Setting up employees with annualised wage arrangements

This article details best practice methods in setting up a full time salaried employee covered by a modern award containing annualised wage arrangement provisions ("annualised wage employees"). A list of the modern awards prescribed with annualised wage arrangement provisions can be found here.

Setting up an employee as per the instructions provided here will easily facilitate the recurring automated payment of the employee's salary in the pay run whilst ensuring the annual award reconciliation process is as simple as possible. Instructions on undertaking the annual award reconciliation process can be found here.

A new employee can be added to the platform using various methods. This article will detail only the specific settings required for new and existing annualised wage employees. This set up is only applicable to businesses that have Awards enabled in their subscription. Instructions on how to install an award into payroll can be accessed here

Adding an employee using the employee wizard

Our standard instructions on using the employee wizard can be read in conjunction with these instructions. When it comes to setting up annualised wage employees, take note of the following settings to apply:

Employment Details

You must still assign the award applicable to the employee's employment. Then select the employment agreement called "Annualised Wage - Full Time". This will then pre-populate the 'Pay Rate Template' and 'Pay Condition Rule Set' fields, as follows:


The purpose of assigning the award and employment agreement to the annualised wage employee is to give the employee access to the award work types when creating timesheets. This will ensure that timesheets are costing correctly during the reconciliation process as they are using the work types linked to the award as opposed to custom created work types. As a result, you should ensure you're not assigning identical work types to employees (ie the award work type and custom work type) as this could affect the reconciliation process.

Additionally, this specific set up ensures that timesheets are not imported into the pay run (thereby avoiding duplicate payment). This is possible due to the rules contained in the "Annualised Wage" pay condition rule set that basically stop any approved timesheets importing into the pay run.

Pay Rate

Because annualised wage employees are paid a salary we have linked the 'Annualised Wage' pay rate template to the 'Salary' pay category, which is configured as an annual unit. By default, you will see the salary displayed for the employee as $0. 


Click on "Override pay rate" to unlock the pay rate field and then enter the employee's agreed salary:



Previously, we have always locked the "Timesheets" field and only allowed for the 'Use timesheets' option. We have now opened this up so users can also choose to use timesheets for exceptions only:


This is the option to choose for any annualised wage employee. The reason being:

  • Allows employees to get access to creating timesheets and/or clocking in/out (for record keeping and reconciliation purposes);
  • Employee will still be set up on auto-pay, ie earnings paid by default in the pay run;
  • When applying approved leave in the pay run, the timesheet by exception setting will ensure that leave hours are not added to the employee's default earnings. Rather, where the leave category is configured to report the earnings for the leave taken against another pay category the employee's default hours will reduce by the number of leave hours and the leave hours will be processed against the assigned pay category. There is further explanation on this in the "Interaction between leave and timesheets" section below.

Adding an employee using the employee import function

Our standard instructions on using the employee import file can be read in conjunction with these instructions. When it comes to setting up annualised wage employees, take note of the values to apply to the following import columns:

  • PrimaryPayCategory = 'Salary'. This is the pay category name linked to the 'Annualised Wage' pay rate template, which is configured as an annual unit. 
  • Rate = enter the employee's annual salary amount 
  • RateUnit = 'Annually'
  • OverrideTemplateRate = 'True'. This will override the default $0 value set up against the 'Annualised Wage - Full Time' employment agreement and rather use the salary amount entered in the Rate column. 
  • AutomaticallyPayEmployee = 'True'
  • EmploymentAgreement = 'Annualised Wage - Full Time'. You don't need to worry about entering a value in the PayConditionRuleSet or PayRateTemplate columns as they will pre-populate based on the EmploymentAgreement value.
  • IsEnabledForTimesheets = 'EnabledForExceptions'

The above values can be used when adding a new employee or updating an existing employee and are the import equivalent of what has been described in the add employee wizard section above. Please refer to that section to get an understanding of why each setting is essential in ensuring the correct set up of annualised wage employees.  

Leave allowance templates

As you would be aware, when an employee is set up with award settings, you can only assign a leave allowance template to an employee that comes from the pre-packaged award. Considering some annualised wage employees may have negotiated payment in lieu of receiving annual leave loading, we have added new leave allowance templates in the affected awards to account for this.

You will now see the following additional leave allowance template options per state:

  • "Permanent (no loading) - {state/territory}": This template provides the minimum leave entitlements with personal/carer's leave accruing in hours and 0% annual leave loading against the annual leave leave category.
  • "Permanent (10 PCL days - no loading) - {state/territory}": This template provides the minimum leave entitlements with personal/carer's leave accruing in days and 0% annual leave loading against the annual leave leave category.

If your annualised wage employee will not be paid annual leave loading when taking annual leave, ensure you apply one of the above newly created leave allowance template option, based on the relevant state/territory the employee works in.  

Interaction between leave and timesheets

This section is relevant for businesses that apply the 'Report the earnings for the leave taken against another pay category' payment setup for their paid leave categories. 

You will notice the following warning appear in the employee's Pay Run Defaults screen if the Timesheets setting = Use timesheets for exceptions only and the 'Pay these earnings by default in a pay run' checkbox is ticked:


For annualised wage employees, you can disregard this warning. One reason the settings (as mentioned above) need to apply as such is to ensure that when leave requests are applied, the leave hours applied are not added to the employee's default hours. For example, if an annualised wage employee is being paid 38 hours by default per week and the timesheets setting = use timesheets to submit all hours worked, any leave applied in the pay run will result as follows: 


This is a monthly pay run so the employee's monthly hours being paid by default is 164.66667 hours. The employee also has 10 hours of leave to be applied in the pay run. As you can see the 10 leave hours are being added to the employee's normal default hours in the pay run, resulting in a total of 174.66667 hours paid.

Alternatively, where the employee's Timesheets settings = use timesheets for exceptions only, any leave applied in the pay run will result as follows: 


The 10 hours of leave are applied to the pay run but the difference is that 10 hours of the employee's primary pay category earnings are being deducted so that the total hours for the pay run still add up to the monthly default of 164.66667 hours.

In regards to how annualised employees can apply for leave, they can use WorkZone or the employee portal, however, the leave request will need to be converted to a timesheet in order to then undertake a proper comparison between the award vs what they were paid. The reason why a timesheet for a leave request must be produced is because only timesheets are interpreted, not leave requests. Additionally, the salaried employee should be on a rule set that doesn’t bring across timesheets into a pay run so that leave based timesheets won’t appear in the pay run but the actual leave request will still appear, so that the leave request can be applied into the pay run as per normal. 


Some awards may have pay condition rules set up that link to pre-created tags, for eg First Aid allowance, permanent night shift worker, etc. A list of pre-defined tags for each affected award is listed in the associated support article for that award.

As you would normally assign tags to an employee being paid in accordance with the award, where applicable, so you should for an annualised wage employee. The reason for doing this would be to ensure that when it comes time to undertaking the award reconciliation process, the timesheets are being costed correctly and are capturing all the additional penalties and/or allowances that the employee would otherwise have received under the award had they not been employed under the award's annualised wage arrangement provisions. Rest assured that the tags won't automatically add additional earnings to an employee's standard pay, ie the employee will not automatically be paid a first aid allowance for example because they have the first aid tag assigned to them.


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