The pay batch process involves a series of stages that affect how payees in a pay batch are paid. Each of the stages is described below.
Manual Items Stage
At this stage of the pay batch process the system automatically collates all interpreted timesheet items for all payees included in the pay batch based on the timesheets that are included in the pay batch.
At this stage you can also add manual items to the list of pay items that are included in the pay batch for any of the payees in the batch. Manual items are pay items that do not originate from a payee’s timesheets but are instead added into the pay batch manually to affect a positive or negative adjustment to a payee’s gross wage if necessary.
Leave Payments Stage
At this stage of the pay batch process the system automatically pays any paid leave that payees have taken during the corresponding pay period and increments the relevant payees’ taxable wages according to the leave payment amount.
The Leave Payments column on the Pay Wizard screen displays Yes for all payees who have received a leave payment in the pay batch.
At this stage you can also do the following:
adjust the payment rate and payment quantity of leave that has been paid in the pay batch
pay out the leave balances of payees who are eligible to receive payment in lieu of taking leave
cancel a leave payment that has been triggered and paid in the pay batch.
If a payee's leave payments are manually adjusted, the manual adjustments will be automatically reversed if the payee is paid in another pay batch for the same pay period. Therefore, in such situations you may need to reapply the manual adjustments.
The following applies to paying out payees' leave balances at the Leave Payments pay batch stage:
Only those leave types that have been configured to allow payout at the Leave Payments pay batch stage can be paid out. Leave types that must be paid out on termination of employment must be paid out at the Termination stage of the pay batch (for more information, see below).
The entitlement balance or the entitlement balance and the accrual balance are paid out, depending on how the corresponding leave type has been configured.
It is recommended that if the balance of a leave entitlement needs to be paid out because the payee's employment is being terminated, the leave should be paid out at the Termination stage of the pay batch and not at the Leave Payments stage. This ensures that leave Reset rules do not trigger and reset the leave balance to zero, thereby putting the payee's leave balance into negative after the payout, if the termination date is prior to the end date of the period being paid.
For more information about the Termination stage, see below.
When unused leave is paid out at the Leave Payments pay batch stage, the entire payout amount is automatically taxed by FastTrack360 as earnings for the current period. That is, the amount is not averaged out across the financial year and therefore a manual tax adjustment may be necessary at the Tax stage of the pay batch to prevent overtaxing of the leave payout amount.
The following applies to cancelling a leave payment at the Leave Payments pay batch stage:
pay items are automatically added to the payee’s pay items in the pay batch to negate the leave payment
the corresponding leave request in the Leave Module is automatically updated as follows:
its status changes to Cancelled
its payment state changes to Cancelled in Pay Batch.
Banked Leave Accrual Stage
The following occurs at this pay batch stage:
the system triggers accrual of leave types that have an apply to type of Hours with Rate (leave types that accrue leave hours and bank payment of those hours for when the leave is taken, such as Rostered Day Off leave)
the cost of the leave that has been accrued at this stage is calculated
payment for the number of hours of leave that has been accrued is negated from the gross earnings of each payee who has accrued leave at this pay batch stage
if a payee has received payment for leave at the Leave Payments pay batch stage but is ineligible to receive payment for the leave due to having an insufficient leave balance after accrual of leave at this pay batch stage, the system automatically removes the relevant pay item from the payee’s pay items
the payment rate for leave paid on a first in/first out basis, where the leave was accrued, taken and paid in the same pay batch, is calculated and the payment for such leave is automatically adjusted based on the accrual in the current batch.
At this stage you can adjust accrual hours and rates if necessary.
If a payee's banked leave accruals are manually adjusted, the manual adjustments will be automatically reversed if the payee is paid in another pay batch for the same pay period. Therefore, in such situations you may need to reapply the manual adjustments.
Leave Accrual Stage
At this stage of the pay batch process the system automatically calculates how much leave each payee in the pay batch, who is entitled to leave, has accrued during the pay period to which the pay batch corresponds. Where a payee has accrued leave during the pay period, the system updates the balance of the payee’s leave accrual accordingly.
Depending on the accrual rule applicable to a leave type, the accrual of leave can be triggered by processing of a pay batch or by the leave service. Only those leave types that are configured to accrue when a pay batch is processed are accrued at the leave accrual stage of the pay batch process.
The leave accrual and entitlement balances that are shown at this stage of a pay batch are accurate as of the current/open pay period, even if the pay batch that you are processing is an adjustment batch for a prior, closed period. This is because any adjustments made to a closed period are factored into the current period. For example, if a positive adjustment is made to a payee's earnings for a closed period the additional pay amount must be paid in the current period. Any additional leave accrual that may have been associated with the adjustment must likewise affect the payee's current leave balances.
Note also that leave types with an apply to type of Hours with Rate are accrued at the Banked Leave Accrual Stage (for more information, see above) and not the Leave Accruals stage.
At this stage you can also manually adjust the accrual and entitlement balances of any leave type to which a payee is entitled. This includes those leave types that are accrued as a result of the triggering of the leave service.
Termination Stage
This stage of the pay batch process allows you to terminate the employment of any payees in the batch whose employment has ceased.
To terminate a payee's employment you must specify the following information at the termination stage:
the date of termination
the reason for termination.
In addition to specifying the abovementioned information, you can also do the following at this stage:
pay out unused leave as a gross payment, Lump Sum A payment or a Lump Sum B payment
make lump sum payouts of accrued leave that is required to be paid out at termination (Lump Sum A and Lump Sum B)
make non-taxable Lump Sum D payments
make taxable and non-taxable employment termination payments (ETPs).
When leave is paid out at the Termination stage the entitlement balance or the entitlement balance and the accrual balance are paid out, depending on how the corresponding leave type has been configured in the Leave module.
When unused leave is paid out as a gross payment at the Termination pay batch stage, the entire payout amount is automatically taxed by FastTrack360 as earnings for the current period. That is, the amount is not averaged out across the financial year and therefore a manual tax adjustment may be necessary at the Tax stage of the pay batch to prevent overtaxing of the leave payout amount.
Gross Deductions Stage
At this stage of the pay batch process the system automatically deducts the relevant amount of money from the gross pay of each payee in the batch who is configured to have deductions taken from their gross pay.
At this stage you can manually adjust the deduction amount of a gross deduction that applies to any payee in the pay batch if necessary. You can also add one-off, ad-hoc deductions to deduct money from a payee's earnings even if a deduction has not been defined on the corresponding payee record.
Tax Stage
At this stage of the pay batch process the system automatically calculates and deducts the relevant amount of tax that the pay company is obligated to withhold from the payees’ pay based on their gross pay in the pay batch and the applicable tax scales.
A payee may have additional tax withheld from their pay in the form of deductions from their gross or net pay. At the Tax stage of the pay batch process, the system calculates and withholds only those tax amounts that an employer is normally obligated to withhold via the applicable tax withholding system. Any additional tax that a payee pays via a deduction from the their gross or net pay is calculated and deducted separately at the Gross Deductions and Net Deductions stages of the pay batch process respectively.
Tax is calculated and withheld from the pay of a payee at this stage of the pay batch process if the payee has a tax type of PAYG or the payee has a tax type of Company and is subject to voluntary withholding agreement.
At this stage you can also manually adjust the tax withholding amount of any payee who has tax withheld at the Tax stage if necessary.
Net Deductions Stage
At this stage of the pay batch process the system automatically deducts the relevant amount of money from the net pay of each payee in the batch who is configured to have deductions taken from their net pay.
At this stage you can also manually adjust the deduction amount of a net deduction that applies to any payee in the pay batch if necessary. You can also add one-off, ad-hoc deductions to deduct money from a payee's earnings even if a deduction has not been defined on the corresponding payee record.
GST Stage
At this stage of the pay batch process the system automatically calculates the Goods and Services Tax (GST) that is payable to payees whose earnings are subject to GST. A payee's earnings are subject to GST if the payee is an company contractor (i.e. has a tax type of Company) who is registered for the collection of GST. company contractors are deemed to provide a service to the employer by whom they are employed and, therefore, the employer is required to pay GST on their earnings.
If an company contractor has any deductions in the pay batch, the deducting of money by the employer is deemed to be a service that the employer provides to the company contractor. Therefore, the company contractor is liable to pay GST to their pay company for providing that service. In such circumstances, the system automatically subtracts the total amount deducted from the company contractor's gross and/or net earnings in the pay batch from their total earnings that are subject to GST. The system then calculates the GST liability on the reduced earnings amount so that the GST amount that is paid to the company contractor is reduced by a factor equal to the GST amount that the company contractor owes the pay company.
Wage Costs Stage
At this stage of the pay batch process the system automatically calculates the additional costs that apply to the earnings of each payee in the pay batch. These wage costs include the following:
employer superannuation
payroll tax
WorkCover.
At this stage you can also adjust the employer superannuation accrual balance of individual payees as well as trigger a one-off transfer of the balance of a payee’s employer superannuation accrual from one superannuation fund to another.
At the Wage Costs stage of the pay batch process, the system calculates and accrues employer superannuation only. Payee superannuation contributions, which are derived from deductions taken from a payee's gross or net earnings, are not included in the accrued superannuation amounts shown at the Wage Costs stage.
The following conditions apply to transferring accrued superannuation at the Wage Costs stage:
Only employer superannuation contributions (i.e. contributions accrued at the Wage Costs stage of a pay batch) can be transferred. If a payee requests to have their personal superannuation contributions paid to a different fund, their current payee superannuation deductions must be closed-off and new superannuation deductions must be created to reference the relevant superannuation fund.
A transfer can only be applied to superannuation contributions that have been accrued during a current, open contribution period; a transfer will not result in a rollover of paid contributions from one fund to another.
Transfers work on a one-off basis; any future accruals to the original fund will not be transferred automatically to the new fund in future pay batches. If a payee's employer superannuation contributions are to continue to be paid to the new fund in future pay batches, the payee's superannuation details on their Payee record must be edited such that superannuation is automatically accrued to the new fund instead of the original fund.
Employee Benefits
At this stage of the pay batch process the system automatically calculates the amount of employee benefits scheme contributions that each eligible payee has accrued in the pay period to which the pay batch corresponds.
At this stage of the pay batch process you can manually adjust the contribution accruals for each benefit type for which a payee accrued contributions in the pay batch. You can also manually add a benefit type that the payee did not accrue automatically in the pay batch and set the accrual balance for that benefit type.
Review Stage
At this stage of the pay batch process you can review the results of processing the pay batch. For example, you can view the amounts paid, accrued, deducted or costs incurred at each stage of the pay batch process for each payee.
At this stage you can also run a series of reports to double-check that there are no anomalies in the pay batch. For more information, see Payroll Reporting.