Pay Categories are used to define the rates that employees are paid. Setting up your pay categories will help simplify the management of employee pay rates by:
Automatically calculating linked rates through loading and penalty rate multipliers
Configuring super rates
Configuring leave accrual
- Making allowances STP compliant
Create a Pay Category
You can Create a Pay Category by following these steps;
- The setting for Pay categories can be accessed and updated by clicking on the 'Payroll settings' > 'Pay categories' page
When you create a new business, a number of common pay categories have already been created however, you are able to create new ones that match your business needs. To create a new Pay Category click on the 'Add' button as shown below:
- A new pay category box will open. Type the name of the new pay category in the pay category name box. Then click on the 'Add' button on the bottom right. See Image below.
Fields in this category include:
- Units - hourly, annually, fixed, or daily
- Super rate - as a percentage
- PAYG tax exempt
- Accrues leave
- Payroll tax exempt
- Rate loading - this is loading that is applied on top of the base rate that the pay category is linked to. For example, if you have a base rate of $10 and set a rate loading of 50%, then the linked rate will be $15.
- Penalty loading - this is penalty loading that applied on top of the base rate and the rate loading.
- Payment classification - this is used for pay categories that need to be reported separately on an employee's income statement. You can find more information about this in the following articles:
- Rate Precision - option to set rate at between 0 and 5 decimal places.
In regards to rate precision, please note the following:
* Additional earnings lines (configured at the bottom of the employees' pay rates screen) can be specified to up to 5dp, regardless of the pay category setting.
* In the pay run, rates may be specified to up to 5dp, regardless of the pay category setting.
5. Once you have completed the Pay Category, press the 'Save' button on the bottom left of the screen.
Manage Pay Categories
In addition to the base value pay category, you are able to create linked categories.
For example a pay category could have the base value of part-time weekdays but have linked categories of part-time Saturday and another one for part-time Sunday.
When a pay category is linked to a base pay category, you only need to specify the base rate for the employee and the rate for the linked pay categories will be automatically calculated.
You can create Linked Categories, by following the the steps below;
- Click on the 'Add linked category' button in the bottom right hand corner of the chosen pay category.
- You will need to enter a name for the the linked category, then press the 'Add' button.
Note: you have the opportunity to delete the linked pay category up until the point that it is used in a pay run. If you move your cursor towards the end you will see a figure like this By clicking on this figure you are able to delete the new linked pay category.
- Once the linked pay category is added you will need to complete the relevant fields. The image below is explained;
- Units - Pre-populated according to main pay category i.e. hourly
- Super Rate % - Entered with percentage required by SGS legislation
- Rate Loading % - As per award/employment agreement
- Penalty Loading % - As per award/employment agreement
Tick the remaining fields, by clicking on the box adjacent to the field, if you require this function, e.g. Accrues Leave, PAYG Exempt etc.
- Press the Save button in the bottom left hand corner.
System default pay categories
When you create a new business, there are a number of pay categories that are pre-loaded into the system for your convenience. Among these, there are 'System default' categories that are marked with a 'System' tag, as shown below:
These system maintained pay categories cannot be deleted or replaced, although some settings (such as loading) can in some cases be edited. This is intentional to ensure the system calculates the pay categories and associated components in a specific manner.
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