Payroll Allowances
Hey, I have a payroll situation that I have never been in before. To give some context - We operate a scenic flight company. We cross hire aircraft by the hour off other companies in their low season to bulk up our fleet when needed. This year one of the planes we have hired has come with a pilot. The deal is, he will remain employed by his current employer and they will invoice us the costs of the plane hire and the "pilot hire" ( wages, PAYG, super and such) We are however required to pay him a fortnightly meal allowance. I am having trouble setting this up. I have linked an allowance account and set up the rate. My problem comes when I go to process the payroll. My accountant has advised that this allowance should be exempt from the superannuation guarantee ( this is paid through his regular wages) and, he also gets taxed quite high on this - As far as I was aware, the allowance is received in full and then receipts must be kept by the individual for tax purposes. Is there something I have done wrong in setting this up? I have changed the expense account from "salaries and wages" to "meals and accommodation" Is this ok? Any Help is appreciated.
