Create and manage Pay Categories

Pay Categories are used to define the rates that employees are paid. Setting up your pay categories will help simplify the management of employee pay rates by: 

• Automatically calculating linked rates through loading and penalty rate multipliers (e.g. Overtime + Weekend)
• Configuring super rates
• Configuring leave accrual
• Making allowances STP compliant

 Create a Pay Category

1. Go to Payroll, then select the Payroll Settings tab.
2. Select Pay Categories (located under Pay Run Settings), Then select Add on the right side of the screen.
3. Name the pay category, then select Save.
4. Complete any relevant fields, then select Save.  

Notes: 

• Rate Loading - this is loading that is applied on top of the base rate that the pay category is linked to. For example, if you have a base rate of $20 and set a rate loading of 50%, then the linked rate will be $30 (base of $20 + $10 rate loading).
• Penalty Loading - this is penalty loading that applied on top of the base rate and the rate loading. 
• Payment Summary Classification - this is used for pay categories that need to be reported separately on an employee's payment summary or income statement. You can find more information about this in the following article: Configuring Allowances settings for STP reporting
• Rate Precision - You can set the rate at between 0 and 5 decimal places (e.g. if you set it to 4 decimal places you rate could display as ($28.4325).   

Create a Linked Pay Category

In addition to standard pay categories, you can also create linked categories. For example, a pay category could have the base rate of Part-time weekdays but have linked categories of Part-time Saturday and another one for Part-time Sunday.

When a pay category is linked to a base pay category, you only need to specify the base rate for the employee and the rate for the linked pay categories will be automatically calculated.

To create a linked pay category:

1. Go to Payroll, then select the Payroll Settings tab.
2. Select Pay Categories (located under Pay Run Settings).
3. Select the Pay Category you wish to link, then select Add Linked Category.
4. Name the linked category (e.g. Casual - Saturday).  
5. Complete the relevant fields (e.g. Rate Loading, Accrues Leave, PAYG Exempt etc), then select Save. 

_{Content sourced from} Employment Hero