeks’ leave, paid at the national minimum wage. Generally, GPPL is paid by Services Australia to the employer to pay the employee, but both types of paid parental leave may be paid at the same time.

• Overtime

Overtime is when an employee works extra time. It can include work done beyond their ordinary hours of work or outside the agreed number of hours.

• Salary

Use the salary pay type when you pay an employee a fixed amount such as a weekly gross without having to enter the number of hours and the hourly rate.

• Workers Compensation

Workers' compensation is a form of insurance payment to employees if they are injured at work or become sick due to their work.

• Leave Pay Types: specifically designed to accommodate different types of leave as below:
• Ancillary and Defence Leave

There are a range of leave types that are collectively referenced as “ancillary” leave for full time, part time and casual workers such as Jury duty leave, Community service leave, Defence reserve leave, etc.

• Annual Leave

holiday or recreation leave for full time and part time workers. Annual leave may also incur a Leave Loading which is a bonus payment, usually a percentage of the leave balance.

• Long Service Leave

granted to reward a specified period of continuous employment for full time, part time and casual workers

• Personal Leave

granted for sickness, injury or to care for an immediate family or household member who is sick or injured, or to help during a family emergency for full time and part time workers.

• Rostered Day Off

a paid entitlement to absence, accrued due to additional ordinary time hours worked in a roster period, that an employee doesn’t have to work. Note that some RDOs are set out in an award or registered agreement to be unpaid.

• Time Off In Lieu

a paid absence, provided in some awards and registered agreements, to allow an employee to take paid time off work during the ordinary span of hours at their ordinary rate of pay (not penalty rates) instead of being paid overtime pay.

Setting up a Pay Type

This guide takes you through the process of creating a pay type:

1. Access the Pay Types from the Setup menu

A list of all system pay types are displayed, these types are protected from modifications and deletion.

2. Click Add Pay Type
3. The new pay type window appears
• Pay Code enter a unique code maximum 5 chars
• Description enter a rate type description

Make sure to enter a unique description to represent the new pay type, the description will be used when creating a payroll payment and printing a payment slip.

• Superannuation check this option if super applies to this pay type
• Leave accumulation check this option if leave accrued on this pay type

This option should only be checked for ordinary time earnings pay types or considred as ordinary time earnings by the awards agreement.

• Overtime check this option if this pay type is an overtime pay type payment

Single Touch Payroll STP phase 2 requires that all overtime payments are identified and reported as per the STP rules.

• Paid Leave check this option if the pay type is a paid leave payment

Single Touch Payroll STP phase 2 requires that all paid leave payments are identified and reported as per the STP rules.

• Fixed Amount check this option if this pay type to be set as a fixed amount instead of an hourly rate
4. Click Save

Deleting or Updating a Pay Type

To update a pay type, click the Edit button, new pay type configuration do not apply to previous transactions such as payroll payment and will only be applied to new transactions created after the pay type update.

To delete a pay type, click the Delete button. Pay type can not be deleted if it has been used in Payroll, Timesheets, Invoices, Employees' Setting, etc.

System pay types are protected and can not be updated or deleted