How to set up Income Protection Insurance payments to an employee

Question

We have an employee off on extended sick leave. He has exhausted all his sick leave entitlements.

We have an Income Protection Insurance policy that is about to kick in and reimburse us 70% of the employee's usual wages. The funds will be paid to us, we will calculate his deductions as usual and then pay the balance to the employee. We will then "top up" the employee's salary to 100% of his usual pay - a goodwill payment if you like.

I can't find any guidance on how to set this up correctly in payroll? Any guidance would be greatly appreciated. Thank you.

genreve_s · Answer

Hi Cath_Avatar,&nbsp;
&nbsp;
I can see why you’d want to make sure this is set up the right way.
&nbsp;
This article is for workers’ compensation rather than income protection, but it’s still a good guide for the general setup in AccountRight, especially if you need to create a separate wage category and record the reimbursement separately: Paying workers' compensation
&nbsp;
Because this is an income protection arrangement, it’s best to check the tax, super and STP treatment with your accountant or the ATO before processing it.
&nbsp;
Regards,
Genreve&nbsp;

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How to set up Income Protection Insurance payments to an employee

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