Manage Earning items

Earning items

Reckon payroll has seven pre-configured earning items for you to use in your pay runs. To view these earning items go to the Settings menu and select Earning items.

Earning items

You can edit any of these items by selecting an item and pressing Edit. Depending on the item only certain fields can be modified.

Adding an Earning item

To add additional Earning items:

  1. Open the Settings menu
  2. Select Earning items
  3. Push the + button
  4. Select the Earning type
  5. Complete the required fields (see below)
  6. Select Done.
New earning item
Ordinary time earnings (OTE)

Ordinary time earnings (OTE) earning items are used for paying an employee their wage or salary for ordinary hours worked.

When adding an Ordinary time earnings (OTE) earning item you will need to enter the Earning item name, the Pay rate basis, and select an Expense account.

Ordinary time earning (OTE)

You can also select the item to be Included in time worked leave accruals, if the item is Tax applicable and the calculation method, and Superannuation preferences.

Overtime

Overtime earning items are used for the paying an employee for extra time worked. When included in an employees pay items it will multiply their hourly or base rate of pay by the set rate multiplier to calculate their overtime pay.

When adding an Overtime earning item you will need to enter the Earning item name, Rate multiplier, the Pay rate basis, and select an Expense account.

Overtime

You can also select the item to be Included in time worked leave accruals, if the item is Tax applicable and the calculation method, and Superannuation preferences.

Variable

Variable earning items are used for the payment of earning such as bonuses, commissions, and director fees.

When adding a new Variable earning item you will need to enter the Earning item name, the Pay rate basis, and select an Expense account.

To help you prepare for the introduction of Single Touch Payroll 2 we have added the option to select the STP Phase 2 earnings type when creating aVariable earning item. This field is not compulsory, but if you decide not to enter STP Phase 2 earnings type now you will need to come back and update the item before you make the switch. Prepare Earnings for Single Touch Payroll Phase 2 - mobile app has a step by step guide on how to update Variable earning items before switching to STP Phase 2.

You can also select the item to be Included in time worked leave accruals, if the item is Tax applicable and the calculation method, and Superannuation preferences.

When adding a Bonuses and commissions you can use the Tax applicable option to indicate which method you will be using to calculate the additional withholding amount. You can select from Method A, Method B (i) or Method B (ii) of Schedule 5 - Tax table for back payments, commissions, bonuses and similar payments for tax calculation. See Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments on the ATO website for further information on which is the correct method for your earning item.

Termination

Termination earning items are used when an employee's employment has ceased. They are usually only used during the employee's final pay.

When adding a new Termination earning item you will need to enter the Earning item name, select an Expense account, and the Termination type.

The following termination types can be selected:

  • Payment on death of employee
  • Genuine redundancy payment or approved early retirement scheme payment
  • Compensation for unfair dismissal, harassment or discrimination
  • Invalidity
  • All other termination payments
Termination pay item

You can also select the if the item is to be Included in time worked leave accruals, and Superannuation preferences.

Deactivating an earning item

Earning items that are assigned to any employee as part of their Pay set up cannot be made inactive

Deactivating an Earning item is completed the same way for all earning types:

  1. Confirm the Earning item has been removed from the Pay set up of all employees
  2. Open the Settings menu
  3. Select Earning items
  4. Select the Earning item to make inactive
    Earning item
  5. Toggle off Enable item
    Inactive earning item
  6. The Earning item will be listed under the Inactive tab
    Inactive earning items

Reactivating an earning item

Reactivating an Earning item is completed the same way for all earning types:

  1. Open the Settings menu
  2. Select Earning items
  3. Open the Inactive tab
  4. Toggle on Enable item
  5. Earning item will return to the Active tab

Deleting an earning item

Earning items that are assigned to any employee as part of their Pay set up cannot cannot be deleted.

Deleting an Earning item is completed the same way for all earning types:

  1. Confirm the Earning item has been removed from the Pay set up of all employees
  2. Open the Settings menu
  3. Select Earning items
  4. Select the Earning item to delete
  5. Select Edit
    Earning item with STP Phase 2 earning type (optional) field
  6. Select Delete item
  7. Select Delete to confirm
    Confirm deletion of earning item


Need more help?

Ask the Reckon Community at: https://community.reckon.com/categories/payrollapp

Or Log a Support Ticket: https://www.reckon.com/au/support/

How did we do?

Reckon Payroll: Manage superannuation funds

Manage Leave items

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