This guide will show you how to setup and process fixed unit allowances such as phone, km and travel allowances.
Setting up the allowance pay category
The first step to setting up an allowance is to setup a pay category for the allowance. You can setup a pay category using the following steps:
- Go to "Business Settings" (QBO users go to Payroll Settings) -> "Pay Categories" and click the "Add" button
- Enter in the name of the pay category (e.g. Phone allowance) and click "Add"
- Select the "Fixed" rate unit for the new pay category
- If your allowance needs to be reported separately on employee payment summaries, also select the "Allowance" payment summary classification
- Once you've setup the pay category, click "Save"
Set the allowance rate for the employee
For employees that are entitled to an allowance, you need to open the employee file and go to the "Pay Rates" page and set the rate for the allowance, you can also choose to "Show in Pay Run" by ticking the box here...
Setting an allowance in a pay run
Once you have created your allowance pay category and set the pay rate for the employees that are entitled to the pay rate, you can add the allowance to the pay run for any other employees as well by following these steps:
- Open the pay run and click on the employee you want add the allowance to.
- Click the "Actions" button and select "Add Earnings"
- Choose the "Phone Allowance" pay category and add the units
- Click "Save"
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