Creating a custom Pay Type for Allowances/Deductions
A custom Pay Type can be created for situations where you need to make a payment/deduction outside of the standard Pay Types.
For example: Backpay, Bonus payment, Phone Allowance, Vehicle Allowance, Tool Allowance, Employee works another job with different rate, Rent Allowance, Accomodation Allowance, WINZ deduction, Rent deduction, Accomodation deduction.
There are two options for loading these Pay Types; either taxable or non taxable. Make sure you create the Pay Type under the correction section.
From the employee Profile click on the "pay types" tab
1. Pay types created here will be taxed.
2. Pay types created here will be non-taxable
3. Give your pay type a name that will be recognisable in a timesheet
4. Value of rate. This can be 1 for an allowance or -1 for a deduction, you can then enter the full value into the timesheet, OR you can enter the full value in rate and then enter 1 into the timesheet. See examples of this further down.
5. Select per unit if using 1 or per hour/day/week/year/ if entering full value.
6. Here you can enter codes for tracking purposes
7. Once you have created your Pay Type don't forget to click "save".
We have not yet automated employee WINZ payments so it is necessary to create a custom pay type that deducts the payment amount from your employee's NET pay, then you can create a manual / automatic payment to WINZ (via your bank) as per their instructions.
Go to the lower section: 'Non taxable pay types and allowances'
- Set the name: 'WINZ deduction' (or any name that you will clearly recognise in the list of pay types on the timesheet)
- Set the rate to '-1'. The system will treat this as $1 to subtract per unit . Variations are possible here i.e. you can set it to '1' and in the timesheet remember to set it to '-30', OR you can set the whole deduction amount '-30' and in the timesheet enter just '1' in the WINZ deduction row. Each option will result in the same outcome.
- Set 'per unit'.
Once the Pay Type is created you can now add a row in the timesheet for this Pay Type.
1. Be sure to use the + icon on the right to add a line not a week
2. Select Pay Type you have created from the list
3. Enter the amount to be deducted
Don't forget to click "update and save" once you have completed the timesheet.
1. Pay summary shows the deduction
The "you deposit" amount on the Dashboard will not include the deduction amount.
In some cases you may want to include a taxable accommodation allowance in your pay to an employee, and then deduct the cost of accommodation from them.
For example, if your employee lives on your property and you agree that they will get an accommodation allowance of $100 a week and you will charge them $150 to stay on your property. The employee still needs to pay tax on the $100 that you are giving them as an allowance.
To set this up you would use custom pay types.
Add the allowance as a Normal pay type (taxed) (100 per unit) and the amount you want to deduct as a Non taxable deduction with the rent you are charging as a negative (-150 per unit).