Setting up Employee allowances is crucial for accurate payroll processing and compliance with tax regulations. This guide will teach you the necessary steps to create, manage, and assign allowances to employees. This list is provided as a short list of instructions so additional details can be found by following the link at the end of this article. The shortened steps are as follows.
- Navigation Go to Payroll/HR > Administration > Inquiry and then select the Allowance item. Sapphire one will display the Allowance & Deduction list screen. Any allowances already created will be listed on this screen.
- Allowance Class Precedence – Allowance Classes must be created prior to setting up Allowance records. This ensures that when a new Allowance is created, an appropriate existing Allowance Class can be assigned to their master record.
- Creating a New Allowance Click on the blue + button on the main toolbar to initiate the creation of a new allowance and proceed as follows.
Allowance or Deduction area
- ID – Allowance ID’s – The addition of a suffix to each allowance will allow different allowances to be created for individual companies.
- Description – Provide a descriptive name for the Allowance.
- Company – For this the user has two choices as follows, leave it as is blank no company ID or enter the ID of the company that the user is currently logged into.
- Active – Allowances when created are set by default as active. They may be made inactive by de-selecting the checkbox.
Classification area
- Class – The entry of a class is not required by default. However it should be noted that the use of a Class, enables a further breakdown for analysis reporting purposes. This can also be used for grouping.
- Award – Enter the award that is to be linked to this new allowance.
Package area
- Allowance Deduction checkbox – By default SapphireOne one assumes all allowances to be an allowance. If the allowance is to be a deduction select this checkbox.
- Type – Select the type of allowance (e.g., travel, meal, housing).
- Multiplier – Multiplier is used for different purposes, depending on the calculation method. It could be the multiplier for hours, Days or weeks for example.
- GL ID – The General Ledger ID is used to identify the General Ledger account the allowance will be accrued to. In this case, the Wages Account.
- Allow Multiple Departments Checkbox –
- Calc. Method – You can also shift the Pay item to a different category on the Pay slip. For example, have an Allowance appear as part of the wages.
- Appearance – The selected option will dictate the layout of the payslip and should be chosen based on the employees needs in relation to reporting.
- Salary Sacrifice MP Checkbox – When this checkbox is selected SapphireOne will create an MP to the employee based in the settings in the Super Salary Sacrifice here.
- Maximum % up to $ – This data entry field is used to express a maximum dollar value that the entered percentage can take.
- Custom Sort – Custom Sort is used if you want a reporting basis for allowances other than alphanumerically.
- Payment Summary / STP Position – This dictates the value will be accrued to the Gross Salary area of the Payment Summary.
- Data entry must have Project and GL Checkbox – When this checkbox is selected, on the Working Transactions data entry screen this allowance is required to have project and a General Ledger ID before data entry is allowed to be saved.
- Use this Allowance When Calculating – Provided to allow for the attachment of an allowance to an income type or types. For example, Holiday Pay, Carer/Personal Pay, Superannuation Pay calculations etc.
Protected Pay area
- Amount data entry Field – The protected pay rate can’t be less than what labour hire employees would get if they were working directly for the host.
- Percentage –
Notes area
- Enter notes for the allowance as required.
For more detailed instructions, please refer to the Payroll/HR > Administration > Allowance article.