Bill Oncost Maintenance

Bill oncosts are additional costs that an agency incurs as a result of supplying staff and services to a client, whereby these additional costs are passed onto the client. Examples of oncosts that may be billed to a client include insurance and administration costs.

Bill oncosts are applicable to pay-dependent bill agreements only. One or more bill oncosts can be linked to any pay code. When a pay code is passed to the bill agreement interpretation process, any oncosts linked to that pay code are added to the bill rate calculation. Therefore, the bill oncost is included in the final bill amount for which the client is invoiced.

Within Rates and Rules, bill oncosts are defined by creating an oncost header and one or more oncost rates.

Each oncost rate has a validity period that defines the period of time within which the rate that it defines applies.

An oncost rate must be assigned to a level of the agreement hierarchy and a hierarchy value at the selected hierarchy level. This defines to what the oncost rate is applicable. For example, an oncost rate assigned to the payee John Smith at the payee level of the agreement hierarchy will be valid only for those job orders that are filled by the payee John Smith. For each oncost, only one oncost rate can be valid, according to its validity period, for each hierarchy level/hierarchy value combination at any given time.

An oncost rate must define the applicable rate at which the oncost is applied. The following rate types are supported:

• a percentage (for example, an oncost rate of 10% means that a pay oncost equal to 10% of a payee's gross pay is applicable)

• a fixed monetary amount (for example, an oncost rate of $2.50 means a $2.50 oncost is applicable).

Each oncost rate belonging to an oncost header must be assigned to a level of the agreement hierarchy and a hierarchy value. This defines what each oncost rate applies to. Where valid, applicable oncost rates exist at different levels of the agreement hierarchy, Rates and Rules applies the rate that is found at the lowest possible level of the hierarchy. For example, if there is an oncost rate defined for the payee who has filled the corresponding job order, that oncost rate will be applied instead of an oncost rate defined at the country or job order level of the agreement hierarchy.

Each oncost rate can be linked to one or more other oncost headers. This allows an oncost rate to be applied on top of other oncost rates.

AU Payroll - WorkCover Oncosts

A WorkCover AU flag can be enabled on a bill oncost that is assigned to the country of Australia. One bill oncost must be created with this flag if WorkCover premium oncosts are to be passed onto clients.

Where the WorkCover AU flag is enabled on a bill oncost, no oncost rates can be defined on the bill oncost itself. Instead, the bill oncost acts as a trigger for the system to calculate a bill oncost based on the WorkCover rate that applies to the WorkCover code selected on the job order to which an interpreted timesheet belongs.

Bill Oncost Rate Validity

 Bill oncost rates have a validity period that determines the rate that is applicable at any given time. When an item that is subject to a bill oncost is billed, the bill oncost rate for that item is determined by the rate that is valid for that bill oncost on the item date.

 That can have implications when, for example, passing on statutory costs that take effect as of a given pay date. For example, for Australia the rate at which compulsory employer superannuation contributions accrue are based on the date on which a payee is paid. If there is a legislated increase to the superannuation accrual rate, that increase usually takes effect from the start of a new tax year (1 July). However, the last pay period that starts within a given tax year may be paid on a date that falls into the next tax period, thereby requiring superannuation to be accrued at the higher rate. If a new bill oncost rate is configured to take effect on the day the new tax year begins, some or all items paid for the last period of the old tax year may be billed using the old oncost rate instead of the new oncost rate despite being paid in the new tax year because the oncost rate is based on the item date and not the payment date.

 Therefore, it is important to take that into considerations when setting a validity start date to affect a bill oncost rate change. That is, if the last pay period that commences in the old tax year will be paid in the new tax year you may want to set the validity start date of the bill oncost rate to match the start date of that last period of the old tax year. Alternatively, you may want to align the validity start date of the new bill oncost rate to the start date of the first full period of the new tax year. How you choose to do this can depend on considerations such as the following:

• your bill agreements with your clients

• the alignment of pay cycles for different pay groups in which payees are payrolled.