PHONE RE-IMBURSEMENT ALLOWANCE SET UP

Sonya Herbert

The previous payroll person has set up the Reimbursement Allowance to employees (once a month) as a PAYROLL item under the "type" as Hourly Wage - not "other" or "allowance" so everytime i pay this item - an hour "wage" goes against their account; I've tried to edit the allowance but it won't allow me to change the PAYROLL TYPE - so will i have to make a complete new Payroll Item - if so, can someone tell how to set it up correctly this time. Thank you.

Acctd4

Yes, unfortunately you’ll need to create a new Payroll Item & replace it in the employee’s record as the type is only selectable upon initial setup.

Just to clarify though … is this actually a reimbursement or is it an allowance ?

The 2 are different as a reimbursement is not assessable income to the employee (so doesn’t affect their gross income, PAYG or super) when an employee is reimbursed for a specific cost (just like if they buy milk for the office & they’re paid back)

However, an allowance is additional income that may or may not be expendable.

Sonya Herbert

it's an allowance towards cost of phone useage each month

Acctd4

@Sonya Herbert

Create the new Payroll Item as an Allowance, mapped to Allowances - Tool for the STP tax type. Both Taxes should be ticked & Super included ☺️

Sonya Herbert

How do i set up the new Payroll Item?

Acctd4

Hi @Sonya Herbert

• In your Payroll Item List, click Ctrl + N on your keyboard
• Payroll Item Type > Addition > Next
• Enter the name (eg "Ph Allowance") > Next
• Select your applicable Payroll Expense account from the dropdown (this will normally be your usual Gross Wages expense account, unless you have additional subaccounts broken down)
• Tax Tracking Type > Allowance - Tool Allowances > Next
• Taxes - Tick both > Next
• Calculate based on quantity > Neither > Next
• Default Rate and limit - Leave BLANK (This should be set in the employee record, NOT here!) > Next
• Inclusions > Select All > Finish

Add this Allowance to the employee's default record here, with the Amount (per pay) Unless you have a specific agreed annual maximum, leave Limit blank: