Earnings Pay Items represent payments made to the employee that are categorised as either a Gross Earning or a Taxable Allowance. PayHero includes a number of Earnings pay items by default as well as allowing you to create custom earnings pay items as required by clicking the button.
Creating an Earnings Pay Item
Regular Earnings pay items represent normal gross earnings based on hours worked. E.g. Ordinary Time, Salary etc.
When creating a custom regular earnings pay item, the Tax Type is set as Gross Earnings and Units are locked to Hours.
You can select the Rate Type as Normal, Second or Third. This designates which Pay Rate from the employee profile to apply when this pay item is attached to Work.
There is also the option to Track Balance which you can use if you're adding the pay item into an employee's Default Pay tab. You can tick this to designate the following:
Total - Tracks the total value paid out by the pay item (the dollar value).
Quantity - Will update the balance by the quantity of hours covered by the pay item.
You will be able to view the current balance from an employee’s Default Pay tab, on the pay line when running a pay, or through Insights Reporting.
Other Earnings pay items indicate Gross Earnings outside of normal hours based earnings e.g. Double Time, Back Pay, Annual Leave Cashed Up, etc.
When creating an Other Earnings pay item, the Tax Type is set at Gross Earnings. You can designate Units to be Hours for an hourly rate, $ for a dollar value or Other to designate a Piecemeal Rate such as per box or litre.
The Rate Type can be set to an employee’s Normal, Second or Third Rate or you can set a fixed or variable rate. If the rate is set as Variable, you'll be able to adjust rate and quantity values when applying the pay item into a draft pay.
Selecting hours as the unit will also display the Salary Timesheet Hours option. For more information on this, view our support article on Recording Time for Salaried Employees.
The Other Earnings pay items also have the same option to Track Balance.
Bonus pay items can be assigned to process payments outside Regular and Other earnings. The Tax Type is set to Taxable Allowances. There are three preset in your account: Commission, One-Off and Regular.
When creating custom Bonus pay items, you can set Spans Multiple Pay Periods to change how the tax rates are calculated as well as the same Track Balance option.
Discretionary payments are payments made to an employee outside of any obligation under an employment agreement. This could be something such as a company having a successful year and deciding to give their employees a discretionary bonus - but they do not regularly do so. These are not considered part of an employee's gross earnings and you can find out more about these payments on MBIE's Website.
Leave earnings are permanently set and you cannot create your own pay items under this category. See our Annual Leave Rates article for more information about the rate calculation for Annual Leave payments or our article on Other Leave Rates for DBAPS Leave rate calculations.
These pay items can be assigned to Leave Types for paying out leave at the correct rate.