Has the use of TOIL Payroll items changed with STP2?

We have managed TOIL outside of payroll up until now.

I believe we now need to use a Leave item to manage TOIL, and report when overtime TOIL is paid out.

We have installed Reckon 2023 bug fixed version today, and will run the Migration assistant once we have a few new payroll items added.

Can anyone please help with the latest STP 2 compliant set up for TOIL?

Thank you

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Acctd4

Hi Leshelle

The Migration Assistant can automatically suggest mappings so will likely already classify it for you. If not, it is mapped as follows:

For TOIL Hours taken (& paid): Leave - Other Paid Leave
For TOIL Hrs cashed out (eg paid but NOT taken): Overtime

The ATO has a Quick Reference Table here: https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-Phase-2-employer-reporting-guidelines/?page=12#Payment_types_A___G

Leshelle

Hi there.

Thanks for that.

I dont have these Payroll Items yet.

How many items do I need to set up ?

I'll need one for Toil hrs worked/banked as well, or do you just use one for everything?

Thanks for your help, I've only used Excel to manage TOIL, and two columns on a timesheet for plus and minus.

Leshelle

Acctd4

There are a few options depending how you want to track it - I have just the one set up as an Hourly Wage-type, configured the same as my normal "Hourly ..." one.

When employees work additional hours, I include these hours in their normal (paid) hours then use this TiL Payroll Item on the next line, to minus out (& bank/accrue) the excess:

This is an example of a PT employee who works 50 hrs p/fn:

(NB: The previous TiL balance was 13.75 Hrs. This correctly accrues when worked/reduces when paid accordingly) 😊

It initially calculates everything on the full (extra) hours but then the TiL minuses those extra calcs back out again.

FYI This method tracks accrual, use & running balance perfectly but NOT the "YTD Used" (I just disregard that figure)

It can throw out the figures on the Super Report by Employee as it tries to still calculate Super on top of the TiL here, instead of reducing by it, so need to confirm the correct Super liability via the Liabilities &/or Super by Fund report 😬

Leshelle

Ok, makes sense.

Using the same example, 50 hr fortnight, if employee takes 5 hours of TOIL as time off in next pay and works 45 hours, what payroll item will you use for the 5 hours ? The same item? Or a 'Leave 'Til item ?

Acctd4

Hi Leshelle

Same TiL Payroll Item but the hours being taken are entered as a POSITIVE amount instead:

(Disregard the Available TiL qty shown as I've edited the previous Paycheque! 😬 )

Leshelle

Thanks for taking the time to assist. I really appreciate it.

So if it's the same item, this 5 hours will be reported as Leave Other in STP2, and when you banked the 5.50 in the first example, that's also reported to ATO as Leave Other negative. Is that right?

And Flex time in and out is reported as Gross, so that requires more payroll items to be set up, or would you just not bother to show Flex time in Payroll ?

Acctd4

STP reports what’s paid so I’m assuming the banking (negative) won’t be reported (but don’t quote me in that as I’ve not migrated this particular file yet, so yet to be confirmed lol 😆) but when TiL is taken/paid, then it will … yes, under Leave - Other Paid Leave ☺️

What does “Flex Time” actually represent? Is it not essentially the same thing with a different name ? 🤔

Leshelle

Yes Flex Time or TIL, are essentially the same - additional ordinary hours paid at ordinary time

And overtime TOIL is banked as Time and a half or double time, (hours worked outside of ordinary hours eg, weekends) and will be reporting as Overtime in STP2 when cashed out.

Hopefully this becomes clearer when I run the migration assistant.

My aim is to keep it simple for the employees, not over complicate the payslip, and give the ATO what they need.

You mentioned at the start of this thread there were some other ways to handle Toil.

If you have the time tomorrow I'd love to know them. If not, thanks so much for your time.

Acctd4

@Leshelle I’ve not tried the other suggestions but you should find instructions for them in the in-program Help files if you search for “Time in lieu” ☺️

Robyn Kelly (Partner)

This might help you Leshelle

https://www.ato.gov.au/Business/Single-Touch-Payroll/In-detail/Single-Touch-Payroll-Phase-2-employer-reporting-guidelines/?page=4#PaidLeave

GlynisFNQ

https://community.reckon.com/discussion/comment/20636824#Comment_20636824

Hi Shaz @Acctd4 👋

Just following this very helpful thread... I'm setting a TOIL item up today for Overtime earnings. I was wondering, if it is accruing and essentially an IOU, I need to code it to my Payroll Liabilities don't I? Rather than Payroll Expense accounts?

And, on that note, it's 'normal' to have two separate Payroll Items for TOIL isn't it???

One for ordinary time earnings with tax tracking as Gross Wages, and another for overtime with tax tracking as Overtime Wages, have I got that correct? Therefore reported differently via STP if set up correctly.

And neither tax tracking would be classed as "Leave"... ouch, my head hurts...🤔 is that correct???🤩

Like Leshelle, I want to keep the pay slips as simple as possible... Ideally, it'd be best to only have one TOIL $ pay rate accruing/decreasing... I foresee trouble trying to keep 'track' (literally!) if an employee has both ordinary and overtime, can you?

Always love hearing from you - thanks Shaz,

Glynis 😊

Acctd4

Hi Glynis

Payroll is always based on payment date eg when paid so I would stick to the expense account. This is particularly true when using the same Payroll Item(s) for both accruing & taking the hours, otherwise your accounts won’t balance!

Yes, thanks to the different reporting requirements for STP2, it’s now necessary to separate TOIL when taken v paid out on termination, so we now need separate Payroll Items for it, for those scenarios 🤨 HOWEVER, the first one should be mapped to Other Paid Leave (not Gross Wages) & the 2nd to Overtime

As long as both Payroll Items are specifically configured to TOIL, there shouldn’t be any issues with tracking as they will both be linked to that same one ☺️

GlynisFNQ

Help again please Shaz! @Acctd4 🙏

I can't seem to get my TOIL Payroll Item to link up with the Accrual box... it's not coming across...

Here's my screenshot where I have manually entered the 24.5 hrs (currently calculated externally) but the 'newly accrued' 5.25hrs hasn't added on. I noticed it wouldn't allow me to enter hours, only quantity...

Oh dear... The 'background' set up must be wrong... 😫

Perhaps I need to make an appointment with you to set up remote access assistance??? Please??? ☺️

Thanks as always!!

Glynis

I found an OLD thread from 2014 about the set up of TOIL leave but I'm thinking the STP2 changes make this outdated... not to mention that it's very confusing to follow:

https://downloads.reckon.com.au/library.reckon.com.au/library/pdf/qbi_Time%20in%20Lieu%20payslip%202.pdf

Acctd4

Hi Glynis

If you can shoot me through an email direct, I’ll send you through my doc on it that I’ve written up in line with the current STP2 settings ☺️