Pay code types

Each pay code has to be linked to a pay code type so that Synergetic knows how to treat them. The pay code type is used to calculate the employee's pay.

If you set up a pay code with a type of Normal Pay, then it will count towards the employee's total gross pay. Pay codes with a type of Salary Sacrifice are then subtracted from the gross pay and any Taxable/Non-Taxable Allowances are added.

Note: You can develop a naming standard to prefix pay codes with the codes defined in the table below. This will make it easier to work with the pay codes and identify them on reports.

Pay codes can be linked to one of the following types:

Code	Description	Sort order
N	Normal Pay	1
R	Salary Sacrifice	2
L	Taxable Allowance	3
T	Tax Adjustment	4
H	HECS-HELP Tax Adjustment	5
A	Non-Taxable Allowance	6
D	Other Deduction	7
S	Employee Contributed Super	8
E	Employer Contributed Super	9
Z	Termination Pay	10

The Sort Order defines the order in which the linked pay codes will be displayed on reports.

Note: This affects the PAYG Summary and where items are grouped.

Details of the pay codes are shown in the table below.

Pay code type	Description
N - Normal Pay	Main portion of an employee's gross pay and generally the main pay type that is used for calculating tax and superannuation. Always set this to the full amount of an employee's pay, even if the employee wants to salary sacrifice. Note: Synergetic has an inbuilt pay code of NLOAD for Leave Loading. Leave Loading cannot be changed to another code.
R - Salary Sacrifice	Reduces an employee's taxable income. Tax will be calculated on the Normal Pay less Salary Sacrifice, but superannuation will still be calculated on the full amount of Normal Pay. For example: Normal Pay = 1000.00 Salary Sacrifice = -200.00 Tax is calculated on 800.00, superannuation is calculated on 1000.00
L - Taxable Allowance	Before-tax allowance and therefore is included as part of the tax calculation. Taxable allowances will typically appear on the employee's PAYG Payment Summary in the allowances section, not summarised into gross pay.
T - Tax Adjustment	Indicates that an employee wants to pay a tax amount different from what is automatically calculated. Synergetic always calculates tax based on gross pay, tax scale, earning level and pay periods to arrive at a figure. The tax adjustment is then added to the resulting figure.
H - HECS-HELP Tax Adjustment	Forces Synergetic to take out more or less HECS-HELP tax in an employee's pay, in Australia.
A - Non-Taxable Allowance	Allowance that is added to the employee's nett pay. For example, a reimbursement. This figure has no effect on the tax calculation or gross income base for an employee and typically will not appear on a PAYG Payment Summary.
D - Other Deductions	Other amount deducted from an employee's nett pay. This figure has no effect on the tax calculation or gross income base for an employee.
S - Employee Contributed Super	Superannuation that employees contribute taken out of their nett pay. Superannuation can be entered as a percentage or a fixed amount. If a percentage is specified then a formula is used to automatically calculate the amount. See Calculating superannuation.
E - Employer Contributed Super	Superannuation that the employer contributes to an employee. This figure has no effect on the employee's nett pay or tax. Superannuation can be entered as a percentage or a fixed amount. If a percentage is specified then a formula is used to automatically calculate the amount. See Calculating superannuation.
Z - Termination Payment	Used for paying an employee termination pay when they leave. Synergetic does not calculate the amounts or tax for this pay type, therefore it is up to you to manually calculate the figures. Synergetic sets the termination flag and date on the employee record when the pay is updated. Note: Termination pay is included in the Earnings not liable for levy section of the IRD Report. See Preparing IRD monthly schedules.

Last modified: 25/07/2016 2:49:34 PM