Summary

Important: Some fields on this tab page cannot be changed after you save the Allowances record so you must set them up correctly.
Under no circumstances should a consultant or user attempt to make a 'backdoor' change to these fields.

The Details (iii) tab page contains mandatory field that control:

• How the allowance is treated for costing.
• The type of calculations the allowance is included in.
• Whether the allowance is included in the statistics report.

Fields

Allow proportional costing:

Proportional costing allows you to split the cost of an employee's allowance transactions between cost centres.

• Yes

  You can apply proportional costing in a standard or manual pay, or to a permanent transaction. When you process the pay, PayGlobal applies the proportional costing split to allowance transactions for that employee.

  Important: Proportional costing is applied only to allowances that have Allow proportional costing = Yes.

• No

  PayGlobal applies the costing that is entered in the transaction.

or cost via Allowance Group:

Enabled when Allow proportional costing = No. If you do not allow proportional costing, then you can split allowances by allowance group. Allowance group splitting is typically used for non-paying transactions to split costs based on the hours worked at various cost centres in the current pay.

Select an allowance group for cost splitting that contains all the allowances that need to be split. When you process the pay, PayGlobal splits non-paying allowances using the employee’s costs for all allowances in the allowance group. The Type specified in the allowance group will determine the costing split.

AL payout type (NZ):

New Zealand only. Enabled only when you add a new Allowance record with Type = "L. Annual Leave" and Tax override type = "E. Extra Pay".

Important: The AL payout type field is disabled when you model an Allowance record.

AL payout type has the following options:

• None (default)
• Statutory
• Non-statutory.

If the AL payout type is "Statutory" or "Non-statutory", then transaction dates for this allowance are not displayed on the History Analysis Leave Calendar (and other Leave Calendars such as ESS).

Include in Annual Leave (NZ) / Use in AL calculations (Aus):

This Yes/No field determines key rates and accrued leave.

Yes - When the pay is processed and closed, the allowance is included in the following rates and fields:

The following allowance types are never included in annual leave unit accruals regardless of the Include in Annual Leave/Use in AL calculations setting:

• A-type allowances
• Z-type allowances
• C-type allowances
• Y-type allowances

Include in Sick Leave (Aus)

This will be used for sick leave calculations in future so should be set correct. The default for all countries and for every Australian state bar Victoria is that this is always equal to "Use In Annual Leave"

Include in statistics report:

Select 'Yes' to include the information from this allowance in the statistics report.

For New Zealand databases, see:

• Post-2021 report - Stats NZ - Quarterly Employment Survey
• Pre-2021 report - Statistics Report - PGPRMISC004

For Australian databases, see Statistics Report - PGPRMISC901.

Include in Super calculations (NZ, Fiji):

Select "Yes" to include the allowance total in superannuation calculations based on the percentage of gross.

Use in Super OTE (Aus):

This field controls the definition of whether a payment is for 'Ordinary time earnings' (OTE) as defined in subsection 6(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA).

The definition of 'ordinary time earnings' is relevant to employers for the purpose of calculating the minimum level of superannuation support required for individual employees under the SGAA.

Refer to the SGR 2009/2 for guidance on what is or isn't considered to be OTE; see https://www.ato.gov.au/law/view/document?DocID=SGR/SGR20092/NAT/ATO/00001&PiT=99991231235958#P38.

Use in Super salary or wages (Aus):

In Australian databases when the superannuation allowance has Details (i) | Calculation method = "G. Percentage of gross", select "Yes" to include the allowance in the salary or wages total to determine whether the employee has earned more than the monthly minimum and is eligible for Superannuation Guarantee.

Note: In Australian databases, if the superannuation allowance has Calculation method = "I. Percentage of allowance group", then the Use in Super OTE field is not used. For more information, see the Australian Superannuation and Salary Sacrifice manual.

Include in FTE calculations:

Enabled only when Company Settings | Payroll | Misc tab | FTE details = "Yes".

• If FTE details = "No", then Include in FTE calculations = "Yes" for all allowance types, and you cannot change this value in the allowance.
• If FTE details = "Yes", then Include in FTE calculations = "Yes" for all allowance types except A-type, and you can change this value in the allowance.

If Include in FTE calculations = "Yes", then PayGlobal adds the allowance to the Full-time Equivalent accumulator, which is stored in history as FTE Hours. However, changing Include in FTE calculations from "No" to "Yes" will not update existing historical transactions.

Extra quantity:

Used in New Zealand databases only. The Extra quantity field is active for allowance Types ‘A’, ‘H’, ‘R’, ‘Z’, ‘V’, ‘C’ and ‘Y’. This field is used for reporting purposes only and is not used in the calculation of an allowance.

If you select ‘Yes’, then an Extra Quantity field appears on the transaction entry screen when a user adds this allowance transaction. This field allows the user to enter the value of an allowance in Hours and Days.

For example, if you have a number of casual employees who do not work regular hours, then you cannot create realistic profiled hours for them. In PayGlobal, you may have set the profiled hours for these employees to one hour per day for five days per week — regardless of what hours they actually work. The profiled hours do not reflect true values. The Extra Quantity field allows you to enter the value of an allowance for the casual employees in Hours and Days.

Tax deductible (print on Payment Summary) (Aus):

Australia only. When you select ‘Yes’, non-paying, paying, taxable and non-taxable allowances are displayed separately in the Allowances section of the taxation reports. This field is generally used for taxable expense payments, such as meal allowances.

ATO reporting category (AU)

The ATO reporting category is used to assist with creating the STP dataset. The options available are:

• Allowance type

  Referred to by the ATO as "Allowance Items".

  All "Taxable" "A-type" allowances must now to be separately itemised, not just expense allowances that may have been deductible on the employee’s IITR.
  

• Bonus (new for STP phase 2)

  Used for allowances representing a lump sum payment referable to ordinary hours worked (OTE). But in addition to their salary or wages to reward performance, retain or attract employment relationships or in acknowledgement or conditional upon services provided.

  Exception: Bonuses not referable to OTE must be classified for STP as Overtime

• CDEP

  Use this option only if you are an employer that applied for subsidies and retention bonuses to operate the grandfathered CDEP scheme to create new ongoing jobs for Aboriginal and Torres Strait Islander peoples.

  Allowances using this option must be A type with CDEP tax override setting only.

• Commission (new for STP phase 2)

  A commission payment can be paid as an extra incentive on top of an employee’s pay or make up an employee’s whole wage (commission only payments).

  Use the "Commission" option only for commissions referable to ordinary hours worked (OTE).

  For commissions that are not referrable to OTE, use Overtime

• Director Fee (new for STP phase 2)

  Use for allowances paid to the director of a company, or to a person who performs the duties of a director of the company.

  Directors’ Fees may include payment to cover travelling costs, costs associated with attending meetings and other expenses incurred in the position of a company director.

  NOTE: Director fee payments are also "Taxable" and deemed "OTE".

• Exempt Foreign Employment Income

  Use this option only for allowances paid to employees that are Australian resident for tax purposes but have been working in another country for 91 days or more for a continuous period and the payment is exempt from Australian income tax.

• Non-cash benefit
• Over-time (new for STP phase 2)

  Used for allowances representing payments for work performed during hours outside an employee’s ordinary hours of work, this applies to:

  1. Normal overtime for waged employees

  2. Overtime component of an annualised salary, e.g. clause 17.2 of the MA000019: Banking, Finance and Insurance Award 2020

  3. TOIL that is cashed out

  4. Call backs that were outside OTE hours and/or were not pre-arranged, e.g. clause 33.4 of the MA000073: Food, Beverage and Tobacco Manufacturing Award 2010

  5. On Call/standby or other availability allowances an employee may receive in readiness to return to work outside normal work hours and is paid at penalty or overtime rates , e.g. clause 31.2 of the MA000036: Plumbing and Fire Sprinklers Award 2010.

  6. Commissions wholly referable to overtime hours

  7. Bonuses wholly referable to overtime hours

  8. Leave Loading In Lieu, i.e leave loading that is demonstrably referable to a notional loss of opportunity to work overtime. (aka Leave Penalty payments)

  9. Hourly Driving Rates or Rates/km - where the allowance relates to the excess of the total ordinary hours per period.

  10. Part-time additional hours paid at a penalty or overtime rate that do not accrue leave entitlements and are not ordinary time earnings, e.g. clause 21.2 of the MA000076: Educational Services (Schools) General Staffing Award 2020.

  11. Excess Travelling Time – payable at overtime rates for travel to an alternative place of work outside the ordinary span of hours, e.g. clause 20.3(b)(ii) of the MA000048 Airline Operations – Ground Staff Award 2020.

  IMPORTANT: Do not use this option for the following:

  a. Shift penalities payable on ordinary hours of work.

  b. Flexi-time.

  c. TOIL taken or paid on termination

  d. RDO's cashed-out, taken or paid on termination.

• Paid Leave (new for STP phase 2)

  Use for allowances that represent leave that is taken or cashed out. This group also includes leave paid on termination but PayGlobal handles this automatically for you.

  See ATO reporting subcategories for more details.

• Reportable Fringe Benefit

  Use for allowances where the payer pays the expense that is otherwise deductible on behalf of, or for the benefit of, the payee.

  See ATO reporting subcategories for more details.

• Return to Work

  Refers to return to work payments.

ATO reporting subcategory (AU)

Some ATO reporting categories need more granular categorisation in order to fulfil STP reporting requirements. The subcategories are as follows:

Allowance Type

• Car
• Award Transport
• Laundry
• Meals
• Travel
• Tool
• Task
• Qualification
• Other – General
• Other – Non-deductible
• Other – Uniform
• Other – Private vehicle
• Other – Home office
• Other – Transport/fares
• Other - Jobkeeper

Paid Leave

• Ancillary and defence leave

  Examples: Jury duty, volunteer leave for bodies such as the Australian Defence Forces, the State Emergency Service, Country Fire Authority and the RSPCA

• Cash out of leave in service

  Used for allowances that represent the cash-out of leave balances (not on termination) for all leave types except TOIL or loading that is demonstrably referable to a notional loss of opportunity to work overtime. Use ATO Reporting Category "Overtime" for those.

• Other paid leave

  Used for allowances that represent leave the employee has taken as a paid absence from work, e.g. Annual leave, Sick/Carers Leave, Long Service leave, lieu days, RDOs, TOIL taken etc.

• Paid Parental leave

  Use this for both employer AND government paid parental leave allowances.

  DO NOT use this for return to work after a parental leave absence payments. Use ATO Reporting Category "Bonus" for those.

• Workers’ compensation

  Use for allowances that represent payments to an employee on leave due to an accident.

Reportable Fringe Benefits

• RFBA Taxable
• RFBA Non-taxable

For further details please refer to the Single Touch Payroll Manual for setting both Reporting Category and Subcategory.

Tax reporting category (Fiji)

To report payments correctly to FRCA using the Employer Monthly Schedule (EMS) report, certain allowances need to be correctly identified by specific payment category.

For further details refer to PGPRTAXA084A - Employer Monthly Schedule - 1 Aug 2019