Changing payroll pay basis from Hourly to Salary

Question

Hi,&nbsp;I need to change our payroll pay basis from: Hourly to Salary.&nbsp;&nbsp;What are all the changes required to be done in MYOB?&nbsp;Our working hours are 37.5hrs per week. On Salary pay basis what will happen if an employee works less than 37.5hrs? Example, take annual leave or unpaid leave. How to adjust that in the payslips?&nbsp;We also have employees who work 15hrs a week and 30 hours a week. Will their leaves accrue proportionally?&nbsp;&nbsp;Will leaves accrual as usual? Annual, personal and long service leave?&nbsp;What about leave categories under - Wages and Entitlements?&nbsp;&nbsp;thank you,Carla&nbsp;&nbsp;

princess_r · Answer

Hi carlaislva&nbsp;
&nbsp;
Thank you for your post. I'd like to extend you a warm welcome to the Community Forum. I hope you find it a valuable resource.
&nbsp;
If employee working hours is 37.5 per week , they can accumulate annual leave or unpaid leave. As long as the leave payroll category has the box ticked option for automatically adjust base hourly or base salary details. It will automatically be deducted from the base salary amount based on the hours entered multiply by the hourly rate.&nbsp;
&nbsp;
For base salary employees, leave accrual should only be set to user entered amount per pay period and equals hour per pay period. Since there are no hours for employees on salary basis. The hours accrued will be the same for all salary employees even if they worked less than 37.5 hours. You'll need to manually adjust the hours accrued for the employees who worked less than 37.5 hours.
&nbsp;
Please feel free to post again I'm happy to assist.
&nbsp;
If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
&nbsp;
Cheers,
Princess

carlaislva · Answer

Hi,&nbsp;Princess_R&nbsp;&nbsp;thank you for your response. However it's not clear. Could you please clarify the follwing.&nbsp;I need to change Pay Basis to Salary for all employees, I don't want to have Hourly Pay Basis. Note that we pay on weekly basis.&nbsp;1. Will leaves such as annual leave, personal leave and long service leave accrue each week under Salary&nbsp;Pay Basis?&nbsp;1.a Will leaves accrue proportionally as well? Example, for employees that work 15 and 30hours a week. or Would it accrue as if it was a 37.5hrs employee?&nbsp;2. If an employee works less than their usual hours (37.5hrs) How to adjust/reflect that when processing their pays? Since on Salary Basis we cannot enter worked Hours. Example, in case employee had unpaid leave 7.5hrs unpaid leave and 30hs worked hours.&nbsp;3. If an employee takes leave Will that adjust automatically in the payslip? Example: employee had 4.5hrs of annual leave - his/her pay would be 33hrs worked hours + 4.5hrs annual leave = 37.5hrs for that week.&nbsp;4.&nbsp;Could I then change all wage and entitlement categories to calculate on 'Salary' instead of 'Hourly', and therefore not have to process any adjustments to a new category?&nbsp;thanks,Carla

princess_r · Answer

Hi carlaislva&nbsp;
&nbsp;
Thank you for your response.&nbsp;
&nbsp;
&nbsp;Generally speaking hourly categories are assigned to hourly based employees and salary categories to salary based employees. And to answer your questions:&nbsp;
&nbsp;
1. Yes, it will accrue leave every payroll you will process once set up correctly.
&nbsp; &nbsp; &nbsp; 1a. Accrued leave hours depends on the set up of calculation basis for the leave item.
2. You can manually edit the number of hours for each payroll you'll process. i.e., 30 hours entered as default, minus 7.5 hours absence or unworked. The difference of this will be deducted to the base salary amount
3. You need to manually enter the number of hours used for their leave minus the default worked hour if you are not using MYOB teams for timesheet
4. You can change the pay basis to salary .
&nbsp;
I would recommend to change the calculation basis to be equals times hours per pay period, which is typically used for salary employees. This will calculate the same amount of entitlement hours worked each pay regardless of how much the employee is actually paid.
&nbsp;
Our Help Article, has the detailed information you may refer to.&nbsp;

Leave and Entitlements

&nbsp;
Please feel free to post again I'm happy to assist.
&nbsp;
If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
&nbsp;
Cheers,
Princess
&nbsp;
&nbsp;

carlaislva · Answer

Hi&nbsp;Princess_R&nbsp;&nbsp;thank you for your response. However it is still not clear for me.&nbsp;You mentioned that I could manually edit the number of hours for each payroll you'll process. i.e., 30 hours entered as default, minus 7.5 hours absence or unworked. The difference of this will be deducted to the base salary amount - But How can I adjust the hours if I want to set up salary basis not hourly basis.&nbsp; Could you please clarify that or send an example, screenshot.&nbsp;Example, we have employees who works 22.5hrs week, others 30hrs a week and others 15hrs a week and others 37.5hrs a week.Will I have to set up indiviadual annual leave and personal leave categories for each type of working hours we have?&nbsp;&nbsp;I didn't understand this, could you please clarify.3. You need to manually enter the number of hours used for their leave minus the default worked hour if you are not using MYOB teams for timesheet.&nbsp;Could you please send an example (screenshot) of this:&nbsp;I would recommend to change the calculation basis to be equals times hours per pay period, which is typically used for salary employees. This will calculate the same amount of entitlement hours worked each pay regardless of how much the employee is actually paid.&nbsp;Thanks Princess.&nbsp;Carla&nbsp;

princess_r · Answer

Hi carlaislva&nbsp;
&nbsp;
Thank you for your response.
&nbsp;
To answer your questions.
Every entitlements such as Holiday/ sick leave or the annual/ personal leave can be accrued in any pay frequency. This will depend on the set up of your payroll categories. If you will be using the user-entered amount per pay period, you will select this option if you'll be manually enter the hours to be accrued per pay period. Let's say your employee take a 7.6 leave on weekly pay period. You'll need to enter this hours against the annual leave pay. This will be automatically deducted on the base salary pay.
While, selecting the equals (x) hours per pay period, you need to specify the fixed rate that should be accrued per pay period. Regardless of the employee worked hours.
&nbsp;
Pay basis will be salary and entitlement set up should stay as an hourly. Like your annual and personal leave pay. Select the option "Automatically adjust Base Hourly or Base Salary Details" on payroll category set up.
&nbsp;
For more information please refer to our Help Article,&nbsp;
&nbsp;
Please let me know if you have further question. I'm more than happy to assist.
&nbsp;
If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.
&nbsp;
Cheers,
Princess
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;
&nbsp;

Forum Discussion

Changing payroll pay basis from Hourly to Salary

Looking for something else?

Related content

CHANGING AN HOURLY PAY RATE

Payroll categories adjusting hourly rate

Employee changed from hourly to salary

Payroll adjusting hourly rate itself!

Base hourly rate incorrect

Change Payroll Category

Change wording of payroll category

Change of Payroll Day