Allowance

Allowance Overview

SapphireOne Payroll/HR Allowances is a list of Allowances that a company or organisations employees are entitled to receive. These include payments as well as deductions for work benefits and the remuneration that each employee should receive for hours worked. Allowances also encapsulates a company or organisations records of payments and deductions that were previously made to employees. This includes salaries and wages, bonuses, and withheld taxes or the records of the department that deals with compensation.

Allowances will be recorded within SapphireOne Payroll/HR, providing a complete overview of all allowances and deductions that are used within the SapphireOne Payroll/HR . Allowances are typically categorised by two types – After Tax and Before Tax. A calculation method is then applied with the options being Fixed Amount, Percentage, Fixed Amount by Period, Rate, Unselect and Loan. These will apply to Wages, Allowances and Deductions.

Allowances form a critical role within the operations of Payroll/HR. Laws and regulations will apply to your Allowances providing a financial perspective within your company or organisation. Allowances also perform a significant role from the Human Resources point of view as accurate and timely payment of Allowances are a critical factor in maintaining employee morale.

All inquiry screens have the option to Customise the list of items that are displayed on screen. The Custom Inquiry Option allows you to select the data fields that are displayed, and the order in which the columns of data are displayed across the screen. While a list of clients has been used to demonstrate this here, any type of inquiry may be customised within SapphireOne.

The list below is the Standard Inquiry list.

When the ‘Swap to Custom Inquiry‘ button in the lower left hand corner of the screen is selected the system will display the default Custom Screen as seen below. This Custom List screen gives the user user two main options when organising the order that the data is displayed:

  1. To add or remove the data field columns that are displayed on screen. To add or remove a column, go to the ‘Setup’ button in the bottom right corner of the screen. Within the Setup screen you can right click on the column lines and select from Delete, Move Left or Move Right. Further information on the Setup screen is documented below.
  2. To change the order in which the data field Columns are displayed. To change the order of the columns, go to the ‘Setup’ button in the bottom right corner of the screen. Within the Setup screen you can right click on the column lines and select from Delete, Move Left or Move Right. Further information on the Setup screen is documented below.

Once the user has customised the Custom Inquiry screen, the screen view will become unique to the user and each time the user logins they will be shown the same custom view. The user also has the option to select and save unlimited custom views. This can be done in the ‘Setup’ screen as documented below.

The Inquiry screen below is the initial Custom Inquiry screen which may be modified by the user.

Custom Inquiry Screen ‘Setup’ Function

To commence setting up your Customised List screen, select the Setup button as seen above. The Setup screen will be displayed as seen below.

From this screen the user is able to add and remove columns of data as required. Almost every field within the SapphireOne data tables is able to be included in the Custom List screen if the user is authorised.

There are a number of menu items across the top of the screen. These are as follows:

  • Reset to Default – Selecting this button will set the display back to default as determined by SapphireOne. When a new data field is selected SapphireOne will add it to the right hand side of the columns of data. You can then click on the field heading and drag it to wherever you want across the screen.
  • Show Related Record – You can also add related fields from other tables. Clicking on the checkbox at the top of the screen, allows you to choose a related record and a mini view of the related record for the chosen record will be displayed for the currently selected record. You will need to select the fields displayed.
  • Favourite Set – You can use this option at the top left of the screen to save a custom created screen for later use. For example, you can have a simplistic Inquiry screen for general use, and a more complex screen view when auditing certain information.

Allowance Details Page

Allowances or Deductions Area

An allowance will normally add to a pay, although it is possible to have a negative allowance. A deduction will normally subtract from a pay. By using a negative value for a deduction it will add to the pay. Deductions are the same as Allowances with the exception that the amount is deducted instead of added to the pay value. 
This page can be found by navigating to Payroll > Administration > Allowance Inquiry > Details.

  • ID – Enter an ID for the allowance. The allowance ID supports alphanumeric characters.
  • Description – Enter a description for this Allowance Class.
  • Company – SapphireOne will assume the Company that the user is currently logged into.
  • Active – Allowances when created are set by default as active. They may be made inactive by de-selecting the checkbox.

Classification Area

  • Class – Enter the Class ID here. The Class field enables a further breakdown for analysis reporting purposes. This can also be used for grouping. 

Package Area

  • Allowance/Deduction- This is the first step to address within the package area. The selection will impact the options under Calc. Method outlined below.
  • Type list box – The Before Tax option would be used when you require the allowance to be taxed and After Tax would be used if the allowance is not to be taxed. 
  • Multiplier – Multiplier is used for different purposes, depending on the calculation method.
    • Several possible scenarios are as follows.
      • It is not used as a Multiplier of the Pay rate as the pay is at normal rates so it is left at zero. However, for Time and a half or double time it would be set at 1.5 and 2 respectively e.g. Total hours = (20 * 1.5 =30), and total hours = (20 * 2.0 = 40). 
      • As SapphireOne calculates leave in hours or days, and the new Paid Parental Leave is paid on a weekly basis only, the number of dollars for a day will have to be used as the multiplier.
      • The current weekly rate is $570.00 so the daily rate is 570 / 5 = 114 so the multiplier will be 114. When the pay is done all that the Payroll Office has to do is enter in the number of days that are in the current pay period. 
  • GL ID – The General Ledger ID is used to identify the General Ledger account the allowance will be accrued to. In this case, the Wages Account. If you are running multiple departments and have set up SapphireOne default for employees and departments, the department code will be automatically replaced by the department code from the employee’s department. 
  • Calc. Method – You can also shift the Pay item to a different category on the Pay slip. For example, have an Allowance appear as part of the wages. 
    • The options for allowances are are as follows.
      • Fixed Amount – Is for use of a fixed amount for the method of calculation.
      • Rate – Allows you to enter a Pay sheet item multiplied by a rate.
      • Hours – Enables you to establish a multiple per hour. For example: Double time has an Amount of *2 with a calculation method of Hours and Wages.
      • Salary – Gives a fixed amount for each employee, based on the Salary entered for that employee.
      • Percentage Hours – Enables you to use a rate, which is multiplied by a percentage of hours.
      • Salary Hours – Works the same as hours but the Pay rate is based on the salary for the employee, rather than the Pay rate.
      • Fixed Amount by Period – Enables you to pay a fixed amount by a specified period.
      • Daily – A fixed amount per day irrespective of hours worked.
      • Percentage Gross – Calculated as a percentage of Gross.
      • Unselect – Provided to restore the default settings.
    • The options for deductions are are as follows.
      • Fixed Amount – Is for use of a fixed amount for the method of calculation.
      • Percentage – A percentage figure is entered into the amount box. This is the maximum percentage of the total wages which can be given as deductions.
      • Fixed Amount by Period – Enables you to deduct a fixed amount by a specified period. 
      • Rate – Allows you to deduct from a Pay sheet item multiplied by a rate.
      • Unselect – Provided to restore the default settings
      • Loan – A loan given to an employee with an agreement to deduct an amount from each pay.
  • Appearance – The selected option will dictate the layout of the payslip and should be chosen based on the employees needs in relation to reporting.
    • The options are as follows.
      • Wages – Presented as a component of gross earnings.
      • Allowance – Presented as an addition to the wage.
      • Deductions – Presented as a deduction to the wage.
      • Unselect – Provided to restore the default settings.
  • Salary Sacrifice MP – When the checkbox is selected SapphireOne will create an MP to the employee based in the settings in the Super Salary Sacrifice here. 
  • Percentage Maximum – Is used to express a maximum dollar value that the percentage can achieve. 
  • Custom Sort – Custom Sort is used if you want a reporting basis for allowances other than alphanumerically.
  • Payment Summary Position – This dictates the value will be accrued to the Gross Salary area of the Payment Summary. 
  • Use this Allowance When Calculating – Provided to allow for the attachment of an allowance to an income type. For example, Holiday Pay, Carer/Personal Pay, Superannuation Pay calculations etc. To be used when accruing Holiday Pay, but not used when calculating Sick Pay, Compulsory Super, Super Contribution, Workers compensation, Apprentice hours or Rostered Days Off. 
  • Data entry must have Project and GL – On the Working Transactions data entry screen this allowance is required to have project and a General Ledger ID before data entry is completed.

Allowances Log Page

Any changes made within an Allowances will generate an uneditable record within the Log page. The audit trail generated provides a timeline that may be valuable in assessing Payroll/HR data entry as well as the identification of fraudulent or biased data entry.

Paid Parental Leave

Paid Parental Leave (PPL) must be set up as an AllowanceEmployers do not have to assess their employee’s eligibility for the scheme. This will be done by the Family Assistance Office. It is the employee’s responsibility to lodge their claim with the Family Assistance Office. 

There are minimum requirements for hours worked and maximum requirements in relation to income limits, for eligibility.  Currently PPL is paid at the minimum wage rate of rate of $570.00 per week or, $114.00 per day. The Payroll officer should be aware that when there is an increase in the minimum wage this PPL rate will probably be adjusted as well. 

SapphireOne will calculate the PPL based on the standard leave units of days and it is recommended that the calculation be set up for days. This will enable the generation of split pays, part normal pays and part PPL pays Since the PPL is paid on a daily basis the pay period may be separated into days. 

At the time of publishing the ATO stipulates that the tracking of the money paid to a company by the ATO is not reportable, and the holding of PPL payment in a separate account is not a requirement. However, it is recommended the Payroll Office confirms this with the ATO. This will also be beneficial in determining what the particular Company intends to do in relation to the tracking and reporting of these payments. 

Creating a PPL allowance

Go to Payroll > Administration > Allowance and select the button on the main toolbar to create a new allowance.  Once the setup is complete navigate to  Payroll > Payroll > Working Transactions.

PPL and Working Transactions

Since this PPL will not become a permanent part of the employees file, it is best managed using Working Transactions and managed on a pay by pay basis. Since PPL usually replaces the Employees entire salary, the Employee’s Salary will have to be removed for the pay. Any other items such as superannuation will have to be examined carefully by the Payroll/HR Office managing the pay, as this will depend on any working arrangements that the employee has with the employer. 

The process for creating a PPL Allowance is as follows.

  1. Check the dates and enter in any messages to appear on the pay slip. 
  2. Click on the button to add a line and enter in the ID for the PPL allowance. The data entry field is searchable utilising sing the wildcard character “@” or “?”. For example if the user enters “PP@” This will provide a filtered list of results.
  3. Enter the number of Days for this pay period into the Rate data entry field. Entering “5”. 

Entering the number of days for weekly pay periods is a simple 5 days per week. However, for split pays and monthly pays the number of days for the period will have to be worked out.


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