Fulltime to Casual employment change

Hi CollTspt,

If the employee is staying on the books and is just changing from full-time to casual, you generally wouldn’t treat this as a termination in AccountRight. Keep the same employee card and update their working arrangement details, which helps their payroll continue to report correctly to the ATO and means the end of year process doesn’t change for you or the employee. A few things to keep in mind:

• Process their final pay under the current full-time setup first before updating the card. This helps make sure the leave balances are fully up to date before any payout is done.
• If they’re moving from permanent to casual and they’ll no longer be entitled to paid leave, any unused leave may need to be paid out. MYOB also notes that long service leave may need to be paid out too, depending on the rules that apply, so it’s worth checking Fair Work or confirming with your payroll adviser if needed.
• For the unused leave payout, MYOB recommends using a separate wage category such as Unused Holiday Pay / Unused Annual Leave, linking that category to the employee, and linking the related entitlement accrual category to that unused leave wage category so the balance reduces correctly.
• When processing that unused leave pay, it should be done as a separate pay, with the leave hours entered against the unused leave category and all other hours and amounts kept at zero except PAYG withholding and super. You also don’t want leave accruing on that payment.
• After that, update the employee card to the new Employment Basis, and if their Pay Basis is also changing, update that too. It’s also a good idea to review all payroll details and entitlements, and add a note to the Contact Log for your records.
• Once the employee is paid again under the new setup, their latest year-to-date payroll information will be sent to the ATO. You can also send an update event manually if needed.

For reference, this MYOB help article steps through the process here: Changing an employee from full time, part time or casual

Regards,

Sai