Creating payroll categories

An employee’s pay is made up of many components, such as hourly pay, overtime, deductions, taxes and so on. In AccountEdge software, these components are called payroll categories, and they are grouped into five types: wages, entitlements, deductions, employer expenses and taxes.

Category	Description
Wages	All amounts paid to an employee for labour or services rendered on an hourly, salary or other basis.
Entitlements	Accrued entitlements such as holidays and sick leave.
Deductions	Amounts withheld by the employer and paid to other organisations on behalf of the employee, for example, student loan repayment or union fees.
Employer expenses	Employer-paid benefits, for example, NI employer contributions.
Taxes	Amounts withheld by the employer, such as PAYE Income Tax.

A default list of payroll categories is generated when you create your company file. You may want to review these categories and tailor them to suit your business needs. See ‘To create a payroll category’ below.

To create a payroll category

Go to the Payroll command centre and click Payroll Categories. The Payroll Category List window appears.

Click the tab corresponding to the type of payroll category you want to create—Wages, Entitlements, Deductions or Expenses.

note : You can only view tax categories

You cannot create any tax categories. To view the tax table information, click the Taxes tab and then click the zoom arrow (

) next to a tax. The tax table information is set by government legislation.

Click New. The […] Information window for the selected payroll category type appears.

Type a name for the payroll category.

Make the required selections for the payroll category. See the following topics for information about the options available for each payroll category type:

Wages Information window

Entitlements Information window

Deduction Information window

Employer Expense Information window.

Click Employee. The Linked Employees window appears.

Select the employees whose pay will include this payroll category by clicking the Select column (

), and then click OK.

If you are creating:

a Wage category, click Exempt and select the taxes and deductions that do not apply to the new category

an Entitlement category (and you have selected a percentage of gross wages as the type of entitlement), click Exempt and exclude those wage categories that should not be included in the entitlement calculation

a Deduction category, click Exempt and select the taxes that should be applied only to net pay (that is, to gross pay less the deduction amount)

an Expense category (and you have selected a percentage of gross wages as the expense basis), click Exempt and choose the wage categories that will not contribute to the value of the expense.

Click OK twice. A payroll category information window appears.