Process special pay items like living-away-from-home allowance

Pay an employee an amount through payroll that won't appear on their annual payment summary and is not subject to PAYG.

Before you start

If the payment is already included in the employee's ordinary earnings, you don't need to create a new earnings type. For example, if the employee's earnings are $10,000 ordinary, including the tax-free component, you only need to create the deduction. If the employee's earnings are $8,000 ordinary, plus a $2,000 tax free component, create a new earnings type for the $2,000.

Create an earnings type

  1. In the Settings menu, select General Settings.
  2. Under Features, click Payroll Settings.
  3. Click the Pay Items tab.
  4. Click Earnings from the left, then Add and select Ordinary Times Earnings.
  5. Name the earnings type.
  6. Select a Rate Type and an Expense Account.
  7. Enter any additional information depending on the rate type.

    Do not select 'Exempt from PAYG Withholding' or 'Exempt from Superannuation Guarantee Contribution'.

  8. Click Add.

Create a deduction type

  1. In the Settings menu, select General Settings.
  2. Under Features, click Payroll Settings.
  3. Click the Pay Items tab.
  4. Click Deductions from the left, then Add and select the deduction type.
  5. Name the deduction.
  6. Select a liability account.
  7. Select the Reduces PAYG Withholding checkbox.

    If Superannuation Guarantee (SG) contributions are not applicable on this item, select the Reduces Superannuation Guarantee Contribution checkbox.

  8. Click Add.

Create a reimbursement type

  1. In the Settings menu, select General Settings.
  2. Under Features, click Payroll Settings.
  3. Click the Pay Items tab.
  4. Click Reimbursements from the left, then Add.
  5. Name the reimbursement and select an account.
  6. Click Add.

Enter new pay items into the employee's pay template

If you want to use the special pay items regularly, add the pay items in the employee's pay template.

If it's a one-off payment, enter it on the payslip.

Process a pay run