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Setup Allowances

Please Note: 

We recommend entering the hours through a timesheet. However, you can check with your accountant if that is a mandatory requirement for the industry and awards that apply to you.

As part of annualized salaries from 1st March, employers need to record the annual wage arrangement in writing and give their employees a copy.

This has to include:

  • The annual wage that will be paid.
  • Which award entitlements are included in the annual wage.
  • How the annual wage has been calculated, including any assumptions used in the calculation.
  • The maximum (or outer limit) number of penalty hours and overtime hours the employee can work in a pay period or roster cycle without extra payment.

The employer must also record the employees:

  • Starting and finishing times.
  • Unpaid breaks are taken.

Employees have to acknowledge the record of hours they've worked is correct by signing in writing or electronically at the end of every pay period or roster cycle. This record is used for annual reconciliations. You can refer to the fair work website for further details:

 

This video takes you through:

  • Types of allowances
  • Setting up allowances before the pay run
  • Taxable and non-taxable allowances
  • Attaching allowances to the employees' records

 

Allowances are additions or deductions from the employees' pays. Allowances can be applied before or after tax. It is best to create the allowance records before setting up the employee files, although it is easy to create allowances later if required.

Create An Allowance

  1. Navigate to Setup > Allowances 

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  2. Click Add to display the Wizard to appear 

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  3. Select Next at the Allowance Wizard's welcome screen 

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  4. Choose Standard Allowance or Unit Based Allowance 
    • Standard Allowance - the allowance will be calculated with a monetary or percentage value over a frequency to be set on the next screen. 
    • Unit Based Allowance - the allowance will be calculated by entering the number of units to be paid when each payslip is created. An example of this is travel kilometers where the Amount specified in the setup record should be for each unit (say $0.60 per km). The total Allowance is then automatically calculated on each pay slip by multiplying the number of units for the pay period as entered in the ADJUSTMENTS area of the WAGES dialogue box.

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  5. Click Next
  6. Complete the Allowance Details 

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    • Description: Enter a description of the allowance
    • Type: Select if it’s a deduction or addition
      • Addition: Select this option if you want the amount to be added to the employee's pay
      • Deduction: Select this option if you want the amount to be deducted from their pay
    • Amount: Enter the allowance amount
    • Minimum: Leave as $0
    • Maximum: Leave as $0
    • Frequency: Select how this allowance is paid (eg Each pay period, Hourly, Each shift, etc)
    • Taxed: Check this box if the allowance is to be taxed
    • Include in Super Calculation: Check if the allowance if super is to be paid on this amount

  7. At the ATO Payment Summary screen, make your selection. We recommend you check with your accountant if the allowances need to be shown on the following:
    • The ATO Payment Summary 
    • Reported in STP 
    • ATO Allowance type (i.e.: car, transport, meals, travel) 
    • If none of the above, leave both options unchecked 

  8. Leave as default because you are using Agrimaster as the accounting system - the allowance account code can be set in Agrimaster. Click Next 

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  9. Select Finish to confirm the new allowance created 

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  10. The Allowance screen will list the newly created allowance. Click Close to complete the process.

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  11. Click close to save 

Optional Next Steps, Depending On Employment Conditions:
Setup Salary Sacrifice Deductions

Setup Additional Superannuation Contribution

Skip And Continue To: Setup Leave Accruals

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