How do I create a new Allowance?
Navigation: Maintenance>> Payroll Setup>> Allowances
Allowances
Allowances and reimbursements: Some earnings in payroll can include allowances or reimbursements for expenses incurred by employees while performing their job duties. This can include travel allowances, meal allowances, mileage reimbursements, or other work-related expenses. This is usually paid to the employee in addition to their regular salary.
Steps to create an allowance:
Step 1: Create a New Allowance
Click on New Record and enter an Allowance Code and its Corresponding Description. Fill out the remaining fields as described below.
Allowance Code: Enter an acronym for the allowance description.
Allowance Description: Enter the name of the allowance.
Taxable: Use this box to indicate whether the allowance is taxable or not. This is typically determined by government policy as to what are taxable and non-taxable allowances. Some countries have no taxes so this would not apply. e.g. Turks and Caicos Islands.
Allow Regular: If flagged yes, the Allowance will be paid in every cycle. Allows he end user to avoid having to enter a cycle change for that allowance every month. If the Allowance is one-off, or if it occurs throughout different cycles irregularly, then flag as "No".
Allow Cash: If flagged yes, this indicated that the Allowance will be paid in cash. If the allowance is a benefit in kind, then flag as "No". For example, an employee who is given a company vehicle instead of a monetary car allowance, that is considered to be a benefit in kind.
Account Code: If the company uses a General Ledger through which all monies are tracked, the number of the account is to be entered in this field.
Fixed Rate: The fixed rate functions as a multiplier. For example, with a meal allowance, an employee may get $30 per meal. In the payroll, when entering the cycle changes, the employee may have had 10 meals for the cycle. Enter 10 in the cycle change and it will multiply by the $30 stated as the fixed rate.
Vacation Advance: This option is to be flagged if the company pays vacation advances in which case, the Earning (in this instance, Straight Time) will be included as part of the employee’s Vacation Advance.
Affects Employee NIS: To be flagged in accordance with the statutory laws of your country.
Affects Employer NIS: To be flagged in accordance with the statutory laws of your country.
Affects Pension: To be flagged in accordance with the statutory laws of your country. If flaged yes, then the allowance will be used in the computation of the pension.
Step 2: Link the Allowance to a Company
Navigation: Maintenance>> Payroll Setup>> Allowances>> Link Allowances to Companies
This option allows you to link each Allowance to a specific company. You can link any number of Allowances to one or multiple companies.
Click on the 'New Record' hyperlink and select the Company and the allowance to be linked. Save using the diskette icon.
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