Can I allocate a Class to a Superannuation payroll item?

Nadine Pike
Nadine Pike Member Posts: 6
edited September 2020 in Reckon Accounts (Desktop)
All of my super payments are 'unclassified'. I am able to classify the earning items but not anything else on the payslip.
Am I going to have to do a journal to classify the Super?

Comments

  • Reckon FAQs
    Reckon FAQs Reckon Staff Posts: 357 Reckon Staff
    edited March 2017
    Hi Nadine,

    Thanks for asking the Reckon Community again.

    Classes can be applied to Payroll either to the whole pay, or to earnings items.  When the latter is chosen, non-earnings item will be assigned to the unclassified.  

    regards,
    John
  • Nadine Pike
    Nadine Pike Member Posts: 6
    edited October 2015
    Thank you, Are you saying that there is no way to classify a non 'earning' item. i.e. does that means I have to do a journal to classify them? 
  • John G
    John G Reckon Staff Posts: 1,570 Reckon Staff
    edited February 2017
    Hi Nadine,

    In the Payroll Module, you can only assign ordinary time earnings to a Class.  The other payroll items will by default be put into the Unclassified section.

    General Journals allow you to add a Class, so you can do adjusting entries to make certain amounts appear in an assigned class.  However, you cannot use a payroll item on a General Journal, so you may need to do some manual calculations for the amounts.  You could set up some memorised reports to determine the amounts of the adjustments.   

    Hope this helps.


    regards,
    John
  • Adrian_6974554
    Adrian_6974554 Member Posts: 191 ✭✭
    edited December 2019
    Hello Nadine

    If you tick Track Expenses by Job for each super item configuration.

    It will then allocate the super based on the classes already used in the pay cheque.image


    Then there is no need to do any journals.


    Adrian
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    Hi Nadine.  Adrian is quite correct and generally there are no problems.  However there are a couple that come to mind.  For some unknown reasons there are occasions when Reckon refuses to put the expense to a Class for one employee but will do so for others.  Another issue is that it the employees happens to work for two areas within the organisation that have different classes, the Reckon cannot cater for that and a journal has to be processed.

    On another note - I totally disagree with John G, Official Rep's version of how the program works, based on my experience over many years. By definition,a payroll item such as Motor Vehicle Travel Allowance (cents per km) is not an ordinary times earning item, but the program will classify the expense under a Class.  Also, by definition an item such as Overtime is not ordinary times earnings either, but payment of such an item will be correctly recorded under a Class.  And the list goes on.  I don't know what you were trying to convey John G, but experience proves your answer to be incorrect.  John L G
  • John G
    John G Reckon Staff Posts: 1,570 Reckon Staff
    edited February 2017
    Thanks John for picking up on my shortcomings on classes, for which I apologise to everyone.

    When you set a class for an entire pay, then all those items will be assigned to that class, including Super and PAYGW.

    When you assign one class per earnings item in Preferences, the Earnings Items will be assigned according to the classes specified, and expense items like Travel Allowance will be split between the classes (and unclassified) used in the proportion of the hours assigned to them.  Super and PAYGW will not be split among the Classes and will be listed in Unclassified.


    regards,
    John


  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    Thank you John for the clarification.  However, until now, I had never seen the Employee defaults under preferences and the ability to nominate a Class for each item and quite frankly, under normal circumstances, I cannot see why one would want to do that.  That is not the way I use Payroll. I nominate the Class to be used in the Payroll and Compensation Tab under the Employee Record where the Class can be set for each employee.  When you do that, each item for each employee will be posted to the correct class, without there being any Unclassified classes.  The only time that this will not work is on some rare occasions when the program refuses to recognise the information in the Employee Record and does its own thing and causes that particular item (usually for an individual employee using the same item as for other employees which do work) to be regarded as Unclassified.  I think that if you have a look at this way, you will find that Payroll works a lot differently (and better).
     
    Apart from that, as mentioned above, Payroll cannot split items for an employee who gets paid under two different classes.  Perhaps though, if a separate Wages Item was used for the other Class, it might be able to be set up under the Payroll Preference.  

    You also mentioned above that PAYGW will be assigned to a Class.  Well, if PAYGW is set up as a Liability Account, you cannot assign a Class to it because Classes only work with Income and Expenditure Items.  The PAYG component of a pay is included as an expense to Gross Salaries and assigned to Payroll Liabilities on the other side of the transaction.    John L G
  • Jason Hollis
    Jason Hollis Alumni Posts: 516 Reckon Staff
    edited September 2020
    Hi John,

    Just to clarify for future readers of this post...
    the ability to nominate a Class for each item and quite frankly, under normal circumstances, I cannot see why one would want to do that
    Reasons for wanting to assign multiple classes per employee per pay depend on what you are utilising classes for.

    For example, if your class is a location, then maybe the employee worked in multiple locations that week. However, if your classes are divisions/revenue streams, maybe the employee did lawn mowing for 20 hrs this week, and landscaping for 20 hrs.

    Splitting your Payroll Expenses by class then allows you to filter your reports such as a P&L to see a "truer" reflection of how your business, and importantly a specific area of your business, is operating.



    Regards,
    Jason
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    Thanks Jason.  I have only ever used Classes in situations relating to divisions/revenue streams.  However I have had some occasional situations where an employee worked time under two different divisions for the one pay and as such I had never found a way to satisfactorily cater for this other than to pass a journal entry.  As per the response from employee John G, there seems to be potential in such circumstances to split the income into two different payroll items and have one of these tiems assigned a Class.  But as John G says, that means that SGC on that item then goes to an Unallocated Class.  If that is the case I would not be any better off and would still have to pass a Journal entry to cater for that.  John L G.
  • Jason Hollis
    Jason Hollis Alumni Posts: 516 Reckon Staff
    edited September 2020
    Hi John (and Nadine),

    I hope I haven't misunderstood this thread as the question initially related to Super Items (not allowances) however the split definitely comes through to the P&L per payroll item and super item and allowances.


    image



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    The trick is to ensure the allowance has Track Expenses by Job checked.

    image


    The other thing to consider, once you get to this level, is that tracking super or allowances is generally unsatisfactory anyway as it does not reflect the true cost of the employee, which can range from 20% to 45% on top of the base wage depending on the industry. Hence you do not get a true reflection of Job profit either.

    On-costs include super, workers comp, annual leave, leave loading, personal leave, RDO, TAFE, public holidays etc...

    Therefore I personally do not track super etc.. and I calculate my on-cost on top of my base wage (I do this per Job which then comes through to the P&L so I can review at the micro and macro level).



    Regards,
    Jason
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
    Hi Jason.  It is possible that you have misunderstood my involvement here.  Initially I responded to the query with my slant on how to do it.  I choose to handle my payroll completely differently to you and as a result, I do not have the same problems as you are having to contend with.  This is my situation, in one particular case.
    1.  I have 8 employees who work in 3 separate departments.  These departments have been set up as my Classes.  I add that this is a Not for Profit organisation
    2.  The Profit and Loss Statement is set up to report on the 3 classes - no jobs or anything like that, just classes.
    3.  I DO NOT use the Preferences > Payroll & Employees > Company Preferences > Employee Defaults at all, to select Classes for individual payroll items.  In fact I was unaware of the existence of this area (thankfully) until two days ago.
    4.  Instead, under each Employee > Payroll and Compensation Info > I then select the Class for that employee.
    5.  I run my payroll which can include salary/wages, annual leave, personal leave, special allowances, motor vehicle travel allowance (cents per km) and naturally superannuation.  I do not have any overtime or annual leave loading, not that it would matter at all if I did.
    6.  After I run my payroll, I can run a Profit & Loss Report.   When I do, everything is neatly categorised under the appropriate Class.  That includes, salary, leave, allowances and superannuation.  There is nothing, I repeat nothing, under Unclassified, other than zeros.  The program has behaved exactly as I expected it to and reported accordingly.  The reason that it works perfectly for me is because the payroll items are categorised according to the Class for the individual employee, which means that everything (each component of the pay) is therefore placed under the Class for the employee.
    7.  I do not have to concern myself about whether or not the P&L reflects the true cost of the pay for these employees, because it does.  The only things not covered are Workers Comp and Long Service Leave Accruals which can be a journal at the end of the year, monthly or whenever.
    8.  There are only two known issues that  I have to potentially concern myself with, doing it my way.  Once in a blue moon, somebody might spend time working in more than one department/Class during a pay period.  At an employee level, Payroll cannot handle this.  I therefore have to do a Journal to split out the proportion for the second Class - not really a big drama at all for the rare occasions on when this happens.  If I wanted to, I could use a separate payroll item to highlight these separate hours and then this would then show nicely in my Payroll Report.
    9.  There is another problem which I have seen occur over the years.  Occasionally Payroll will not categorise part of a pay (possibly SGC - cannot remember anymore) and it ends up under Unclassified.  A number of us have never been able to work out why.  Obviously some sort of glitch.
    10  I have used Classes in the same manner as above, for some much larger organisations and similarly, Payroll has been able to handle the Classes for every part of the pay, without anything ending up under Unclassified.  
    My way works beautifully for me and I have no intention of changing.
    Regards  John L G
  • Jason Hollis
    Jason Hollis Alumni Posts: 516 Reckon Staff
    edited September 2020
    Hi John,

    My response was in regard to your comment:
    As per the response from employee John G, there seems to be potential in such circumstances to split the income into two different payroll items and have one of these items assigned a Class.  But as John G says, that means that SGC on that item then goes to an Unallocated Class.  If that is the case I would not be any better off and would still have to pass a Journal entry to cater for that
    And indeed Nadine's original question...
    All of my super payments are 'unclassified'. I am able to classify the earning items but not anything else on the payslip. Am I going to have to do a journal to classify the Super?
    As per my example, single or multiple payroll items, and or super / other earnings items can be assigned to a class and will not remain unassigned (if set up correctly). 

    Again, this was to clarify the process / information for future readers of this thread and in no way was a suggestion to any user to change their current methodology unless they have the same issue as Nadine.



    Hope that clears it up,
    Jason
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2016
    Thanks for the clarification Jason.  Regards  John L G
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2016
    Hi Jason.  I have just done some testing and this is what I can now tell you (and anybody else).
    1.  When an employee record includes a Class, ALL included items in a pay will be categorised according to the specific employee Class.
    2.  Should a particular payroll item be assigned a Class as well, it will NOT override the employee Class.  In other words, if you use a Class in the employee record (as I do), don't try and set up a Class for a Payroll item.  From what I can see it won't work.  In other words, you can use Classes for payroll, one way or the other, but not both ways.  I stand to be corrected, but that is what I have now found.

    Regards  John L G
  • Jason Hollis
    Jason Hollis Alumni Posts: 516 Reckon Staff
    edited December 2016
    Did you want the bad news John?

    In my example, the Employee has a class set as MARINA in his employee record

    image

    However I have overwritten one of the payroll items with the Brokerage class on the paycheque

    image


    and it reports as below

    image 

    In other words, Reckon Accounts is behaving how I would expect it to.


  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2016
    Excellent - that is great news Jason.  So that is another thing that I now know that  Reckon can do after all of these years.  But I had to go searching to find out why your pay cheque looked different to mine.  Eventually I found the answer under Preferences> Company Preferences> Tick Job Costing and class tracking for paycheque expenses> and against  Assign one class per:  one needs to select "Earnings item" rather than "Entire pay cheque"'.

    Thanks for your help and assistance to the Community.  Regards  John L G
  • Jason Hollis
    Jason Hollis Alumni Posts: 516 Reckon Staff
    edited December 2016
    No problem John.


    Screenshot of Payroll Preference
    image

  • Paul Chapman_9864894
    Paul Chapman_9864894 Member Posts: 8
    edited December 2019
    I have set up Company Preferences as per the above screenshot, with "Job Costing, Class and Item tracking for paycheque expenses" ticked, and "Earnings item" checked.

    Employees also have a Class assigned to them against their "Payroll and Compensation Info".

    The problem is, all the Superannuation payments are "Unclassified". 

    Can someone please help.

    Thanks.
    Paul C.
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2019
    Hi Paul
    Have a look at your setup for your SGC payroll items.  On the first screen of the setup. do you have a tick against ?Track Expenses By Job??  If not, that is likely to be the reason why everything is in the unclassified column, I suspect.
    John L G 
  • Paul Chapman_9864894
    Paul Chapman_9864894 Member Posts: 8
    edited December 2019
    Hi John. 

    I was able to make further investigations. 

    Super (SGC) calculated on "Salary" earnings items are tracked to the right class. However, this is the issue:

    1. We set up an Employer Additional (EA) Super payroll item. Track Expenses by Job is checked. This calculates an additional super contribution @9.5% on a particular payroll item that is set up as an "Other" earnings item. 

    On the paycheque details screen, the "Base Salary" earnings item is set to "Class 1". The "Other" earnings item is also set to "Class 1". The EA super component calculates correctly on the "Other" earnings item. After posting, the "Other" earnings item as an expense is classified correctly, but the super component remains "Unclassified". 

    If we make the "Other" earnings item a different class, e.g. "Class 2", then the EA super component is calculated correctly and after posting, is under "Class 2".  (But we don't want this to be under "Class 2", we want the super component to be under "Class 1".)

    If a "Base Salary" earnings item is included together with the "Other" earnings item in the EA super calculation, then the entire EA super contribution is posted to "Class 2". (But we don't want to include the "Base Salary" in the EA super calculation, so this does not help.)

    So, how do we have the Employer Additional super contribution post to the correct class, when the "Base Salary" is set to "Class 1" and the "Other" earnings item is also set to "Class 1"? 

    For troubleshooting purposes, I changed the super SGC component to also calculate on the "Other" earnings item. This made no difference. The super component for the "Other" earnings item was "unclassified".

    Note, I created a test company file and our scenario posts to the correct classes for the EA Super component. So I think there is something awry with our live company file and what is happening when super (either SG or EA) is calculating on an "Other" earnings item solely. 

    Please help.

    Thanks
    Paul C.
  • Paul Chapman_9864894
    Paul Chapman_9864894 Member Posts: 8
    edited December 2019
    Bump
  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited December 2019
    Hi Paul.  More like "bummer" I would suggest!  I have looked at what you have stated, but nothing stands out as a reason for it not calculating correctly.  This is particularly relevant as it is calculating correctly when you use a different class, but is also calculating correctly in your test file.
    There is only one other thing that I can think of that might fix this.  I would suggest that you do a rebuild of the company file ?three? times and see if this works.  Why three?  In the old days with desktop, we were invariably told that after an upgrade, we should do at least three rebuilds.  I have seen situations where a problem also has only been resolved after doing those three rebuilds (still hadn't got fixed after the second one).  To me your findings tend to indicate a glitch within Reckon which might be resolved after doing those three rebuilds.  Not that it really matters, but I realise that you have not indicated if you are using desktop or Hosted.  Good luck.
    John L G
  • Paul Chapman_9864894
    Paul Chapman_9864894 Member Posts: 8
    edited December 2019
    Thanks John. 

    I will try the rebuild three times suggestion and see how it goes.

    Regards
    Paul C.