Allowances

In Marlin HR, all payments are made to employees using either an Allowance Type or an Earnings Type. Which one to use depends on whether the ATO describes the particular payment type as being an "Allowance". The ATO defines Allowances as amounts paid by employers to cover anticipated costs or as compensation for conditions of employment.

Each payment to an employee must be reported to the ATO via Single Touch Reporting and provide the appropriate reporting codes so that the ATO system knows exactly what type of payment it was. These codes are selected on each Earnings Type and Allowance Type when it is created in Marlin HR and are automatically included in the STP reporting each time the Earnings or Allowance type is used on a payrun to pay an employee. The ATO has defined different reporting codes for each type of payment and the codes specified for "Allowances" are different to those specified for "Earnings" (i.e. all other payments). This is why it is very important to use the correct payment type (i.e. Allowance or Earnings) in Marlin HR to pay employees.

See Adding & updating Earnings types for further information on Earnings types in Marlin HR.

Also see Allowances and Reimbursements and Employment Allowances on the ATO website.

Common Allowance Types

To view, add or customise Allowance Types, select System > Allowances from the Marlin HR menu.

Shown below is a typical list of Allowance Types, each with typically selected settings. Those shown in grey are provided and maintained by Megabus (you can use them but not edit them) and can be updated at any time by clicking on the Update icon and responding YES to the confirmation prompt. This saves you from having to create and maintain most payments that are deemed to be allowances by the ATO but you can always add your own by clicking on the Add icon and making the appropriate selections. Any that you create yourself will be displayed in black to differentiate them from the grey ones provided by Megabus.

Refresh the Default Allowance Types

If you need to use one of the grey Allowance types show in the screen grab above but it is not listed in your system, you need to refresh the Megabus provided allowances as follows:

From the menu toolbar select System > Allowances.
Click on the Update icon , respond YES to the confirmation prompt and some standard ETP and Redundancy Allowance types will instantly be added to the list.
If none of the default Allowance types match your requirements, you can create your own as shown below.

How to create a new Allowance Type

Select System > Allowances from the Marlin HR menu.

Click on the Add icon to add a new blank Allowance Type (Note: If the new Allowance type will be very similar to an existing one, you can highlight the existing one and then click on the Clone icon to copy it and then just change the Allowance Name and any settings that are different).

Enter the Allowance Name.

Optionally enter a Pay Advice Comment (this will be printed directly below the Allowance Name on the Pay Advice whenever this Allowance Type is used on a payrun).

Tick the Active checkbox so that the new Allowance Type will be available for selection on a payrun (note that some Allowance Types will only be available on particular payrun types such as a Termination Payrun).

Tick the Is Ordinary Time Earnings (OTE) checkbox if this payment is OTE and is thus to be included in the calculation of the employer superannuation contribution.

Select the appropriate values in the remaining fields (click on Hint beside each field for relevant information).

Click on the Save icon.

How to apply a recurring Allowance Type to an Employee

If you regularly pay an employee a particular allowance, adding it to the employee in Employee Maintenance will save you from having to manually add it to each pay run and will ensure you don't forget it. If the amount differs from pay to pay or isn't payable on every pay, you can still add the Allowance to the employee but enter the amount as $0. Then, all you have to do on the weeks that the Allowance is payable, is to enter the amount on the pay run.

First check that the Allowance Type exists in your system and is setup correctly (select System > Allowances from the menu)

Open Employee Maintenance and select the employee

Select the Pay Details tab

Click on the Add icon in the Recurring Allowances section.

Select the Allowance from the drop down list.

Select the Department that the employee works for.

Enter the amount in $ (or perhaps $0 if it changes each pay) then click on the OK button to add the Allowance to the employee.

From now on, each time you initialise a Normal Pay, the Allowance (with the amount you specified above) will automatically be applied to this employee. Before finalising the pay run, you have the option to change or remove the amount.