How do I correctly set up & process Compassionate leave so it doesnt come out of sick leave?

GloriaMaggiora

How do I correctly set up & process Compassionate leave so it doesnt come out of sick leave?

Acctd4

Are you actually making a payment for it or is it unpaid ?

Generally, employees are entitled to 2 days unpaid Compassionate Leave per occasion. It's not an accruing entitlement like Sick/Annual so it doesn't need to be specifically set up as a "Leave".

I would create a new Payroll Item for it with a $ 0.00 rate & just record the number of hours on the Paycheque. (NOTE: The system doesn't allow creation of a Paycheque for $ 0.00 earnings however it will allow a $ 0.00 net Paycheque so this won't work unless there are other $ amounts included on it)

If you're paying it, just use the employee's normal rate on their Paycheque 😊

GloriaMaggiora

I am actually making a payment. The employee is permanent part time.

AndreaLaw

The STP Phase 2 assistant and the ATO stated that Bereavement (or compassionate) Leave is to be allocated to: "Leave - Other Paid Leave (O)' in the tax tracking part of the payroll item. But then this means it will need hours entered in the accrual section of the employee's card ie, 16, in order for the "Leave other 2" column not to go into the negative. This is contrary to the advice of entering this leave as a "Gross Wage" item (even though this makes sense to me). As far as the ATO is concerned, can someone please confirm where it should be correctly entered? Leave or Gross wage?? Thank you! :)

Acctd4

Hi @AndreaLaw

Compassionate/Bereavement Leave is an automatic entitlement - in addition to Annual, Personal/Sick & Long Service - rather than an "earned" one eg employees don't have to work a number of hours to accrue it like they do with the other Leave types. Therefore, it doesn't get accrued in the payroll program as it's paid regardless.

It is indeed allocated to Leave - Other Paid Leave (O) because in order to identify it separately - as paid leave - from ordinary Gross Payments 😊

AndreaLaw

Thanks Shaz. Ok so it will end up in the employee's card, Payroll & Compensation tab, "Leave Details" - in the "Leave 2" column?? If that is the case, then before the pay cheque is written, you would need to allocate 8 or 16 hours into the "hours available" field depending if the employee is taking one or two days...right? Otherwise it goes into negative... ?

Acctd4

No ... because it doesn't "accrue".

It's just paid (like a normal wage) via a Wage > Hourly Wage-Type Payroll Item

AndreaLaw

I just tried that (see s/shot) and the 8 hours b/leave I entered on the pay cheque have caused -8 hours in our "long service leave available". I believe this is because I've put set it to tax classification "Leave - Other Paid Leave (O)" (as ATO advised) as apposed to "Gross "Payments"

Graham Boast

Hi Andrea

The payroll item you have used is linked to the Other 1 Leave which you are using as Long Service Leave. It has nothing to do with the STP2 designation Leave - Other Paid Leave (O). As Shax has suggested, you will need to set up a new Payroll Item. New - Hourly Wage - Regular Pay - Bereavement Leave (or whatever) - choose expense account - Leave Other Paid Leave (O) - Taxes both ticked - Include In Every Hour accruals ticked, Super (SGC) item/s ticked.

You can set this up a smarter way as follows: New - Hourly Wage - Overtime Pay - Bereavement Leave (or whatever) - Tick Custom and enter 1.0 in the box - choose expense account - Leave Other Paid Leave (O) - Taxes both ticked - Include In Every Hour accruals ticked, Super (SGC) item/s ticked. This method will automatically enter the hourly rate when processing the pay, eliminating a potential source of error.

AndreaLaw

Hi Graham

ok, I wasn't sure when the 'STP assistant' upgraded our existing Payroll items....I just couldn't figure out where the steps lead... that makes sense what you say.

And thanks for the step-by-step instructions specific to Reckon. It really helps since the ATO can't give that to us ☺️

Graham Boast

Forgot to mention - you need to change the current one that deducted from Long Service to Long Service Hourly. Now tha you have inadvertently identified it; you may as well fix it properly.

AndreaLaw

We have a long service hourly one already. I must have selected the 'Long Service - Salary' one in error when I made the example for you. Thanks!