AU Payroll - Employee Benefits Maintenance

Payees in Australia who work in certain industries or who are subjects to certain industrial awards can be entitled to additional benefits paid on their behalf by their employer. These are known as employee benefits and may include the following:

• portable long service leave

• redundancy

• income protection

• training levy

• portable sick leave.

The system administrator links the available benefit types to the pay agreements to which the benefits apply. Before a job order is submitted to timesheet, an agency user selects the pay agreement that applies to the job order. The benefit types that are linked to the agreement, if any, determine the benefits that the payee can accrue on the job. The job order agency user must select a rate rule that defines the rate at which the payee is to accrue contributions for each of the benefit types linked to the applicable agreement. It is also possible for payroll staff to manually add or adjust an employee benefit contribution accrual at the Employee Benefits stage of the pay batch process.

If a payee is eligible to receive employee benefits, the name of the benefit scheme administrator and the member number by which the scheme administrator identifies the payee must be defined on the payee record.  These details allow the system to accrue the relevant benefit contributions when the payee's pay is processed, allow the pay company to identify the amount of contributions that have been accrued on the payee's behalf and allow the pay company to identify the benefits scheme administrator to whom the contributions are to be paid. 

The benefit types, periods over which the benefits are accrued, the valid scheme administrators and the rates at which the benefits are configured by a system administrator in the Portal > Pay > Maintenance > Employee Benefits area. Specifically, employee benefits maintenance is divided into the following areas:

• Benefit Types

• Contribution Payment Periods

• Scheme Administrators

• Benefit Type Rate Rules

• Links to Agreements

Each of these areas is described below in detail.

Benefit Types

A benefit type defines the name of an employee benefit that can apply to payees. A separate benefit type record should be created under Payroll > Maintenance > Employee Benefits > Benefit Types for each type of employee benefit that payees, who are employed by pay companies belonging to your business, are entitled to receive under an industrial award or agreement. For example, if payees are eligible to accrue income protection and a training levy, a separate benefit type must be created for income protection and the training levy respectively.

When adding a scheme administrator to the system, you must select the benefit types that are administered by that scheme administrator. Therefore, the relevant benefit types must be created before you attempt to add scheme administrators.
For more information, see How to Create a Benefit Type.

Contribution Payment Periods

Employment benefits accrued on behalf of payees are required to be paid to the relevant benefit scheme administrator at regular intervals. To allows calculation and reporting of employee benefits, contribution payment periods must be configured under Payroll > Maintenance > Employee Benefits > Contribution Payment Periods.

 Each contribution payment period defines the following information:

• the contribution frequency (quarterly, monthly, calendar month, every two months)

• the start and end date of each contribution period

• the payment cut off date that specifies the last date on which contributions for the corresponding period must be paid to the relevant fund.

When a benefit scheme administrator is created in the system, a contribution payment period must be selected to determine how often payments must be made to that scheme administrator. Therefore, contribution payment periods must be created before adding scheme administrators.

For more information, see How to Create a Contribution Payment Period.

Scheme Administrators

Each organisation that administers employee benefit schemes must be added as a scheme administrator under Payroll > Maintenance > Employee Benefits > Scheme Administrators. Once created in the system, the scheme administrators can be selected in the following areas within the Pay Module:

• on the employee benefits scheme details on payee records, to define the scheme administrator to which payees' accrued benefits are paid

• on the employee benefits scheme details on pay company records, to allow grouping of accrued benefits contributions by scheme administrator on the Employee Benefits report.

The following information is captured in the system about each scheme administrator:

• name of the administrator

• contribution payment period that defines how often accrued benefit payments are made to the administrator

• benefit types administered by the administrator

• Australian Business Number (ABN) of the administrator

• contact details and mailing address of the administrator

• banking details that identify the administrators bank account into which accrued benefit payments are made.

The name, contribution payment period and applicable benefit types are mandatory. The remainder of the information listed above is optional and is stored in the system for information purposes only.

For more information, see How to Create a Scheme Administrator. 

Benefit Type Rate Rules

Benefit type rate rules must be configured under  Payroll > Maintenance > Employee Benefits > Benefit Type Rate Rules to determine what earnings are subject to employee benefit accruals and the rate of the accruals.

To create a benefit type rate rule you must specify the following:

• the benefit type and scheme administrator to which the rate rule applies

• the pay code group that defines the earnings on which the benefit type is calculated

• the contribution basis, which can be one of the following:

  • percentage - contributions are accrued based on a percentage of a payee's earnings

  • fixed - contributions are accrued as a fixed amount per pay period, week, day worked or hour worked

  • greatest amount - contributions are accrued as a percentage of a payee's earnings or as a fixed amount, depending on whichever amount is greatest for the pay period, week, day worked or hour worked.

A different pay code group and accrual rate can be defined on a single benefit type rate rule for different periods. The system accrues based on the relevant set of earnings and at the appropriate rate based on the validity period of each set of rates.
Benefit type rate rules must be configured before links can be created to pay agreements.

Rate rules can be configured to apply to job orders that are subject to agreement rates only, job orders that are subject to standard rates only or to any job orders regardless of the applicable rate type.

For more information, see How to Create a New Benefit Type Rate Rule.

Links to Agreements

Pay agreements must be linked to benefit rate type rules so that the relevant employee benefits can be accrued at the appropriate rate when a specific pay agreement applies to a job order. Multiple benefit type rate rules can be linked to an agreement and a different set of benefit type rate rules can be defined for different validity periods. The relevant pay agreements must be created in Rates and Rules before links can be created.

For more information, see How to Link Employee Benefits to an Agreement.

Accrual of Employee Benefits when Payees Work Multiple Jobs

If a payee works multiple jobs during the same period and the jobs are all subject to the same pay agreement, which is linked to a benefit rate rule, the following will apply:

• if the benefit rate rule contribution basis is fixed per period, the payee accrues the benefit once per period

• if the benefit rate rule contribution basis is a percentage of earnings, the payee accrues the benefit each time they are paid.

If a payee works multiple jobs during the same period and the jobs are subject to different pay agreements, which are linked to the same benefit rate rule, the payee will accrue the benefit once per job/agreement combination.