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CTL's avatar
CTL
Trusted Partner
5 years ago
Solved

Worker's Comp reduced to 65% of average earnings

I have a bit of a tricky scenario that I need some help with please.  We have an employee on worker's comp that has completed the first 26 weeks of average earnings payments.  I have now been instruc...
  • Steven_M's avatar
    Steven_M
    5 years ago

    Hi CTL 

     

    Sorry I did slightly misinterpret the original enquiry based on the information that was originally provided.

     

    If you want the superannuation to be calculated on the reduced wage amount then you would be looking at creating a wages payroll transaction that has the employee linked to it which is based on the reduced amount. You would also need to ensure that calculation basis for your superannuation category is set to be x% of gross wages and have ensured that the new category is NOT exempt i.e. NOT ticked in the exempt window of that superannuation category.

     

    By doing this, you will have another payroll category on the employee's pay that you would place the number of hours against, which will pay them the reduced amount and have superannuation calculate on that reduced amount.

Steven_M's avatar
Steven_M
Former Staff

Hi CTL 


If I have understood the situation correctly, you basically want a payroll set up like the following pay:

  • Which is overall paying the employee $1,500 (across Base Hourly and Overtime)
  • But the employee is actually being paid 65% of that $1137.50
  • While still having the superannuation calculating on the full amount of Base Hourly

I've removed PAYG for this particular pay to keep it simple

 

The following has been achieved by:

  • Creating a deduction category for that employee. This deduction has the calculation basis of 35% of Gross Wages and can be created via Payroll>>Payroll Categories>>Deductions>>New. What this deduction category will do is reduce the employee's gross earnings to be 65%, by deducting 35% of it.
  • The superannuation category has been set up have the calculation basis of 9.5% of Gross Wages. I've exempted the categories that I don't wish to have been included in that calculation i.e. Overtime.
CTL's avatar
CTL
Trusted Partner
5 years ago

Hi Steven_M 

Thanks for your reply.  Sorry, it appears my post was a tad confusing.  Here is the break down of the wages:

Average wages:  $1,400.00 ($1,064.00 base hourly and $336.00 overtime).

Reduced wages:  $1,400.00 x 65% = $910.00 ($691.60 base hourly and $218.40 overtime).

 

How do I pay super guarantee on $691.60?  Can I reduce the original hourly rate of $28.00 x 65% = $18.20 or is there another way of doing it?  Thanks Steven, I appreciate your help with this.

  • Steven_M's avatar
    Steven_M
    Former Staff
    5 years ago

    Hi CTL 

     

    Sorry I did slightly misinterpret the original enquiry based on the information that was originally provided.

     

    If you want the superannuation to be calculated on the reduced wage amount then you would be looking at creating a wages payroll transaction that has the employee linked to it which is based on the reduced amount. You would also need to ensure that calculation basis for your superannuation category is set to be x% of gross wages and have ensured that the new category is NOT exempt i.e. NOT ticked in the exempt window of that superannuation category.

     

    By doing this, you will have another payroll category on the employee's pay that you would place the number of hours against, which will pay them the reduced amount and have superannuation calculate on that reduced amount.