Casual loading calculation on overtime
I have a client that comes under the new fairwork calculation for overtime for casual employees.
If the employee's base hrly is $22.69 and they are to be paid overtime for sunday which the calculation from fairwork is
$22.69 x 2 = $45.38.
$22.69 x .25 casual loading = $5.67.
$45.38 + $5.67 = $51.05p/hr sunday overtime rate.
How are we to put this in MYOB? At this point I have told the client that she need to manually calculate it & input it in a payrun for each employee as they are on different pay rate. Otherwise she would need to create and new pay item for each employee for their overtime rates. Is this correct?
It is not quite as complicated as it may seem. You enter the standard hourly rate as $22.69 or as required for each of the employees on their relevant card. You would then set up a Payroll Category for the casual rate and set the Pay Rate as "Regular Rate Multiplied by;" 1.25 - that will add the 25% loading for all casuals. For the Sunday Casual Overtime Rate, you would again set up a new Payroll Category named something similar to "Sunday Casual Overtime Rate" (abbreviated as needed given the number of characters available) and set the Multiplier to 2.25. Each employee who will need to be paid the casual rate and/or the Sunday casual overtime rate will need to have the relevant categories selected. MYOB will then calculate the rate on the basis of the individual's standard pay. For your employee on $22.69, the Sunday Overtime multiplier would take the hourly rate to $51.05 (22.69 x 2.25). The casual loading with the 1.25 multiplier would take the hourly rate to @28.36, the same as your calculation below for $22.69 + $5.67. For an indivual on, say, $20, that would take his/her Sunday o/time rate to $45 etc. The advantage of using multipliers is that they will work regardless of the hourly rate and do not need to be updated when the hourly rate is changed - it will all happen automatically! You should NEVER rely on manual calculations/adjustments in payroll - it is a recipe for miscalculations leading to unhappy employers and employees!! This system also shows the award rate and how the award rate is then converted to the relevant rate for the loadings etc on a consistent and reliable basis.
