Payroll - changing to Salary

donnamaro1

I've previously only paid using hourly rates.

I've a new employee that will be working a 44 hour week (and yes I've checked with Fairwork and the Award and she's compensated for the above 38 hours)

How do I setup the Annual Leave Accrual and Sick Leave Accruals?

And then how do I pay those entitlements?

Acctd4

You can still set this employee up on an "Hourly Rate" - I'm wondering if you mean you've only ever employed Casuals (so they weren't actually accruing leave) ?

I have Leave set up in the Preferences so it's automatic when a new employee is created. (If employing a Casual/no leave applies, you just enter "0" in the 'Maximum number of hours' field in the employee's record, & that leave won't accrue)

NOTE: I only ever set leave accruals to "Every Hour" - otherwise any fluctuations in an employee's working hours will result in incorrect calculations.

Even with Salary pays, I still enter the applicable hours. The difference with Salary Payroll Items is that the total Paycheque amount remains the same. Instead, it just 'splits' the $ amount according to the hours you enter.

eg If an employee is on a 38-hr p/wk salary that calculates to a gross amount of $ 1,000 p/wk & they take 19 hrs of accrued Personal (Sick) Leave one week, the Paycheque would be broken down like this:

As you enter the 19 hours for each, the system automatically splits the $ 1,000 as half the hours are normal salary & half the hours & sick leave 😊

NOTE: When you set up an employee on a Salary, you enter the ANNUAL total in the employee's record - the system then automatically breaks that down accordingly based on your pay periods.

eg In the example above, the Salary amount entered in the employee record is $ 52,000 as the employee is paid $ 1,000 p/wk (x 52 weeks).

FYI ... The "per hr" leave accruals for a 38-hr work week are as follows:

Personal (Sick): 0.03846 (The system will change this to 0.03833 due to rounding - this is fine!)

Annual: 0.07692 (The system will change this to 0.07694 due to rounding - again, this is fine!)

donnamaro1

Hi Shaz, thank you so much for your speedy response.

no I've previously had part timers and full timers on an hourly rate

With this person they'll be doing 38-44 hours per week but for a set salary of $65k

So do I do an annual leave, sick accrual of per pay period?

Then if she has say half a day or a full day off, how do I record that?

Acctd4

No! As previously stated, the only way to ensure leave always accrues correctly is to have the accrual set to Every Hour.

When the employee takes time off, you use the Personal (or Holiday, as applicable) Leave Payroll Item(s) & enter the number of hours being taken off.

The Leave Payroll Items are specifically linked to the relevant leave balances accrued, & will automatically reduce these accordingly.

donnamaro1

but how does it work when some weeks she works 38 hours and the next week 44 hours - it's still all the same salary amount, and the weekly pay doesn't change

Kris_Williams

I understand what you are saying and I believe per pay would work but Shaz is the expert

Acctd4

In that case, I would set her up on a Salary & enter 38 hours each time (for the leave to calculate correctly)

If you want the relevant number of hours displayed on each Paycheque, when the employee works more, I would create & use a new Salary Payroll Item - exactly the same as the original - that doesn't accrue leave:

Not only does Every Pay leave accrual cause accruals to be wrong when hours change, in my experience, it can cause leave balance display issues on the Paycheque &/or on Payslips that can be very difficult (& in some cases, impossible) to fix! 😩

donnamaro1

Fantastic and thank you so much, I think I've done it right - at least my screen looks like yours with the accrual amounts etc etc

Shaz your help is sooo much appreciated

Acctd4

You're very welcome @donnamaro1

Feel free to get in touch direct if you need more in-depth assistance 😊