To ensure you pay your employees correctly, you need to create and manage your business’ earning and deduction pay components (transactions).
You can either set up your earnings and deductions before you start processing a pay run, or you can create them while processing the pay run.
Sage One Payroll has prepopulated pay components available, however, if you have to create your own pay component, you can do so.
To create a pay component, click on Maintenance…Pay Components. The following screen will display:
Select the Business in which you want to create/view a pay component. You can select between Earnings, Deductions or Leave Component Types:
To view a current setup pay component, select the component on the list. To create a new Pay component, Click on the Create New Component option below the list. The following screen will display:
- Business – Select the business from the drop down where you will create the pay component in.
- Component Name – Enter a name for the pay component in this field.
- Pay Advice Description – If you want the pay component to display a different name on an employee pay advice, enter the name in this field.
- Pay Component Category – Select the pay component category. You can select between earnings, deductions or leave.
Tax Calculation Type (Earning Pay Component specific)
Select the tax calculation type for the pay component. You can select between:
- Taxable (Normal)
- Taxable (Lump Sum) – for lump sum calculations on specific pay components, such as Bonuses etc.
- Non Taxable
Select the input type for the pay component. You can select between:
- Hourly Rate – If you select this option, you have to enter a multiplier amount for this type of pay component. – Available on Earnings, Deductions, Leave pay components.
- Fixed Amount – If the pay component will have a fixed amount for all employees, select this option. – Available on Earnings and Deductions pay components.
- Percentage – If you base this pay component on a percentage, you must specify on what other pay component the amount must be based on as well as the percentage of the pay component. – Available on Earnings and Deductions pay components.
- Amount – If you select this option, then you will have to add the amount per employee in the Pay Run view. – Available on Earnings and Deductions pay components.
- Unit – Enter an amount per unit if you select this option. When you process this on the Pay Run, you will have to add in the units. – Available on Earnings and Deductions pay components
- Transaction Category (Deduction Pay Component specific) – If you create a deduction component, you need to indicate whether or not the deduction is a Before tax deduction OR after tax deduction. These options are available on this field.
- Superannuation Contribution (Deduction Pay Component specific) – If you have any Superannuation before or after tax deductions, you need to select the Superannuation Contribution flag.
Note: This will make the Superannuation Fund field, to which this component should be linked available for selection. The Input Types available will only be Percentage and Amount when the Superannuation Contribution field is checked as true.
- Payment Summary Classification – Select the payment summary classification for this pay component type. This will indicate into which category the amounts should fall into on the Payment Summary.
Note: For Earnings, the following Payment Summary Classifications are available: Default (Gross), Allowances, CDEP Payments and Not Applicable.
For Deductions, the following Payment Summary classifications are available: Union/Professional Association Fees and Workplace Giving.
All leave types except unpaid leave is classified as Default (Gross) by the system.
- Leave Type (Leave Pay Component specific) – Leave components can be classified as the following leave types: Annual leave, Personal leave, Long Service leave, Paid Leave (other) and Unpaid Leave.
- Ordinary Time Earnings (Earning Pay Component specific) – If you check this check box, the pay component will form part of your ordinary time worked. This pay component will also be used in your leave and superannuation calculations, i.e. if you check this check box for an earning component, the component amount for the earning will be taken into account for the super guarantee contribution amount paid.
Click on the Save button to create the Pay Component.