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Adding an Allowance |
  
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Adding an Allowance |
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To add a new allowance, from the main screen, click the 'Pay Types' picture button followed by 'Add'
or
click on the word 'Pay Types' and select 'Add Allowances' from the pull-down menu.
and 
The details of the new allowance will be displayed, as seen below
There is only one tab of information and it's fields are outlined below
Active – is this allowance being used ? Do you want to see it in the list of allowances ? i.e. Yes / No
Type - there are three (3) pay types to select from eg. pay rate, allowance, or deduction. Click on the down arrow and select allowance from the list.
Description - enter text which best describes the allowance eg. Car Allowance, Overtime Meal Allowance.
Paid by - click on the down arrow for a list of payment methods eg. per Hour, per Day, per Kilometer etc. Select the payment method used for this allowance. If the list does not contain the method you require then you can type over the contents of the field. (e.g. per sheep).
Value - enter a value for this Pay Rate. It may be expressed as either a dollar value, or a percentage. In the case of the latter, the value is equal to that percentage of the hourly rate in the award the particular employee is linked to.
NOTE: If you do not type the percentage (%) sign after the amount (eg. 25%), it will default to a dollar figure (eg $25.00).
Allowance Type - select one of the three following options:
1. Non-Reportable - this is not to be shown on the Payment Summary as either an allowance or being included in the Gross Amount. This allowance must be Non-Taxable.
2. Show Allowance in Gross Payment box - To be included in the Gross Amount on the Payment Summary not as a separate amount as an allowance. This allowance must be taxable.
3. Show Allowance separately in Allowance box - To be shown on the Payment Summary separately as an allowance (will not be included in the Gross Amount). This allowance can be either Taxable or Non-Taxable.
4. Show Allowance separately in Allowance box and tax the allowance at the Rate detailed in the Notice of Variation – By special notice from the ATO an allowance can be taxed at a certain percentage, independent of the tax on the rest of the pay. If this option is selected a percentage box will appear. DO NOT USE THIS OPTION FOR 0% TAX, USE 'SHOW ALLOWANCE SEPARATELY IN ALLOWANCE' BOX AND UNTICK THE TAXABLE TICK BOX.
NOTE: To check the legality of any Non-Taxable or Non-Reportable Allowances which you have been paying you can ring the ATO's national enquiry number on 13 24 78.
For further information click on the 'Taxing of Allowances' button when adding/editing an allowance.
or click on the hyperlink to the left, which will take you directly to the ATO website.
Tax - if the allowance is subject to tax then click on the Taxable box.
Report To - The value of this field is used in producing a report on the usage of this pay type. See Tracking Pay Types.
If the selection is not on the list of choices, simply type in the field what you wish to have as a heading to show for this allowance on the report.
Accruals - if the SGL is to apply to this allowance click on the superannuation box.
Contributes to $450 rule - a tick next to 'Contributes to $450 rule' means the allowance constitues salary and wages, and a tick next to 'Superannuation' means the allowance is also ordinary time earnings. A payment can be salary and wages but not ordinary time earnings (eg Time and a half) but the reverse is never true.
If not stated otherwise in an industrial award or workplace agreement, ATO legislation stipulates that if an employee earns less than $450 in a calender month, the employer is exempt from providing the SGL for the employee. These "earnings" mean salary and wages. If the condition is met, then the employer applies the SGL percentage to the employee's ordinary time earnings. A tick next to this box will mean that money from this allowance is going towards the employee's salary and wages when determining of they have earnt over $450 in the calendar month yet.
NOTE: If they have earnt over $450, but there is no tick to 'Superannuation', then no SGL will amount from this allowance.
Click 'OK' to save your allowance details.
If you do not wish to save the allowance details then click 'Cancel'.
NOTE: If you do not proceed with adding an allowance (Cancel after pressing the 'Add' button), the program will place a BLANK in the Pay Types List. You can edit this with new allowance information at a later stage.