Understanding Employee
Entitlements using MYOB software
copyright © Veechi Curtis
www.veechicurtis.com.au
© Veechi Curtis
Understanding Employee Entitlements using MYOB software
1
Table of Contents
UNDERSTANDING LEAVE ENTITLEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
What kinds of leave are employees entitled to? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
How much annual leave are employees entitled to? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
How long does an employee have to work before they’re entitled to annual leave? . . . . . . . . . . . . . . . . . . . . .4
How much personal leave are employees entitled to?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
What about long service leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
SETTING UP ENTITLEMENTS IN MYOB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
How do I set up MYOB software to track employee leave due? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
How do I change or delete an entitlement category? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
What about leave that was due to an employee before I started with MYOB? . . . . . . . . . . . . . . . . . . . . . . . . . . .8
CALCULATING LEAVE ENTITLEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
How do I calculate employee entitlements on a fixed number of hours per pay period? . . . . . . . . . . . . . . . . .9
How do I calculate employee entitlements on a percentage basis? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Do I need to accrue long service leave entitlements? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PAYING EMPLOYEE LEAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
How do I record payments for annual leave?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
What happens if an employee receives holiday pay in advance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
What about leave loading? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
What if an employee asks to cash out their annual leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
What happens with public holidays? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
How do I record payments for personal or carer’s leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Can I pay more holiday or personal leave than the employee is due? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
How do I record the payment of long service leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CATERING FOR RDOS AND OTHER TYPES OF LEAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
How do I track entitlements for rostered days off? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
How do I pay RDOs? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Can MYOB software track time-in-lieu? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
What about compassionate leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
REPORTING FOR EMPLOYEE ENTITLEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
How can I see how much holiday or personal leave employees are due? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
How can I check whether the leave report is correct? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
How do I fix it if the amount of leave showing for an employee is wrong?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Why doesn’t holiday or personal leave show up on my payslips? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
MAKING PROVISIONS FOR LEAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
How do I make provisions for leave in my Balance Sheet? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Can I make leave provisions on a continual basis?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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PARENTAL LEAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
How do I know if an employee is eligible for Parental Leave Pay? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Do I get reimbursed in full for Parental Leave Pay? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
How do I set up Parental Leave Pay in MYOB? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
How do I record the payment of parental leave? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
What about receiving the payments from Centrelink?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
What happens after the 18 weeks have finished? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Do I include Parental Leave Pay on payment summaries? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
© Veechi Curtis
Understanding Employee Entitlements using MYOB software
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Understanding Employee Entitlements
Tracking employee holiday and personal leave is one of the trickiest aspects of managing payroll.
You’ve got to figure out what kind of leave each employee is entitled to receive, when they
should receive it, whether the award includes any quirks or perks and much more besides.
You’ll find it makes sense to track leave entitlements using MYOB software so that at any
time you can see how much leave you owe your employees. You can include this information
on employees’ payslips so that at any time you can pull up a complete record of leave taken
by each employee.
The secret to tracking leave has two simple ingredients. The first is to set up your entitlement
categories carefully, making sure they fit your business. The second is to keep reports of all
leave taken for every employee.
Golden rule
Always document all annual and personal leave taken, printing a separate report for each
employee at the end of each year.
With your end-of-year leave reports, always give one copy to the employee and keep a copy
for yourself in your employment archives. That way, if an employee ever disputes the amount
of leave you owe them, you’re able to pull out a complete record of all leave taken since they
commenced employment with you.
To make sure you get these reports just right, this document explains the basics step by step.
You’ll also find out about how to deal with the more tricky types of leave, such as rostered days
off, time-in-lieu and long service leave.
By the way, this document uses the words entitlements and leave interchangeably (although you’ll
find that MYOB software mostly uses the word ‘entitlements’). Also, the term personal/carer’s leave
is used instead of sick leave in accordance with the latest National Employment Standards.
Understanding Leave Entitlements
From 1 January 2010, all employers in ACT, New South Wales, Northern Territory, Queensland,
Tasmania and Victoria fall under special federal legislation called the National Employment
Standards (NES), as do all companies in Western Australia. Sole traders and partnerships in
Western Australia still fall under state legislation.
To view more information regarding the National Employment Standard, and how the National
Employment Standards affect leave entitlements for employees, visit to www.workplace.gov.
au.
What kinds of leave are employees entitled to?
Under the National Employment Standards, permanent employees (full-time and part-time)
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are always entitled to annual leave, personal/carer’s leave and, after a certain period of time,
long service leave. (Personal/carer’s leave is the new term for sick leave.) Depending on their
award, employees may also be entitled to rostered days off, study leave or time-in-lieu.
Casual employees aren’t usually entitled to any leave entitlements at all, although they may be
entitled to long service leave if they are employed for 10 years or more.
How much annual leave are employees entitled to?
The National Employment Standards provide for four weeks (that’s 20 days) of annual leave
per year for every full-time employee. However, remember that four weeks per year is the
minimum amount of leave employees are entitled to. Employees may be entitled to more than
four weeks annual leave in two situations:
t Where a full-time employee does shift work where shifts are continuously rostered 24
hours a day for seven days a week, and the employee is regularly rostered to work these
shifts. In this situation, the employee is entitled to a minimum five weeks leave per year.
t If the employee’s award specifies that the employee is entitled to more than four weeks
per year.
By the way, you can view a very silly (but educational) video that explains annual leave by
visiting http://www.xtranormal.com/watch/7181335/.
Tip
The National Employment Standards specifies minimum working conditions for
Australian employees. However, individual awards often offer better conditions than this
minimum. For example, an award could say that an employee is entitled to six weeks
annual leave per year, or three weeks personal leave per year. You need to meet both
the minimum requirements of the National Employment Standards and the award,
whichever is the greater in each instance.
How long does an employee have to work before
they’re entitled to annual leave?
Under the National Employment Standards, permanent employees (as opposed to casual
employees) start accruing annual leave from the moment they start work. So, if an employee
is entitled to four weeks’ leave per year and they want to take annual leave after three months,
they can. (After three months, this employee would have accrued one week’s worth of leave.)
Some additional comments:
t You can’t unreasonably refuse to agree to an employee’s request to take annual leave.
t There’s no minimum or maximum amount of annual leave that employees must take at a
time. So, if an employee asks to take one day’s annual leave, you must agree unless there’s
a legitimate reason for you to refuse.
t Any leave that an employee hasn’t used up at the end of a year automatically carries
forward to the next.
t If an employee builds up more than two years’ worth of annual leave (for example, if an
employee who normally receives four weeks’ leave per year has more than eight weeks’
accrued), then you can direct this employee to take up to one quarter of their leave
balance.
© Veechi Curtis
Understanding Employee Entitlements using MYOB software
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How much personal leave are employees entitled to?
Under the National Employment Standards, all employees, with the exception of casuals, are
entitled to receive personal and carer’s leave.
The Standards specify that the minimum entitlement for an employee each year is 10 days of
combined personal and carer’s leave. However, remember to check your employees’ awards as
well, in case an award specifies that employees are entitled to more than 10 days per year.
Any personal/carer’s leave that an employee hasn’t used up at the end of a year automatically
carries forward to the next.
Classic mistake
Before the National Employment Standards were introduced, many awards stipulated
that employees accrued personal leave (which used to be called sick leave) as a single
lump at the beginning of each year. For example, as soon as an employee’s employment
anniversary rolled around, they were entitled to a whole year’s worth of sick leave.
In contrast, under the National Employment Standards personal leave builds up
progressively. For example, if an employee is entitled to ten days per year but has only
been with your company for six months, at that point they’re only entitled to five days
personal leave.
What about long service leave?
Long service leave (an amount of paid leave for employees who have been working for the
same company for a long period of time) works a bit differently from other kinds of leave, such
as holiday or personal leave, in that many employees leave employment before they become
entitled to it. For this reason, you may not want to track entitlements for long service leave
until an employee has been working for you for at least five years.
At the time of writing, the National Employment Standards don’t cover long service leave, so
you’ll need to refer to your state or territory laws for more information. The actual amount of
long service leave that employees are entitled to, along with the qualifying period, varies from
state to state. Table 1 shows the contact details for each state.
Classic mistake
Although casual employees aren’t entitled to annual leave or personal/carer’s leave, they
are entitled to long service leave in some states. Be sure to check the legislation that
applies in your state or territory if you employ casuals for five years or longer.
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ACT
www.ors.act.gov.au
(02) 6207 3000
NSW
www.industrialrelations.nsw.gov.au
131 628
NT
www.ocpe.nt.gov.au
(08) 8999 5511
QLD
www.fairwork.gov.au
13 13 94
SA
www.safework.sa.gov.au
1300 365 255
TAS
www.wst.tas.gov.au
1300 366 322
VIC
www.businessvic.gov.au
1800 287 287
WA
www.commerce.wa.gov.au
1300 655 266
Table 1: The rules for long service leave are still governed individual states and territories.
Setting Up Entitlements in MYOB
Tracking employee entitlements is the trickiest part of managing payroll, and the secret to
success lies in setting up your payroll categories correctly. Payroll categories form the hub of
payroll, and are crucial to how every employee’s pay gets calculated.
To check out your payroll categories list, go to the Payroll command centre in MYOB and click
the Payroll Categories button. All the information relating to employee entitlements sits under
the Entitlements tab.
How do I set up MYOB software to track employee
leave due?
As an employer, you’ve got to get the leave calculations for your employees spot-on.
Here’s how:
1. Go to the Payroll command centre in MYOB and click the Payroll Categories button.
2. Click the Entitlements tab in your Payroll Categories list.
3. Check that you have a leave entitlement category for all types of leave relevant to
your business, such as Annual Leave Accrual, Personal/Carer’s Leave Accrual, Long
Service Leave Accrual and so on. (If not, click New to create a new entitlement
category.)
4. Double-click each category in turn and check that the Calculation Basis is correct. (For
the decision about whether to calculate leave as a percentage, or as a fixed number of
hours per pay period, see Calculating Leave Entitlements later in this document.)
5. If you want to print leave details on payslips, click Print on Pay Advice (generally a
good idea for annual leave; maybe not so good for personal leave).
6. If this entitlement carries across from year to year (and almost all entitlements do),
click Carry Remaining Entitlement Over to Next Year.
7. Ensure the Linked Wages Category reflects the wage category that pays out the
entitlement. For example, Annual Leave Accrual links to Holiday Pay and Personal
Leave Accrual links to Personal/Carer’s Leave.
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Understanding Employee Entitlements using MYOB software
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8. Click Employee to select all employees who are entitled to this category of leave.
9. Check your work! Figure 1 shows what your Annual Leave entitlement category may
look like.
Figure 1: Creating a new entitlement category
How do I change or delete an entitlement category?
MYOB software comes with standard entitlement categories such as Annual Leave Accrual and
Personal/Carer’s Leave Accrual. Feel free to add, modify or delete any of these categories:
t To delete a category, double-click the name, then go up to Edit on the top menu bar and
select Delete Entitlement.
t To change the name or the settings of an existing entitlement category, simply doubleclick the category name and make your changes.
t To create a new category, click the New button, give the category a name, and then select
the settings you require.
What about leave that was due to an employee before
I started with MYOB?
In order for holiday and sick entitlements to calculate correctly, you first need to record how
much annual and personal leave your employees were due at the point you start using MYOB
payroll. Here’s how it’s done:
1. Calculate how much annual leave and personal leave each employee is owed,
expressing this amount in hours and not days.
2. Go to Process Payroll and click Next.
3. Zoom in on the first employee’s pay and set all amounts to zero, including any hours
showing up in leave accrual categories.
4. Still in the employee’s pay, enter the number of hours that the employee is owed
against the relevant leave accrual category (for example, Annual Leave Accrual). This
entry should look pretty similar to Figure 2 by now.
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5. Click OK, and when asked if you want to record a void paycheque, click OK.
6. Repeat this process for all employees.
7. Click Preview Pay Details to view your Payroll Verification report for these entries, and
print a hard copy of this report so you have a record of how many hours you entered
in leave for each employee.
8. Click Record then Next to finalise these transactions.
Figure 2: Recording opening employee entitlements
Tip
When you’re working with entitlements, remember to express them in hours (and never
in dollars or days). For example, if an employee works a 38-hour week, this converts to 7.6
hours per day. If they have two days’ leave owing, this converts to 15.2 hours leave.
Calculating Leave Entitlements
There are two different ways to calculate leave entitlements in MYOB software: as a fixed
number of hours per pay period or as a percentage basis. There’s no right or wrong method —
you just have to figure out what method works best for you.
t Fixed number of hours per pay period. This method works best if you employ mostly fulltime salaried employees whose hours stay constant from month to month.
t The percentage basis. This method is the least fuss if you have lots of part-timers who
work different numbers of hours – for example, one part-timer works 15 hours a week,
another part-timer works 24 hours a week, and so on.
© Veechi Curtis
Understanding Employee Entitlements using MYOB software
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Many businesses use both methods, setting up leave entitlement categories calculated on
a fixed number of hours for full-time salaried employees, and leave entitlement categories
calculated on a percentage basis for part-time employees.
The next few questions go into the practicalities of each one of these methods.
number of hours per pay period?
As explained in the preceding question, if you employ mostly full-time salaried employees
whose hours stay fairly constant, you’re usually best to calculate employee entitlements as a
fixed number of Hours per Pay Period. Here’s how to figure out the correct number of hours:
1. Confirm how many weeks’ leave each employee is entitled to per year.
For example, an employee may be entitled to four weeks’ annual leave, two weeks’
personal leave and one week long service leave per year.
2. Multiply the number of hours in the employee’s working week by the number of
weeks’ entitlement.
For example, if an employee is entitled to four weeks’ annual leave per year and they
work a 40-hour week, then they are entitled to 160 (that’s 4 x 40) hours holiday per
year.
3. Divide the total number of hours leave per year by the number of pay periods
per year.
For example, if an employee is entitled to 160 hours annual leave per year and they
get paid once a fortnight, then this converts to 6.1538 hours leave per fortnight (that’s
160 divided by 26).
4. Double-check your figures make sense.
The table below shows how these calculations work out for an employee who is paid
weekly; even if this table doesn’t show the exact scenario you’re looking for, you
should be able to see if your result is in the right ball-park.
5. Edit the relevant payroll category to reflect your calculations.
Record the number of hours in the relevant entitlement category (such as Annual
Leave Accrual or Personal leave Accrual) in the number of Hours per Pay Period field.
(You can see how this is done in Figure 2.)
28 hr
week
32 hr
week
35 hr
week
38 hr
week
40 hr
week
5 days leave per annum
0.538
0.615
0.673
0.731
0.769
8 days leave per annum
0.862
0.985
1.077
1.169
1.231
10 days leave per annum
1.077
1.231
1.346
1.462
1.538
20 days leave per annum
2.154
2.462
2.692
2.923
3.077
Table 2: Converting annual leave entitlements to hours per week
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Classic mistake
Calculating entitlements on a fixed number of hours per pay period works fine, but be
careful to click the Leave in Advance button if you process more than one pay period
using a single pay transaction. (See ‘What happens if an employee receives holiday pay
in advance?’ later in this document for more details.) Similarly, if you record an extra pay
transaction for an employee in a single pay period (maybe doing a pay adjustment), you
need to manually edit this extra pay to change the leave accruals to zero.
How do I calculate employee entitlements on a
percentage basis?
If you employ lots of part-timers who work different numbers of hours, calculating entitlements
on a percentage basis makes sense. You can see how to calculate the correct percentage by
reading through the following examples:
Annual leave full-timers
This example is based on a full-time employee receiving four weeks annual leave per year. (To
double-check how much annual leave you have to pay your employees, refer to How much
annual leave must I provide to employees? earlier in this document.)
Total working days per year
52 × 5 = 260
Total days annual leave per year
20
Percentage annual leave
(20 ÷ 260) x 100 = 7.6923%
Annual leave part-timers
This example is based on a part-time employee working two-fifths of a regular full-time
loading. (You calculate entitlements for part-timers on a pro rata basis (pro rata means that if
a part-timer works two days out of five every week, they receive two-fifths of normal annual
leave entitlements).
Total working days per year
52 × 2 = 104
Total days annual leave per year
8
Percentage annual leave
(8 ÷104) x 100 = 7.6923%
Personal leave
This example assumes you’re paying two weeks personal leave per year. To double-check how
much personal leave you have to pay your employees, refer to How much personal leave must
I provide to employees? earlier in this document.
Total working days per year
52 × 5 = 260
Total personal leave days per year
10
Percentage personal leave days
(10 ÷ 260) × 100 = 3.8462%
© Veechi Curtis
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Long service leave
You are not obliged to make provisions in your financial accounts for long service leave;
however, it is a good idea to do so if an employee has been with you for more than five years.
This example assumes that an employee receives 4.33 weeks for every five years worked, but
remember that these calculations vary from state to state across Australia.
Total working weeks in 5 years
52 × 5 = 260
Total weeks leave per 5 years
4.33
Percentage long service leave
(4.33 ÷ 260) × 100 = 1.666%
Rostered days off
This example assumes that a rostered day off accrues when a 40-hour week is worked for four
weeks, but the governing award or employment agreement is based on a 38-hour week.
Number of hours in working day
38 ÷ 5 = 7.6
Frequency of RDO
4 (one RDO every four weeks)
Percentage entitlement
(7.6 ÷ 4)/38 = 5%
Percentage entitlement
(7.6 ÷ 4)/ 38 = 5%
Classic mistake
When calculating leave entitlements on a percentage basis, you must be careful not to
calculate leave entitlements on anything other than regular pay (you don’t want to an
employee to receive extra annual leave just because they work overtime or receive a tool
allowance). To check your exemptions, highlight each entitlement category one by one
and click Edit. Next, click Exempt to display the Entitlements Exemptions window. Click in
the Exempt column against all wages categories, with the exception of base salary, base
hourly, holiday pay and personal leave. (Allowances, annual leave loading and overtime
are all exempt from leave accruals.)
Do I need to accrue long service leave entitlements?
Yes and no. A good rule of thumb is to accrue long service leave for employees that have been
around for five years or more. Sure, you may get an employee who has just started with you
and who knows, they may end up sticking around for ever. On the other hand, you often get
employees who leave after five years but before their ten years is up (ten years is the normal
cut-off point after which long service leave applies).
To calculate long service leave using MYOB, first set up a wages category called Long Service
Leave Paid, and then create an entitlements category called Long Service Leave Accrual. (Refer
to Calculating Leave Entitlements for how to set up the calculation basis for this entitlements
category.)
If you want to show long service leave for an employee who has already been with you for
several years, but for whom you’ve never accrued this leave, you first calculate how much long
service leave this employee is due, then enter this balance using the procedure earlier in this
document called What about leave that was due to an employee before I started with MYOB?
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Paying Employee Leave
Probably the most important thing about paying any kind of employee leave is maintaining
proper records. If you use MYOB correctly, you automatically create a record for each employee
every time they take leave. However, if you purge transactions when you start a new year
in MYOB, you’ll end up purging these payroll records. This can be a problem, because when
an employee queries their leave entitlements, you often have to go back to when they first
started employment (which could be several years ago) in order to justify why their current
balance is what it is.
In order to guarantee that you can always justify an employee’s leave balance you need to do
two things:
t Print leave reports for each employee at the end of each year and ask each employee to
sign the report, agreeing that this record is correct.
t Be meticulous about retaining payroll backups on CD or external hard drives, year after
year.
How do I record payments for annual leave?
Here’s how to record holiday pay using MYOB payroll:
1. Check that the employee has enough hours built up in annual leave. See How can I
see how much holiday or personal leave employees are due? for more info on running
entitlement reports.
2. Go to Process Pays as you normally would and proceed to the second step, the Select
& Edit Employee’s Pay window. You should see the employee appear in this list, along
with their standard net pay.
3. Zoom in on this pay and enter the total number of hours of Holiday Pay. The amount
of pay in Base Hourly or Base Salary should reduce automatically. (If it doesn’t, see the
tip below.)
4. Click the arrow that appears next to Holiday Pay and record the dates that leave was
taken, the total number of hours taken, and notes about their leave.
5. If this employee is eligible for leave loading, enter the number of hours’ holiday
against Annual Leave Loading, as shown in Figure 3.
6. Click OK to record your changes and return to the Select & Edit Employee’s Pay
window. Click Record to complete your pay run in the normal way.
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Figure 3: Processing holiday pays
Tip
If the amount shown in Base Hourly or Base Salary doesn’t reduce automatically when
you enter a figure against Holiday Pay, then you need to check the setup of your Holiday
Pay category. Go to Payroll Categories, click the Wages tab, and double-click the Holiday
Pay category. Check that the option to Automatically Adjust Base Salary or Base Hourly
Details is clicked.
What happens if an employee receives holiday pay in
advance?
If an employee receives holiday pay in advance (maybe they’re normally paid weekly, but they
take a fortnight’s leave and you pay them for both weeks in a lump sum), you need to record
this pay in a special way so that PAYG tax and ongoing leave entitlements calculate correctly:
1. Go to Process Payroll as normal, but click Process Individual Employee, rather than
Process all Employees Paid.
2. Click Pay Leave in Advance and specify the number of weeks of leave this employee
is receiving in advance. For example, if you’re paying the employee three weeks’ pay,
being for the week just completed and for two weeks’ holiday in advance, then you
enter 1 as Weeks of standard pay and 2 as Weeks of leave in advance.
3. Complete the employee’s pay as normal, recording the amount of Holiday Pay given
and the dates that this pay is for.
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Tip
Always take the extra time to record the details of annual leave taken in the Leave
Tracking Information window (you get here by clicking the arrow next to the Holiday Pay
category). This info forms a vital record in the future if this employee ever queries their
leave entitlements.
What about leave loading?
Although paying leave loading seems like a piece of cake, there are a few technicalities
hidden away, such as how you calculate leave loading, why you should make sure it’s exempt
from superannuation and whether you need to adjust the PAYG tax calculations. Here’s the
fine detail:
1. Double-check that this employee is eligible for leave loading. (Many awards state that
leave loading is only payable after 12 months of employment.)
2. Check that Leave Loading comes up as a category in this employee’s standard pay
(even if the amount is zero). If it doesn’t, go to the Wages side menu in the Payroll
Details tab of the employee’s card and click against Leave Loading.
3. Go to Process Employees and progress to the Select & Edit Employee’s Pay window.
Zoom in on the employee who is receiving leave loading.
4. Whatever number of hours you’re paying in holiday pay, enter this number of hours
against annual leave loading also. For example, if you’re paying 14 as the number of
hours Holiday Pay, enter 14 as the number of hours Leave Loading (you can see how
this works earlier in this document, in Figure 3).
5. Check that the leave loading calculates correctly, referring to the fine detail of your
employee’s award in order to be sure. (If the calculation doesn’t come up right, you
can either edit the settings for your Leave Loading payroll category, or simply edit the
Amount.)
6. Check that superannuation isn’t calculating on leave loading (leave loading is not
included in ordinary time earnings). See Managing Employee Superannuation, the
eBook that comes as part of this MYOB Payroll series, for more info about calculating
super.
7. Check that PAYG is calculating correctly. (Strictly speaking, the first $320 of leave
loading paid in any payroll year is exempt from PAYG withholding tax.)
What if an employee asks to cash out their annual
leave?
Under the National Employment Standards, all employees can cash out their annual leave,
so long as their award or workplace agreement allows. There are a few conditions that must
be met, including the stipulation that employees must be left with at least four weeks annual
leave up their sleeve, even after cashing out leave. (For more details, go to www.fwa.gov.au).
Assuming an employee is ready to go ahead and cash out their leave, here’s your part of the
deal:
1. Process the week’s pay for that employee as normal, not including the amount of
leave being cashed out.
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2. Return to Process Pays and this time select Process Individual Employee, followed by
the employee’s name.
3. Click Next.
4. Zoom in on the employee’s pay and put all values to zero, including any leave
entitlements.
5. Enter the number of hours of Holiday Pay being cashed out, and check that the
Amount calculates correctly.
6. Click the arrow that appears next to Holiday Pay and in the Notes field write ‘Annual
Leave cashed out’, followed by the number of hours being cashed out.
7. Manually adjust the employee’s PAYG tax in the same way as you adjust for any oneoff payment, such as bonuses. If you’re not sure how to adjust PAYG tax, go to the ATO
website at www.ato.gov.au and search on their document ‘PAYG tax table bonuses
and similar payments’.
8. Click OK to record your changes and return to the Employee Pays window. Click
Record to complete this pay in the normal way.
What happens with public holidays?
For information about public holidays, you need to refer to your employees’ award or
workplace agreements. However, here are some general comments that may help you figure
out what to do:
t All permanent full-time employees are entitled to public holidays, and therefore when
you record a pay transaction that includes a public holiday, just treat it like any other pay
transaction. Put the total pay through as wages, and don’t put public holidays through as
holiday pay.
t With part-timers, most awards specify that they should neither gain nor lose because of
a public holiday. So if a part-timer normally works on a Monday, and Monday is a public
holiday, they must be paid for that day. Again, this would just go through as ordinary
wages, not as holiday pay. However, if a public holiday falls on a day that the part-timer
doesn’t normally work, then they don’t get paid for it.
t Assuming an employee has the day off, you pay public holidays at the base rate, not
including loadings, overtime or penalty rates.
t If a public holiday occurs during an employee’s annual leave, you should adjust their
holiday pay accordingly. For example, if an employee takes 2 weeks annual leave but
a public holiday falls during the time they’re away, you should record their pay for that
period as being 9 days leave plus one day’s regular pay.
How do I record payments for personal or carer’s
leave?
You record payments for personal or carer’s leave in exactly the same way as you record
payments for annual leave. However, here are some extra comments:
t Instead of entering the hours or amount paid against Holiday Pay, you enter the hours or
the amount against Personal Leave.
t Don’t forget to look up the employee’s entitlement balance to see whether they have
accrued enough hours.
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t Depending on company policy, the employee may need to supply you with a medical
certificate before you can pay them.
t An employee is allowed to take part of a day as personal leave (for example, if they go
home in the middle of the day because they’re not feeling well). This is easy in MYOB,
because you record any personal leave taken in hours, not days.
t Always click the arrow next to Personal Leave and record notes regarding the nature of the
leave taken and whether a medical certificate was supplied.
Tip
If the amount shown in Base Hourly or Base Salary doesn’t reduce automatically when
you enter a figure against Personal Leave, then you need to check the setup of your
Personal Leave category. Go to Payroll Categories, click the Wages tab, and double-click
the Personal Leave category. Check that the option to Automatically Adjust Base Salary or
Base Hourly Details is clicked
Can I pay more holiday or personal leave than the
employee is due?
Yes. For example, if an employee is owed five days annual leave but they want to take eight
days, then it is entirely up to their supervisor whether to grant this leave, or not.
If you process a pay that includes more leave than an employee is actually due, their entitlement
will show as a negative figure for a few weeks until the employee has worked enough to make
the entitlement figure positive once more.
How do I record the payment of long service leave?
To record the payment of long service leave, first go to your Payroll Categories list, click the
Wages tab and highlight your Long Service Leave category (you can create a new category
by this name if you can’t see it in the list). Click Employee to select the name of the employee
taking long service leave.
When you come to pay this employee long service leave, the long service leave category
should appear in their pay transaction. All you have to do is enter the amount of the payment.
You may need to adjust both the amount of PAYG tax and/or the amount of super — ask your
accountant for advice if you’re not sure how.
Catering for RDOs and Other Types of
Leave
Of course, annual and personal leave aren’t the only types of leave that employees are entitled
to receive. Other types of leave include rostered days off, time-in-lieu, long service leave and
compassionate leave, to name but a few. Although the basic principles behind any kind of
leave are the same, the next few pages of this document deal with some of the idiosyncrasies
you might encounter.
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How do I track entitlements for rostered days off?
A typical scenario for rostered days off (RDOs) is when an employee is only meant to work 38
hours a week under their award, but instead they work 40 hours a week and on the last day of
every fourth week, they get the day off.
Here’s how to get MYOB software to track RDOs:
1. For each employee who receives RDOs, go to the Wages section of their card and
make sure that the Hours in Weekly Pay Period are set to 38. (Remember that although
the employees work 40 hours per week, you’re only going to pay them for 38.)
2. Go to Payroll Categories, click the Wages tab and then click New. Name this category
Rostered Day Off and as the Type of Wages select Hourly. Set the pay rate to Regular
Rate Multiplied by 1.000.
3. Click Employee to select all employees that receive RDOs. Click OK to record your
changes.
4. Click the Entitlements tab and then New. Name this category RDO Accrual and
as the Linked Wages Category select the new wages category you just created,
Rostered Day Off.
5. If this is a typical RDO setup (38-hour working week, with one RDO every four weeks),
select Equals 2.0 Hours per Pay Period as the Calculation Basis. If you have a different
working week structure, refer to the advanced tip below for how the correct number
of hours.
6. Click Employee to select all employees that receive RDOs. Click OK to record your
changes.
7. With your setup complete, read on to the next question about how to pay employees
for RDOs when they take them.
Advanced tip
If the number of hours in your working week is different from the example above, you
calculate the correct number of hours per pay period by working out the number of
hours in a working day and dividing this by the frequency of the RDO in weeks.
How do I pay RDOs?
Assuming a typical RDO setup (a 38-hour working week, with one RDO every four weeks),
managing RDOs is really quite straightforward.
For the first three weeks out of the four-week pay cycle, go to Process Pay as normal and simply
accept the standard pay that comes up. The total hours worked should be 38 (even though the
employees actually worked 40 hours) and the number of hours against RDO Accrual should
be 2.0 hours.
On the fourth week, you need to edit each employee’s pay. Change the total hours worked to
equal 30.4 hours (that is, 7.6 hours a day for four days). Enter 7.6 hours against Rostered Day
Off, and change the RDO Accrual to 1.6 hours. (Why? Because if an employee normally works
0.4 extra hours per day, in the week that they only work four days, they only accrue 1.6 hours
as an RDO.) You can see how this looks in Figure 4.
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Figure 4: An employee pay transaction showing payment of an RDO
Warning
Remember that an employee only receives RDOs if they work extra hours over and above
their agreed weekly hours. Therefore, when an employee takes annual leave, they don’t
accrue RDO hours. You must remember to manually adjust RDO accruals (simply edit this
figure) when recording employee pays that include annual or personal leave.
Can MYOB software track time-in-lieu?
Yes. Many businesses choose not to pay overtime; rather, they let employees accumulate
additional hours worked as time-in-lieu. Employees then use up this time-in-lieu by working a
shorter week later on. You can keep track of time-in-lieu using this method:
1. Go to Payroll Categories and click the Wages tab. Create a new category called Timein-lieu Paid. As the Type of Wages select Hourly.
2. Still in Payroll Categories, click the Entitlements tab. Create a new entitlement
category called Time-in-lieu Accrual. As the Type of Entitlement select User-Entered
Amount Per Pay Period. As the Linked Wages Category, select the wages category
Time-in-lieu Paid.
3. When an employee accumulates time-in-lieu, complete their pay as normal but enter
the number of hours’ time-in-lieu worked against the Time-in-lieu Accrual category.
4. When an employee later uses their time-in-lieu hours, complete their pay as normal
but enter the number of hours taken against the Time-in-lieu Paid category.
This method works a treat. The employee can see from their payslip how much time-in-lieu
they’re owed and at any time, you can view time-in-lieu details for all employees by generating
an entitlements report.
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What about compassionate leave?
Compassionate leave is different from other types of leave. Employees don’t accumulate more
and more compassionate leave the longer they work for you. Instead, according to the National
Employment Standard, permanent employees are entitled to two days’ paid compassionate
leave if a member of their household or immediate family gets a life-threatening injury or illness,
or dies. Casual employees are also entitled to compassionate leave, but the leave is unpaid.
In terms of recording compassionate leave in MYOB, you’re probably simply best to record the
leave taken as Base Hourly or Base Salary, and make a note in the employee’s log regarding the
leave taken. There’s little point in setting up wages or entitlement categories for compassionate
leave, as compassionate leave entitlements don’t build up over time — an employee who
has worked for you for 15 years is entitled to the same amount of compassionate leave as an
employee who has worked for you for 15 days.
Reporting for Employee Entitlements
Now that you’ve been tracking employee leave entitlements so faithfully using MYOB software
you’re ready to reap the benefits. The next questions in this document deal with how to analyse
how much leave you owe to employees and also how to fix up balances when they go wrong.
How can I see how much holiday or personal leave
employees are due?
The best choice of report depends on what you’re looking for:
For a quick summary of how much an individual employee is owed in leave
Go to Reports, click the Payroll tab, and highlight the Entitlements Balance Summary report. Click
the Customise button, select the Employee name up the top, along with the date range (simply
select the current month if you’re only interested in their current balance). Then click Display.
Alternatively, for a quick peek at employee entitlements, go to the Payroll Details tab of an
employee’s card and click the Entitlements side menu. The figures in the Total column show
how much leave is outstanding.
For a quick summary of how much all employees are owed in leave, sorted by the
type of leave, rather than by employee
Go to Reports, click the Payroll tab, and highlight the Entitlements Balance Summary report.
Click the Customise button, then select the date range (simply select the current month if you’re
only interested in the current balance). Click the Finishing tab and ask to sort by Entitlement,
rather than by Employee. Then click Display.
For a detailed breakdown of an employee’s total leave owing, and what
transactions make up this leave
Go to Reports, click the Payroll tab, and highlight the Entitlements Balance Detail report. Click
the Customise button, select the Employee name up the top, along with the date range (start
with the first day of your payroll year, which is always July 1 and go right up to your current
date). Then click Display.
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How can I check whether the leave report is correct?
As mentioned above, the Entitlements Balance Detail report provides the most information
about how an employee’s entitlements have built up over time, showing not only how much
leave was accrued each week, but how much leave an employee has taken. Figure 5 gives you
an idea of how this report looks.
Figure 5: A sample Entitlements Detail report
If this employee has been with your business or organisation for many years, you may need
to print up a separate report for each year. Depending on whether you’ve purged the data in
your MYOB company file or not, you may even need to restore backups from previous years in
order to get all this info (which, by the way, is the logic behind the ‘golden rule’ for managing
leave entitlements, which is that you should print entitlement reports every year and keep
them carefully archived).
Classic mistake
The Entitlements Balance Detail report shows a difference if the hours on an employee’s
pay transactions differ from the hours on their final leave balance. If you see a difference
here, take the time to investigate the cause. The most usual cause is that someone
has fiddled with the totals in the Carry-Over column in the Entitlements section of the
employee’s card.
Adjustments made to the Carry-Over column aren’t always sinister — maybe you or
another person responsible for payroll had reason to adjust the employee’s entitlement
balance. However, it is infinitely more preferable to make adjustments to entitlements by
processing a payroll transaction, as this method supplies a full audit trail.
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employee is wrong?
So, you’ve found that your figures for holiday or personal leave (or for any other type of leave,
for that matter) aren’t right. You want to fix them up so that they’re correct from now onwards.
How do you do this?
1. First, calculate the difference between how many hours of leave the employee is really
owed, compared to what shows up in the employee’s payroll records. For example,
if you know the employee is owed 120 hours leave but the payroll record shows 30
hours, then the difference is 90 hours.
2. Go to Process Payroll, select to Process Individual Employee, and click Next.
3. Zoom in on this employee’s pay and set all amounts to zero, including any hours
showing up in leave accrual categories.
4. Still in the employee’s pay, in the relevant leave accrual category (for example, Annual
Leave Accrual), enter the number of hours that the employee’s record is out by. You
can enter this amount as a positive or negative number, depending on whether you
need to increase or decrease the employee’s entitlement.
5. When you record the pay, you’ll get a message asking if you want to void this
paycheque. Click OK to continue.
6. Return to Entitlements in the Payroll Details tab for this employee and check that the
number of hours shown in the Total column is now correct.
Advanced tip
If employee entitlements get in a pickle, you may have to start from scratch. Ascertain
the employee’s start date (or the last date their entitlements were correct), calculate how
much leave they would have accrued since this date and then deduct the total leave
taken. This process may entail going back through records for several years, but you’ll just
have to grin and bear it.
Why doesn’t holiday or personal leave show up on my
payslips?
If you find holiday or personal leave isn’t showing up on your pay advices, there are two simple
settings that you can check:
Go to Payroll Categories and click the Entitlements tab. Double-click the entitlement that
should be showing up on the pay advice (for example, Annual Leave Accrual) and ensure that
the box marked Print on Pay Advice is checked.
Next, go to the Setup menu, select Preferences and then click the Reports & Forms tab. Make
sure that the box marked Include All YTD Amounts and Entitlement Balances on Paycheque
Stubs is checked.
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Making Provisions for Leave
For most small businesses, it’s overkill to make accounting provisions for holiday and personal
leave owing. However, many auditors expect community and non-profit organisations to make
proper provisions for leave, at least on an annual basis. The last part of this document explains
exactly how to do just that.
How do I make provisions for leave in my Balance
Sheet?
Here’s how to journal leave provisions in your Balance Sheet:
1. Print a Balance Sheet for the last day of your financial year and highlight the
balances of all the leave provision accounts.
Look for liability accounts called Provision for Long Service Leave, Provision for
Holiday Leave and so on. If your organisation makes journals for leave on a monthly
basis, rather than an annual basis, then you print up a Balance Sheet for the month
just gone, rather than for the year just gone.
2. Print an Entitlements Balance Summary Report showing how much employee
leave was accrued as at the last day of the financial year (or last day of the month, if
you’re doing this journal monthly).
When customising this report, click the Finishing tab and ask to sort by Entitlement,
rather than by Employee.
3. Have a chat to your accountant about whether any of these balances need
adjusting.
4. Your accountant may want you to add 17.5% leave loading to the annual leave figure
and may also want to adjust the long service leave figure (the final calculations for
long service leave provisions often involve complicated actuarial adjustments).
5. For each leave provision, calculate the difference between the final figures on your
Entitlements Balance Summary report and your Balance Sheet report.
For example, if the leave report shows $5,000 outstanding in annual leave and the
Balance Sheet shows $4,000, then the difference is $1,000. (Of course, if nobody has
journalled leave provisions before now, then the difference is $5,000.)
6. Go to your Accounts command centre and record a journal entry that adjusts the
provision.
To increase the balance of a provision account, debit an expense account called Wage
Provision Expense (create an account by this name if you don’t already have one) and
credit the provision account. To decrease the balance of a provision account, debit the
provision account and credit Wage Provision Expense. You can see how this works in
Figure 6, where I increase the Provision for Annual Leave by $1,000.
7. Reprint your Balance Sheet and check that the balances of your provision accounts
are now the same as the amounts shown on your Entitlements Balance Summary
report.
They are? Then well done!
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Figure 6: Adjusting leave provisions
Can I make leave provisions on a continual basis?
Some businesses with larger payrolls like to make provisions on a continuous basis, so that the
financial reports always reflect the correct amounts for leave owing. You can tweak MYOB software
to make this happen, but bear in mind that this approach is technical and needs careful monitoring:
you will have to remember to adjust provision accounts if there’s a pay rise, if an employee leaves
before becoming eligible for leave or if there’s a change in the award conditions.
Here’s how it’s done:
1. Go to your Accounts List and create a new liability account for each type of provision
you wish to make, such as Provision for Annual Leave, Provision for Long Service Leave
and so on. Also, create a new expense account called Wage Provision Expense.
2. Go to your Payroll Categories list and make sure you have a corresponding wages
category for each of these provisions, such as Holiday Pay, Long Service Paid and so
on. Click Optional Account for each of these categories and as the Override Account
select the appropriate liability.
3. Now click the Entitlements tab and make sure you have an entitlement category for
each of these provisions, such as Annual Leave Accrual, Long Service Leave Accrual and
so on. Double-check that the Linked Wages Category for each entitlement is correct.
4. Next, click the Expenses tab in your Payroll Categories list and create a new category
for each of these accruals, such as Annual Leave Expense, Long Service Leave Expense
and so on. Select the appropriate liability account (as created in step 1) as the
Linked Payable Account and select Wage Provision Expense as the Linked Expense
Account. Make sure that the Calculation Basis is the same for both this expense and its
corresponding entitlement.
5. For all payroll categories mentioned above, click Employee to select those employees
eligible for leave.
To see how this whole idea works in practice, go to Process Payroll. In a normal pay transaction,
when an employee accrues leave, you end up debiting your wages provision account and
crediting your leave provision account. When an employee takes leave, you end up debiting
your leave provision account and decreasing the number of hours owing to the employee.
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Parental Leave
The new parental leave scheme is now operating in Australia, meaning that eligible employees
receive 18 weeks of Parental Leave Pay after the birth of a child. Despite the fairly convoluted
rules around the way employees receive this payment, configuring Parental Leave Pay in MYOB
is quite straightforward.
This guide focuses on how to pay employees Parental Leave using MYOB, but for more general
information about the scheme, visit www.centrelink.gov.au.
How do I know if an employee is eligible for Parental
Leave Pay?
The good news is that it’s Centrelink’s job, not yours, to figure out whether an employee is
eligible for Parental Pay. You don’t have to worry about a thing. If you’re obliged to make this
payment, you’ll receive a letter from Centrelink notifying you that this is the case.
You may be surprised however to find out how many employees are eligible — even casuals
are eligible for Parental Leave Pay if they have been working for you for long enough, and
working at least one day per week.
Do I get reimbursed in full for Parental Leave Pay?
Yes. The idea is that Parental Leave Pay shouldn’t cost employers a cent. Although it’s your job
to receive the payment from Centrelink and then pass this payment on to the employee, you
don’t ever have to pay an employee until you’ve received the Centrelink payment. In addition,
you don’t have to pay super, workers comp or payroll tax on Parental Leave Pay.
How do I set up Parental Leave Pay in MYOB?
The first thing to get your head around is that Parental Leave isn’t an entitlement in the same
way as Annual Leave or Personal Leave. Parental Leave isn’t something that an employee
accrues over time. Think of Parental Leave as simply being a government payment with you as
the intermediary.
The setup of Parental Leave in MYOB is straightforward:
1. In your Accounts List, create a new liability account called Parental Leave Owing.
You’ll use this to track the payments you receive from Centrelink and which you then
distribute to the employee. In the ideal world, the balance of this account will return to
$0.00 at the end of each pay run.
2. Create a new payroll category for Parental Leave Pay. Go to Payroll Categories, click
the Wages tab followed by New and create a new Wages category called Parental
Leave Pay. Choose Salary as the Type of Wages and then click the option to Override
the Employees’ Wage Expense Account. Select your new Parental Leave Owing liability
account as the Override Account, as shown in Figure 7. Click the Employee button and
select the employee who will be receiving Parental Leave Pay.
3. Exempt this payroll category from superannuation. Go to Payroll Categories and click
the Superannuation tab. Double-click the SGC Superannuation Guarantee category
and click Exempt. Select the Paid Parental Leave category to exempt this category from
super and click OK.
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4. Exempt parental leave from accruing entitlements such as holiday or personal
leave. You don’t have to worry about exempting hourly employees as entitlements
won’t accrue on Parental Leave Pay. However, you do need to ensure no entitlements
accrue for salaried employees. To make this adjustment, go to the Payroll Details tab of
this employee’s card, click the Entitlements side menu and deselect all entitlements.
5. Edit the employee’s standard pay. Go to the Standard Pay side menu under the
Payroll Details tab of the employee’s card and set all pay amounts and entitlements to
zero. Then enter the weekly or fortnightly amount for Parental Leave Pay — currently
$589.40 a week — as the amount against this payroll category.
Figure 7: Creating a new payroll category for Parental Leave Pay
How do I record the payment of parental leave?
Assuming you’ve set up Parental Leave Pay and edited the employee’s standard pay, recording
parental leave should be pretty much automatic. Go to process your pay run as normal, and
double-click this employee’s pay to review the details.
You should find that the pay calculates an amount for Parental Leave Pay and deducts PAYG tax
at the same rate as for a regular pay. However, your job is to check that MYOB doesn’t calculate
any superannuation on this pay, nor does it accrue any entitlements for Holiday Leave, Personal
Leave or Long Service Leave.
You can see what a Parental Leave payment looks like in Figure 8.
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© Veechi Curtis
Figure 8: Recording Parental Leave Pay
What about receiving the payments from Centrelink?
This bit is nice and easy. Simply go to Receive Money, enter Centrelink as the Payor and select
Parental Leave Pay as the liability account. The tax code should be N-T.
Just because an employee has received 18 weeks of Parental Leave Pay doesn’t mean that they
have to return to work. All employees are eligible for a minimum of 12 months unpaid parental
leave (this period includes the 18 weeks during which they may receive Parental Leave Pay),
and any permanent employee who has worked for you for a year or more can request a further
12 months unpaid leave.
Your job as a bookkeeper is to keep track of how much unpaid leave an employee receives.
Remember that you don’t include any periods of unpaid leave if you’re calculating an employee’s
entitlement to things such as long service leave or redundancy.
For more info on this topic, check out the Fair Work Australia website at www.fwa.gov.au
Do I include Parental Leave Pay on payment
summaries?
Yes. You include Parental Leave on payment summaries as part of Gross Wages.
The only thing to be mindful of is what figures you use when calculating your workers
compensation premiums or payroll tax payments. Remember that although the total of Wages
on your Payroll Register Summary report includes Parental Leave Pay, you don’t pay workers
comp or payroll tax on this component.
Instead you’re usually best to refer to the wages figures on your Profit & Loss report when
retrieving these figures.
© Veechi Curtis
Understanding Employee Entitlements using MYOB software
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