Summary

Use this tab page to configure how the system calculates a gross allowance amount based on a nett amount being input. This would primarily be used in the case of employers paying out a nett bonus to an employee.

Note: This tab is available in NZ and AU databases only.

Nett to Gross Allowance

Enables or disables the nett to gross calculation. Select YES to allow the allowance to do a nett to gross calculation when processing the pay.

Tolerance (cents)

Used to provide an acceptable range for the nett amount result.

The reason for requiring this is the system needs to reverse engineer tax and other transaction calculations to work out the gross value. The lower the tolerance level, the higher the amount of reprocessing required to get a value within the accepted range.

The maximum value that can be put in is 999c (or $9.99)

For example, if an employee is expected to get a nett amount of $500 but a tolerance of 25c is acceptable then the user would enter '25' and the system will attempt to generate a value that is either equal to $500 or between $499.75 and $500.25.

Non-taxable deductions reduce nett pay

Enables or disables the facility to allow non-taxable (post-tax) deductions to reduce the nett pay. Select YES to enable this facility.

For example, an allowance is enabled as a nett to gross allowance, with a tolerance of 5 (cents) and the "Non-taxable deductions reduce nett pay" field is set to YES. This allowance is used in a pay with a rate amount of $1,000 (determining the nett pay), then the gross for this allowance may be calculated at $1,263.00 and tax of $262.98, giving a within tolerance nett pay of $1,000.02. If a post-tax deduction of $200 was added to the pay, then the nett pay would be reduced to $800.02.

Entering a nett to gross allowance

• For A-type allowances we recommend entering a quantity of "1" and the rate amount as the expected nett pay value.
• For H and R-type allowances we recommend entering the quantity as the number of hours worked to be paid and the rate amount as the nett value of a single hour.
• Only one nett to gross transaction should be used for a single employee in a given pay.
• We recommend for employees pays that include salary sacrifice transactions are not used in conjunction with nett to gross allowances. If necessary, manual intervention of the nett to gross allowance would be required in these cases and the recalculate option set to NO.
• Where a large number of nett to gross allowances are being paid in a given pay, we would recommend running the process pay function with the Detailed Log setting set to NO to reduce the size of the resulting audit log.

See also

Allowances