Allowance/Deduction Classification Codes

This enables the Notional Benefits for Salary Package.

An A/D Code with this Classification is defined as a dollar that will not affect Gross, Tax, Net, or Superannuation calculations nor PTD/YTD Earnings.

The Taxable allowance is added to the gross pay before tax is calculated and is taxed over one pay period.

The Non-Taxable allowance is added to the net pay and is not included in tax calculations.

• The Before Tax Deduction is deducted from the Gross Pay before tax is calculated.
• This classification is used for Workplace Giving donations. The deduction is made before tax is calculated but the amount deducted is included in the Total Gross amount on the employee's Payment Summary. To use this facility the Payment Summary Print flag must be set to 'A.'
• This classification can also be used for other payroll component deductions such as Superannuation.
  If used for deductions other than Workplace Giving, the Payment Summary Print flag must be set to '0' (zero).

 

Using Classification 3 with Direct Bank Credit Banking options

This deduction is taken from gross pay before tax is deducted. The value can then be passed directly to a bank account. For this type of deduction to be included as a direct bank credit, the Allowance/Deduction is entered into two areas of the employee's file:

• Salary window - Standard Allowance/Deduction where details about the amount of the deductions are entered .
• Bank Details window - Details of the Bank account that deductions are credited.

Allowances are not catered for directly. To pay an allowance into a bank account, you need to first pay the allowance to the employee, then use an appropriate deduction code to place the amount in the EFT file.

 

The After Tax Deduction is deducted from Gross Pay after tax has been calculated and deducted.

 

Using Classification 4 with Direct Bank Credit Banking options

This classification reduces the employee's net pay value shown on the pay slip by the deduction amount, and is often used for health insurance payments. For this type of deduction to be included as a direct bank credit, the Allowance/Deduction is entered into two areas of the employee's file:

• Salary window - Standard Allowance/Deduction; where details about the amount of the deductions are entered .
• Bank Details window - Details of the Bank account that deductions are credited.

In the Allowance/ Deductions field on the Bank Details window, if the Classification is '4' (for Deduction) but the Deductions in the Salary Standard Allowances/Deductions window is omitted, Preceda will automatically add an entry.

 

Use for paying a living away from home allowance

Used for non-paid additions used for tax purposes.
This is not a meal allowance or tea money paid as a result of overtime.

Used for non-paid additions for tax purposes

This deduction is calculated on the % calculation based on Net Pay prior to any other After Tax Deductions but after All Tax and Extra Tax Deductions. Classification '8' Deductions will occur prior to any other after tax deduction priorities indicated.

Refer to the Taxation Office for the components of this item. This classification is used for the Gross Amount of a Lump Sum A.

Refer to the Taxation Office for the components of this item. This classification is used for the Gross Amount of a Lump Sum B.

Refer to the Taxation Office for the components of this item. This classification is used for the Gross Amount of Eligible Termination Pay

Used for the tax calculated on the C Classification

Used for employees who request extra tax to be taken out of their pay. This value is added to the normal tax deducted for the period. It is used for the deduction of HELP, SFSS as well as extra tax.

Used for the payment of FID allowances to employees. FID is calculated on the employee's net pay. The FID allowance calculated is then included in the next payrun as a taxable addition. FID tax is not currently applied.

Used for the total due on termination owing for leave accrued after 17th August 1993.

Used for the taxation component of the total due on termination owing for leave accrued after 17th August 1993.

Refer to the Taxation Office for the components of this item. This is the non-taxable component of Eligible Termination Pay.

Used only for splitting an employee's pay between bank accounts without affecting the actual net earnings value. It can be allocated to an employee only through the employee Bank Window.

User Classification K with Direct Bank Credit Banking options

 This classification is specifically designed for splitting the employee's net pay into different bank accounts. The employee's net pay value shown on the pay slip is unaffected by this deduction and is entered only in the employee's Bank window.

The K classification is only used if an employee's net pay is credited to a bank account and should not be used in combination with different pay methods such as cheque or cash.

• Do not use a combination of 4 and K classifications as the employee' s net pay figure will not balance.
• The K classification should not be used where an employee's pay is paid by two or more different pay methods (e.g. where part of an employee's pay is credited to bank accounts and the remainder is paid by cheque).

 

Values entered on codes using this classification are checked against the Holiday Loading Tax Exempt figures on the Dependant Rebates window. Any amount in excess of the exempt figure is taxed at the normal rate.

This classification is for a deduction to be taken from the employee's pay in cash. The cash amount of the deduction would be included in the coinage analysis reports. The normal pay method for the employee would not be cash.

 

The employer contributions are set at a fixed amount and is given each time the employee is paid.

This classification is also used for the code used to allocate shortfalls in the Superannuation Guarantee Charge.

• Special rules which apply to the year end resetting of Allowance/Deduction Codes with this classification.
• If all fields Units, Amount and Contract Amount are zero AND the Reference field is blank, the record will be deleted.
• If any one of the three numeric fields is not zero or the Reference field is not blank, the figures will be reset for the new financial year, but NOT deleted.

 

Using Classification N with Direct Bank Credit Banking options

This classification is used for allocating shortfalls in the Superannuation Guarantee Charge and can then be passed directly to a bank account. The employee's net pay is not affected.

In order for this type of deduction to be included as a direct bank credit, Allowance/Deduction Codes must be entered into two areas of the employee's file.

• Salary window - nominate the Allowance/Deduction codes.
• Bank Details window - nominate the Allowance/Deduction codes.

 

Used only for one-off allowances, such as a bonus. Allocated to an employee only through Time Entry, it is taxed according to the entry made in the OTP Weeks for Tax Calculations field. This is in accordance with the ATO NAT7905 and NAT10146.

The employee contribution is calculated as a percentage of the actual gross earnings. If you choose to use a code with this classification you must also identify the Hours Types and the Allowances and Deductions to be included in the gross earnings. The calculation of actual earnings is based on the Hours Types and Allowance/Deduction records which have been flagged to be included in superannuation gross or by Linked Earnings.

 

Using Classification P with Direct Bank Credit Banking options

 This calculates employee contributory superannuation. This value can then be passed direct to a bank account and serves the same purpose as a deduction with a classification of 4. For this type to be included as a direct bank credit, the Allowance/Deduction must be entered into two areas of the employee's file.

• Salary window - nominate the Allowance/Deduction Codes.
• Bank Details window - nominate the Allowance/Deduction Codes.

 

The employee's annual superannuation gross has been entered in the Superannuation windows and may be different from the actual gross earnings.

• Special rules which apply to the year end resetting of Allowance/Deduction codes with this classification
• If all fields Units, Amount and Contract Amount are zero AND the Reference field is blank, the record will be deleted.
• If any one of the three numeric fields is not zero or the Reference field is not blank, the figures will be reset for the new financial year, but NOT deleted.

 

Using Classification Q with Direct Bank Credit Banking options

This calculates non-contributory superannuation. This value can then be passed direct to a bank account. The employee's net pay is not affected. For this type of deduction to be included as a direct bank credit, the Allowance/Deduction must be entered into two areas of the employee's file.

• Salary window - nominate the Allowance/Deduction Codes.
• Bank Details window - nominate the Allowance/Deduction Codes.

 

The employee's annual superannuation gross has been entered in the Superannuation windows and may be different from the actual gross earnings.

 

Using Classification R with Direct Bank Credit Banking options

 This calculates employee contributory superannuation. This value can then be passed direct to a bank account and serves the same purpose as a deduction with a classification of 4.

For this type of deduction to be included as a direct bank credit the Allowance/Deduction must be entered into two areas of the employee's file.

• Salary window - nominate the Allowance/Deduction Codes
• Bank Details window - nominate the Allowance/Deduction Codes.

 

The employer contribution is calculated as a percentage of the actual gross earnings or defined in the Linked Earnings records. If you choose to use a code with this classification you must also identify the Hours Types and the Allowances and Deductions to be included in the gross earnings.

The calculated Superannuation amount is not included in the employee's gross, tax or net pay calculations.

This classification is also used for the code for Occupational Superannuation.

• Special rules which apply to the year end resetting of Allowance/Deduction codes with this classification.
• If all fields Units, Amount and Contract Amount are zero AND the Reference field is blank, the record will be deleted.
• If any one of the three numeric fields is not zero or the Reference field is not blank, the figures will be reset for the new financial year, but NOT deleted.

 

Using Classification S with Direct Bank Credit Banking options.

 This calculates non-contributory superannuation value which can be passed directly to a bank account. The employee's net pay is not affected. For this type of deduction to be included as a direct bank credit the Allowance/Deduction must be entered into two areas of the employee's file.

• Superannuation window - nominate the Superannuation Allowance/Deduction Codes.
• Bank Details  window - nominate the Allowance/Deduction Codes.

 

Used on the code for the payment of BAD tax allowance to employees. BAD tax allowance is calculated on the employee's net pay. This calculation is then added to the employee's gross pay as a taxable allowance in the next pay run.

Used fro a Salary Sacrifice item. It is similar to Classification 3 but Classification U will be passed to the Salary Package in the Remuneration module.

Used on the code for salary sacrifice as a percentage of Linked Earnings or gross earnings.

 

Using Classification V with Direct Bank Credit Banking options.

This deduction is taken from gross pay before tax is deducted. The value can then be passed directly to a bank account. For this type of deduction to be included as a direct bank credit the Allowance/Deduction must be entered into two areas of the employee's file.

• Salary window - nominate the Allowance/Deduction Codes.
• Bank Details window - nominate the Allowance/Deduction Codes.

 

This classification allows for a salary sacrifice to be calculated before tax deductions as a % of the annual super gross. The calculation is a % based on the Annual Super Gross field as defined on the Employee's Superannuation window.

The resulting amount is deducted from the employee before tax calculations are performed as per Classification U and V amounts.

This is a before tax allowance.

Hours Type Codes and/or Allow/Deduct Codes must be defined to be included in the Gross figure used in these calculations using the Linked Earnings window or the Hours Type Codes/Allow/Deduct Codes window.

Calculation is a % calculation based on Linked Earnings or Gross. If Linked Earnings are not setup for the Allow/Deduct Codes, Preceda will include any Hours Type Codes or Allow/Deduct Codes that are flagged to Include in Super Gross on the Hours Type Codes/Allow/Deduct Codes window. Once the amount of the allowance has been determined, the Allow/Deduct Code will be included in the Taxable Gross figure as with Allow/Deduct Code Classification 1.