Payroll

You can download this guide for offline use here.

 

Description: C:\Temp\logo.jpg

PAYROLL GUIDE

Revision 2 – October 2019

Contents

1. Contents 3

2. Terms Used in this Guide 5

3. Constructor Overview 8

1.1 About Constructor 8

4. Payroll Overview 9

5. Payroll Administration 10

5.1 Permissions to Access Payroll 10

5.2 General Ledger Key Accounts 13

5.3 Company Payroll Set-up 14

5.3.1 Pay Period 15

5.3.2 Pay Slip Options 15

5.3.3 Tax Calculations 15

5.3.4 Default Cost Allocation Method 16

5.4 Tax Scales 17

5.5 Entitlement Types 21

5.6 Payroll Components 23

5.7 Superannuation Funds 25

6. Employees 26

6.1 Creating Payroll Employees 27

6.1.1 Salaried Employee with Salary Sacrifice and Allowance 30

6.1.2 Hourly Rate Employee, Full Time, No Project Links 31

6.1.3 Hourly Rate, Part Project Links 32

6.1.4 Hourly Rate, Full Time Project Links 33

6.2 Accrual of Entitlements 36

6.2.1 Example 1 – Full Time Employee 36

6.2.2 Example 2 – Part Time Employee 37

6.3 Leave Loading 39

6.4 Long Service Leave 42

6.5 Leavers 44

7. Payroll Processing 46

7.1 Assign Cost Allocation 48

7.2 Add in Leave 50

7.3 Recalculate Superannuation 50

7.4 Add Text to Pay Slip 51

7.5 Record Pays and Generate Pay Run 51

7.6 Multi-Period Payments 55

7.7 Payments To Employees 56

7.8 Submit Single Touch Payroll 57

8. Pay History 61

8.1 Reprint or Email a Pay Slip 62

8.2 Payroll Journal 63

8.3 Delete Pay 64

9. The Tax Calculator 65

10. Payroll Reports 67

11. TROUBLE SHOOTING 68

11.1 Entitlement accrual is calculating incorrectly when Pays are Processed 68

11.2 Payroll Component Posting to Incorrect Account 69

11.3 Payroll Posted to Wrong Period 70

11.4 Tax Incorrect for an Employee 71

11.5 Employee/s missing from STP File 72

11.6 Duplicate Employee on the STP File 73

11.7 An Ex-Employee is appearing on the STP File 73

Terms Used in this Guide

In ensuring Constructor is as streamlined as possible, certain terms have been defined and are uniformly used throughout the program. Below is a quick Summary to help get familiar with them.

TIP: The terms listed here are written with a capital letter and in Bold throughout this guide, so you can refer back to this glossary if you are unsure of what the term means.

Accounts An Account refers to Assets, Liabilities, Income, Expenses and Equity, represented by individual codes.
Accrual An accounting method that records income and expenditure when they are incurred, regardless of when funds change hands.
Accrue Entitlements Any accrued but unpaid Entitlements.
Annual Hourly Entitlement The number of hours per annum an Employee is Entitled to.
Annual Leave An Entitlement that allows an Employee to be paid whilst having time off from work.
ATO The Australian Tax Office.
Award An enforceable document containing minimum terms and conditions of employment.
BAS An ATO compliance regulation that requires businesses that are GST registered to lodge a Business Activity Statement outlining GST payments and PAYG instalments.
Charge Out Rate A method of allocating costs.
Company Refers to your Company. This is opposed to Clients and Suppliers/Trades.
Contact A Contact record contains information regarding a Contact. Can you be linked to a Person, Supplier, Contractor or Client.
Cost Allocation Method A method of recording an Employees payroll costs. They can be overhead (charged to the Company) or Project based (charged directly to a Project).
Cost Centres A grouping of similar costs – primarily used for Budget monitoring. These are customizable for your Company.
Current Liabilities A Companies short term financial obligations that are due to be paid out, generally within one year.
Documents The Documents produced for the Employee.
EFT fileElectronic Funds Transfer A system of transferring money from one bank Account directly to another.
Employee An Employee refers to someone employed by your Company.
Employee Record The information needed for the system to be able to calculate the Employees Payroll. Found under Accounting, Payroll, Employees.
Entitlements The benefits paid to Employees by Employers. Examples include Annual Leave and Personal Leave.
Entry An Entry refers to a row within the Grid. Each Entry represents a different item.
Field Fields are where you enter your data, an Entry is made up of different Fields.
Filter A Filter is a keyword or value used to refine lists of information. Filtering refers to the process of applying a Filter.
Final Event Indicator A field on the STP file that informs the ATO that an Employee has left the business.
General Ledger A set of numbered Accounts a business uses to keep track of its financial transactions and to prepare Reports.
Generate Payment The creation of the journal to record Employee Pays. Can include the production of a Pay Slip.
Grid: The Grid refers to the table of Entries on a Screen made up of rows and columns.
GSTGoods and Services Tax A value added tax levied on most goods and services sold for domestic consumption.
ID A unique identifier for every new Project, Account, Client, Supplier etc AND every transaction.
Invoices Are Accounts Payable tax Invoices that are received from Supplier / Trades. These can be generated automatically from Purchase Orders or created manually.
Journals A record of financial transaction – these can be automatically generated by the system or manually entered by the user
Leave Loading / Rate An Employee taking annual leave may be entitled to an extra payment on top of their base pay rate. This is usually expressed as a percentage.
Long Service Leave A period of paid leave granted to an Employee who has served a specified period of continuous employment.
Naming Convention Formalizing a standard format for creating new ID’s and Descriptions so that information can be more easily and quickly found when filtering / searching.
Ordinary hours An Employees normal and regular hours of work, which do not affect overtime rates.
Pay Basis The basis upon which an Employee is paid. Examples include hourly or annual salary.
Pay Frequency The amount of time between an Employees pay days.
Pay Period A recurring length of time over which Employee time is recorded and paid.
Pay Slip A document given to an Employee, when they have been paid, detailing the amount of pay given and deductions made.
Payment Date The actual date on which an Employee is paid.
Payments Are money that is paid to Employees.
Payroll Component A Payroll Component is an element of an Employees Pay.
Personal Leave An Entitlement contained with NES (National Employment Standard) that applies to all Employees, regardless of Award, Agreement or Contract of Employment.
Planning Phase The second phase of the Project, where the Project is planned out.
Pro Rata A proportional allocation.
Process Payroll The process of compiling all the information to generate an Employee’s pay.
Project Budget An estimate of expenditure for a Project.
Project A Project refers to the job that a Client has employed you to do.
RDO Rostered Days Off. A day in a roster period that an Employee doesn’t have to work. These can be defined by an Award or an Agreement with the Employer.
Record Pays A journal entry in Constructor that removes money from the Company bank Account and transfers to the Employees Bank.
Remuneration Money paid for work or a service.
Report A Report in Constructor is a document generated from information stored in Constructor.
Role Role refers to the security permissions a User has in Constructor, relating to the work they perform.
Screen A Screen is a sub-window within the Constructor window. They can be resized, moved around and closed in the same manner that you would with any other program.
STP An ATO compliance regulation that requires Employers to send Employee payroll information to the ATO.
Summary A Summary is a more detailed output of the selected Entry or open Screen. Entries can have multiple Summary Tabs, each detailing a particular category of that Entry. These categories are used as the tab name for the Summary.
Superannuation Contribution A percentage of an Employees pay remitted to a Superannuation Fund.
Superannuation Fund An organizational pension program where Employees and Employers can deposit funds toward the retirement of the Employee.
Superannuation Threshold The dollar amount an Employees earnings must be greater than in a calendar month to qualify for an Employer to pay Superannuation.
Suppliers/Trades Suppliers/Trades refers to any person or entity that provides your Company with goods or services. Suppliers/Trades are a part of Accounts Payable.
Tax Free Threshold The dollar amount limit an Employee can earn each financial year without being liable to pay tax.
Tax Scales The percentage at which an individual is taxed.
Taxable Income The amount of Income used to calculate how much tax an Employee owes to the government in a given tax year.
Transactions Are all the accounting entries made in Constructor and include (but are not limited to), Journals, Claims, Receipts, Invoices, Payments.
User A User is someone from your Company who uses Constructor.

Constructor Overview

 

    1. About Constructor

Constructor is a fully integrated Sales, Estimating, Accounting, Payroll and Document Management software package for the construction industry. Constructor Management Software was developed by builders to work for the builders the way builders work. The program flows logically from step to step following the building process. As a builder, you will find it intuitive to use because it works the way you do.

Primarily it is used by builders in the residential home market who agree with our philosophy that:

“Major business efficiencies can only be found by implementing a software system that integrates all aspects of a business into a single cohesive database application.”

Constructor Management Software completely streamlines the entire business work flow for builders, providing Estimating tools that allow extremely accurate estimates to be built, quickly, using your own predefined Formulas and Components – to build your Bill of Quantities (BOQ).

Payroll Overview

Constructor’s Payroll module fully integrates with the Accounting and Project Budgeting features of the system.

The general workflow for introducing Constructor’s Payroll feature is as follows;

  • Set Company defaults
  • Import the current Tax Scales
  • Setup Administrative information such as Entitlement Types
  • Create Payroll Components for Employees (normal hours, superannuation, annual leave etc.)
  • Create Payroll Employees
  • Process Payroll
  • Record Pays and Generate Payments
  • Upload STP

Payroll Administration

Permissions to Access Payroll

Users that are required to access the Payroll functionality must be assigned appropriate permission. (If the User is an Administrator, then they will already have permissions).

The simplest and most effective way of assigning Payroll permissions is via a Role. To determine if there is already a Payroll Role set up, please log into Constructor as an Administrator and go to Tools, Security, Roles:

If there is a Role set up for Payroll, either double click to open it or highlight it and click Open.

The screen will open on the Task Access Tab. Go to the Members tab (1) and click New (2). The Users screen will open. If the User is already set up, double click the User Name to add to the Role. If they are not set up, click New (3):

Move to the Person tab (1) and enter a Username (2). Click on the yellow box (3) to expand the User details section and enter the User information (4):

Move to the Company tab (1) and add in as many Companies as are using Payroll by clicking Add Access to another Company (2) and selecting the Company:

Move to the Email tab (1) and enter the group email address (2) that the new User will be sending emails from. Fill in the Email Server Information. (If you don’t know this, please contact your IT provider for assistance):

Save & Close back to the Members tab in Roles and attach the new User:

General Ledger Key Accounts

A minimum of two Accounts must be set up in the Company’s Chart of Accounts. They should both be Current Liabilities. The BAS codes for both Accounts is “NA” as there is no GST effect from posting to these Accounts. (For details on how to set up Chart of Account records, please see the Accounting Guide)

  1. Payroll Liability Account to which a credit will be posted when Payroll is generated. Payroll tends to be paid soon after it is generated, so this Account is unlikely to retain a balance for any period of time.
  2. Provision for Superannuation Account. As Superannuation is paid and recorded on behalf of Employees, a provision Account must be maintained as a current liability. Superannuation amounts accumulate in this Account until such a time as they are paid (at least quarterly).

To link these Accounts as the Company Defaults for Payroll, go to System, Company:

Open the Company and go to the G/L Defaults tab (1). Set the Payroll Liability (2) and the Superannuation Provision (3). If you always pay Payroll from the same bank Account, then you can set a Payroll Bank.

Company Payroll Set-up

Company Payroll Set-up refers to default Payroll values that are populated whilst using Payroll. These are only default values and nearly all of them can be adjusted individually at the Employee or Component level.

To enter these defaults, go to System, Company:

Select and open the Company and go to the Payroll tab (1). The screen is divided into four sections:

  • Pay Periods (2)
  • Pay Slip Options (3)
  • Tax Calculations (4)
  • Default Cost Allocation Method (5)

 

Pay Period

This section contains the list of available Pay Periods. Pay periods can be altered individually for each Employee. The Start Date and the End Date will roll forward when pays are completed for that specific Period.

Pay Slip Options

  • Include Entitlements on Pay Slips: This will dictate whether a summary of Employee’s Accrued Entitlements will be printed on each Pay Slip. (This is mandatory in some states.)
  • Show Year to Date figures on Pay Slips: This will dictate whether Year to Date figures will be printed on each Pay Slip.
  • Show hours on salary employee Pay Slips: This will dictate whether hours will be printed on each Pay Slip.
  • Show days on Entitlement: This will print the Entitlement days taken on each Pay Slip.

Tax Calculations

Please enter the Superannuation Threshold and the Leave Loading Threshold. These thresholds will be used in the calculation of every Employee’s Pay. For Superannuation, if an Employee earns under this amount, then no Superannuation will be calculated.

If your State awards Leave Loading, enter the Tax free threshold in this section.

Default Cost Allocation Method

Cost Allocation has three methods and relates to Employees whose wages should be reflected directly within Project Budgets. The three methods are;

  • No Allocation: This method would relate to an Employee whose wages do not reflect within a Project Budget.
  • Direct Cost Method: This method allows you to display the Employee’s wages into the Project Budget at the hourly rate they were paid.
  • Pre-Defined Rate: This method allows you to allocate the Employee’s wages at a Pre-defined Rate determined by either yourself or your Accountant. For e.g. you may pay your Employee $25 per hour but allocate a cost of $35 per hour to the Project Budget. This rate can be altered for each Employee.

Tax Scales

Tax Scales are used by the system to calculate the amount of withholding (income) Tax on Payroll. The Scales are representations of the Tax brackets as defined by the Australian Tax Office. Extreme caution should be taken if you are attempting any modifications to Tax Scales. You should do so only under advisement of the ATO and/or your accountant. These Tax Scales are set up according to the Statement of Formulas for Calculating Withhold Amounts, issued by the ATO. The latest Tax Scales will always be available for download from Constructor’s website.

Go to the Constructor download site:

http://downloads.constructor.com.au/Members/Downloads.aspx

Enter your User name and Password (1) and click Login (2):

Click on the Filename (1) and it will download as a zip file to your Downloads folder (2):

Right click on the file and choose Extract All:

Browse to the folder you wish to keep Tax Scales in (1) and click Extract (2):

To import the Tax Scales you have just downloaded, use the shortcut or go to Accounting, Administration, Payrol, Tax Scales:

The Tax Scales Summary screen may be empty if you have never imported Tax Scales before or may have the previous year’s Tax Scales that you wish to replace.

If you are replacing Tax Scales, there is no need to remove the Tax Scales that have previously been imported. Constructor will automatically replace the Scales, also replacing the Tax Scales linked to your existing Employees with the new Scales.

Click the Import button (1), then the binoculars (2) to select the xml file previously downloaded (3). Click Open (4):

This will bring up the Import Tax Scales screen, showing the new Scales (1) and those that they are replacing (2). Click Import (3):

To see a success message:

Entitlement Types

The Entitlement Types that are maintained by the system are completely User definable.

Standard Entitlements would be:

  • Personal (Sick) Leave
  • Annual Leave
  • Long Service Leave
  • Rostered Days Off

To access and add/edit Payroll Entitlements, use the shortcut or go to Accounting, Administration, Payroll, Entitlement Types:

This will bring you to the Employee Entitlement Summary screen. Click New (1) to create a new Entitlement Type or Open (2) to view or amend an existing one:

Each Entitlement will have a Description. If you want it to appear on Pay Slips, tick Show on Pay Slip (1). If you Accrue Entitlements in the Accounts, enter an Expense Account (2) and a Liability Account (3):

Payroll Components

Payroll Components are used in Constructor to apply attributes to Employee Pay. These include:

  • Ordinary hours
  • Annual leave
  • Personal leave (sick leave)
  • RDO’s
  • Allowances and
  • Superannuation.

These types of Components are classified as Overhead Cost Components.

Constructor Payroll also allows you to create Direct Cost Payroll Components. These Components are still used to generate Pays but also link directly to the Cost Centre of a nominated Project Budget.

To set up Payroll Components, use the shortcut or go to Accounting, Administration, Payroll, Payroll Components:

This will open the Payroll Components Summary Screen. If you are creating a new Component, click New (1):

Give your Component a Description (1) and an ID (2), keeping in mind your Naming Convention. Decide on a Classification (3). If this is an Overtime Component, enter the rate in Multiply Rate by (4).

If the Component is to be Included in Taxable Income (5) tick this box. If it is ordinary work hours, tick Superannuation Affect (6). Choose an expense Account (7) and if it is to be charged to a Project Budget, choose the appropriate Cost Allocation Type (8).

Choose the appropriate Entitlements Affect (9).

  • Does Not Accrue Entitlements – the Component does not have any effect on Entitlements. Examples include any Allowances, Deductions or Overtime.
  • Contributes to Automatic Accrual of Entitlements – the Component does effect Entitlements. Examples include Ordinary time and Leave.
  • Contributes hours directly to Entitlement (manual Override) – the Component is Non-standard (eg. Not Annual Leave, Personal Leave, Long Service Leave). Most often used for Customized agreements with Employees. If using this, you would probably create a new Entitlement to link the Component to.

Superannuation Funds

This is where you set up the various Super Funds that your Employees are contributing to. Use the shortcut or go to Accounting, Administration, Payroll, Superannuation Funds.

It isn’t necessary to fill in all the available fields. As long as you have the fund name to attach to the Employee, then the remainder of the information is not compulsory.

Employees

There is a certain amount of Information that must be gathered for each Employee. This will help to determine their Pay, Leave Entitlements, Taxation and Remuneration.

 

Creating Payroll Employees

To create an Employee, use the shortcut or go to Accounting, Payroll, Employees:

This will open the Employees Summary. Click New (1). Start on the Contact tab (1). Click the button (3) to enable the Employee name fields and click Add (4) to enable the Phone, Email and Address fields. Fill in the Employee information.

Move to the Personal Details tab (1) and fill in the Employee’s Tax File Number, Date of Birth and Start Date:

Move to the Payroll Processing tab. This Tab contains:

  • Pay Frequency
  • Pay Basis (hourly, salary, casual)
  • Standard Pay Components
  • Cost Allocation Method
  • Charge out Rate
  • Superannuation Contribution

Following are various examples of ways to set up different Employee scenarios. It is important to note that what you are setting up here are DEFAULT Standard Components. When you go to Process the Payroll, these Standard Components will open with the Employee and can be amended at the time of Processing to take into account holidays, personal leave, linking time to a Project or a change in hours.

Salaried Employee with Salary Sacrifice and Allowance

The following example is for an Employee who is on a salary and the salary is not linked to the Project section of Constructor.

The Employee has a Superannuation Salary Sacrifice of $50 per Pay Period and a travel allowance of $50 per Pay Period.

Hourly Rate Employee, Full Time, No Project Links

The following is an example of an Employee who is on an hourly rate, full time with no links to Projects.

Hourly Rate, Part Project Links

The following is an example of an Employee who is on an hourly rate, full time with half the time linked to a Project and the other half on Administration.

Note, the assigning of the actual hours spent on specific Projects is done at the time of Payroll Processing

Hourly Rate, Full Time Project Links

The following is an example of an Employee who is on an hourly rate, full time with the entire time spent on site attending to Project work. There is an allowance for travel and another for telephone which is paid every Pay Period and is part of their Contract.

 

Move to the Taxation tab. Choose the Tax Scale (1) and fill in any of the other details that apply:

Move to the Entitlements Tab. Each Entitlement Type that has been set up will appear in the list of Entitlements on this screen. Enter the hours per year, which the Employee is to accrue.

For Annual Leave and Personal Leave, enter the yearly amount of the Entitlement, IN HOURS.

For Long Service leave and Rostered Days Off, make sure there is a zero in the first column Hours Accrued Automatically. (If this field is blank, the system will consider this a NULL in the database and will be unable to accrue correctly).

Move to the Payment Details tab and enter in the bank information for the transfer of Pay to the Employee’s bank account. Here is an example of an Employee who has all their Pay paid into one bank account:

Here is an example of an Employee who is paid half into a bank account and half cash:

And finally, move to the Superannuation tab and choose the Employee’s Super Fund:

Accrual of Entitlements

When setting up Employees, you will need to determine what to put on the Entitlements tab. This should be set as the Annual Hourly Entitlement. Always check the Employees Award if you are unsure.

Standard Entitlements include:

  • Annual Leave
  • Personal Leave
  • Long Service Leave
  • Rostered Days Off

However, if you have any other Entitlements you offer to your Employees, they can be configured.

Here are some examples of how Annual, Personal and RDO Entitlements can be calculated.

Example 1 – Full Time Employee

Works 5 days a week, 7.6 hours per day. Paid Weekly. Entitled to 4 weeks Annual Leave, 10 days Personal Leave and 12 RDO’s per annum.

TYPE HOURS PER DAY DAYS LEAVE PER ANNUM HOURS PER ANNUM = (HOURS PER DAY * DAYS LEAVE PER ANNUM)
ANNUAL LEAVE 7.6 20 20 * 7.6 = 152
PERSONAL LEAVE 7.6 10 10 * 7.6 = 76
RDO 7.6 12 12 * 7.6 = 91.2

When you are Processing Pays, the summary screen at the bottom of Process Pay Run will show the Entitlements that accrue each Pay Period.

Here are the calculations:

TYPE HOURS LEAVE PER DAY MULTIPLY BY DAYS IN PAY PERIOD ENTITLEMENT INCREASE PER PAY PERIOD
ANNUAL LEAVE 152/365 = 0.42 7 2.92
PERSONAL LEAVE 76/365 = 0.21 7 1.47
RDO 91.2/365 = .025 7 1.75

Example 2 – Part Time Employee

Works 3 days per week, 7.6 hours per day. Paid Fortnightly. Entitled to 4 weeks Annual Leave and 10 days Personal Leave per Annum (Pro Rata).

TYPE HOURS PER DAY DAYS LEAVE PER ANNUM (Pro Rata) HOURS PER ANNUM = (HOURS PER DAY * DAYS LEAVE PER ANNUM)
ANNUAL LEAVE 7.6 12 12 * 7.6 = 91.2
PERSONAL LEAVE 7.6 6 6 * 7.6 = 45.6

When you are Processing Pays, the summary screen at the bottom of Process Pay Run will show the Entitlements that accrue each Pay Period.

Here are the calculations:

TYPE HOURS LEAVE PER DAY MULTIPLY BY DAYS IN PAY PERIOD ENTITLEMENT INCREASE PER PAY PERIOD
ANNUAL LEAVE 91.2/365 = 0.251 14 3.51
PERSONAL LEAVE 45.6/365 = 0.125 14 1.75

If the Annual Leave entitlement for your Employees increases, for example, 1 extra day for each year served, then you should manually change the Entitlement at that time.

Leave Loading

When an Employee is entitled to accrue Leave Loading, the Employee record and the Leave Component must be configured for Leave Loading.

To set the Employee up for Leave Loading, go to Accounting, Payroll, Employees:

Select and open the required Employee. On the Entitlements tab, in the Leave Loading Details section, enter the Leave Loading Rate in the Rate box.

To set the Payroll Component to use Leave Loading, use the shortcut or go to Accounting, Administration, Payroll, Payroll Components:

Select and open the Leave Component. Go to the Entitlements Affect section and tick the box for This Payment attracts Leave Loading for any Employee with a Leave Loading rate (1):

Long Service Leave

An Employee is entitled to Long Service Leave (LSL) after a long period of working for the same Employer. Please check the laws in your State. In this example, LSL is available after 7 years.

Note: DO NOT set up the Employee Entitlement to LSL until the 7 years have passed, as the system will start accruing as soon as the Entitlement is attached.

Start on the Entitlement tab for the Employee (1), Long Service Leave row (2).

In the first column, Hours Accrued Automatically (3) enter the amount of LSL the Employee accrues annually. This is calculated as 52 divided by 60 times working hours per week (52/60 * hours per week). In this example;

52/60 * 38 = 32.94.

In the second column, Opening Hours Balance (4), enter the total amount accumulated by the Employee to Date. If you are unsure how to calculate this, please get advice from your Accountant or an on-line LSL calculator.

In this example, the Employee gets one week of LSL for each 60 weeks of service and has been working for this Employer for 7 years;

(Total weeks worked so far) divided by 60

52*7/60 = 6.65 weeks.

Constructor uses hours to calculate Entitlements, so work out the number of hours worked per week:

38 * 5 = 190

6.65 weeks * 190 hours per week = 1236 hours

After both these columns are populated, each Pay will see the Employee accrue in the column Hours Accrued to Date (5):

Once the Employee begins to take their LSL, you will need an LSL Component to add to their Pay Slip. Go to Payroll Components and set up the LSL Component:

Leavers

This section explains how to terminate an Employee in Constructor. Open the Employee Record:

Go to the Payroll Processing tab (1) and untick Employee is Active (2). A message will immediately pop ask asking if you want to continue. Click Yes.

The system will move immediately to the Personal Details tab (1), populate the End Date with Today’s Date (2) and pop up a message asking if you want to continue.

Click OK and if necessary, Amend the End Date. The Employee is now inactive and a leaver.

On the STP file, they will have a Final Event Indicator flag set in this Pay Period.

Note, the Employee will continue to appear on the STP file until the end of the Financial Year, though their pay will stop accumulating.

 

Payroll Processing

 

Payroll Processing involves creating the Employee’s Pay, producing a Pay Slip, Paying the Employee and uploading the information to the ATO via Single Touch Payroll (STP).

For Payroll Processing either use the shortcut or go to Accounting, Payroll, Process Payroll:

You may have more than one Payroll Frequency type applied to your Employees. For example, you may pay admin staff fortnightly and trades weekly.

Choose the Pay Frequency for the Payroll you are preparing (1). Select the Employees (2). Make sure the Payment Date and Pay Period is correct (3) and click Load Pays (4):

This will bring up a list of Employees to be paid on this Pay Run. If you need to edit any of the Components that are set up against the Employee (on their Payroll Processing tab) or allocate costs to Projects, highlight the Employee (1) and click Edit Pay and Allocate Costs (2):

Assign Cost Allocation

The following screen will open when you click Edit Pay and Allocate Costs. There will be a summary of Components, hours and rates (1). These come directly from what has been entered as Standard Pay Items on the Employee Record, Payroll Processing tab. There is also information regarding Superannuation and Tax (2).

To allocate any of the Components to a Project, click the drop down arrow in the Component field (3). A list of the Components already attached to the Pay will pop up. Choose the Component you are allocating.

Add in the Project, Cost Centre and hours related to the Project. You can add as many lines here as necessary.

Once this Pay has been Processed, the Allocated Cost will appear on the Project Budget under the Payroll column (1). IF the User has appropriate permissions, hover and click the binoculars to see a breakdown of the Costs:

Add in Leave

If you need to add any days of Leave to an Employee, click the New button (1) and choose the Leave Component from the list that pops up. This will add a line for Leave to the Pay Slip (2). Amend the hours against both the Leave Component and the Wages Component (3). If you need to go ahead and allocate costs, do so after you have amended the Pay Slip section (4).

Recalculate Superannuation

If a change has been made that requires a recalculation of Superannuation, the Reset Superannuation (1) button will become active and should be clicked.

Add Text to Pay Slip

It is possible to add text to an Employee’s Pay Slip, if required. In Edit Pay and Allocate Costs, at the bottom, you will see the place to enter such text (1):

Record Pays and Generate Pay Run

When the Pays are all prepared, Record Pays and Generate Payments (1). If Pay Slips are to be Printed and/or Emailed (2), tick the appropriate box/es:

When Record Pays and Generate Payments is ticked, a message will pop up:

If Yes is chosen, another message appears:

If you choose to view the Payments, you will see the Pay Slip:

Or an Email:

Along with the Payment screen:

The Payment will have already been recorded in the system, so there is no need to perform any action on this screen.

 

Multi-Period Payments

Process Payroll allows Payments to be made to an Employee that cover multiple Pay Periods. For example, a sales person who has earned commission covering several Pay Periods or Employee holiday pay that cover multiple Pay Periods.

Click Process Payroll and enter the Pay Period. Click Load Pays. Highlight the Employee/s and click Edit Pay and Allocate Costs.

Amend the Component, including the Periods and hours (1). Click Reset Superannuation (2):

 

Payments To Employees

 

Most Employees are paid by EFT (Electronic Funds Transfer).

To create the EFT file, use the shortcut or go to Accounting, Banking, EFT File:

The EFT generation screen is also used by Accounts Payable, so there may also be Purchase Ledger Payments in the list (depending on User permissions). IF you want to generate the file for Employees only, then filter it so that Suppliers are removed. Check the EFT File Path (this is where the file will be saved), the Process Date and the Bank Account from which the Payments will come (1). Click Generate (2):

You will receive a Success message:

The file can now be uploaded to your banking software.

If you are paying any of your Employees by another method, the make sure the Employee Record is set to that method on the Payment Details tab. Then they won’t come up on the EFT File.

Submit Single Touch Payroll

Once the Payroll has been paid, the Single Touch Payroll file (STP) must be submitted to the ATO.

Please note that submitting Single Touch Payroll means that the generation and lodging of the PAYG Summary Withholding Report will no longer be required. This is applicable to financial years after the 30th June 2019.

Employees will be able to log into their MyGov account and see their Pay information.

To open STP, either use the shortcut or go to Accounting, Payroll, Single Touch Submissions.

Click the Generate button (1). Choose the date of the actual Payment to the Employees (2). If it is the final pay of the year, i.e. the end of June, then tick box (3):

This message will pop up:

If you say Yes, the file will be sent off to the ATO. If you say No, you will be able to view the file to make sure the information is correct:

To check the file, either double click or highlight it and click Open (1):

The next screen always opens on the History tab (1):

Move to the Content tab (1). The information should now be visible (2). The first columns relate to the Company. To view Employee information, scroll to the right.

Pay information is cumulative.

If an Employee has more than one Allowance, they will have duplicated lines on the file. That doesn’t mean they have been paid multiple times! It is simply the way the file displays the Allowances:

If there is a Leaver in the Pay Period and they have been made a Leaver in Constructor, there will be an Y in the field Final Event Indicator:

Once the file has been checked and you are certain the figures are correct, close the Submission Details, make sure the file is highlighted (1) and click Lodge (2). The Status will change to Pending (3):

It takes approximately 45 minutes for the file to be processed and a message sent back. Please note, this screen will not refresh automatically. To find out the Status of the Submission, highlight the line and click Check Status (1). You will receive a message regarding the Status Change. If it is a Success message, there is no need to open the file. Say No to the message. If it is an Error message, call the Constructor Support desk.

Pay History

After Pay has been processed, it may be necessary to Reprint or Email a Pay Slip, look at the Journal posting information or to Delete the Pay record all together. Either use the shortcut or go to Accounting, Payroll, Pay History:

Reprint or Email a Pay Slip

Use the filtering bar to find the Employee and the date of the Pay Slip you want to Reprint or Re-Email (1). The Pay Slip Details will appear at the bottom of the screen (2).

To Reprint, click Print (1), Print selected Pay Slips (2):

To Email, click the Email button (1):

Payroll Journal

To view the Payroll Journal, from the Pay History screen, highlight the Pay and click Journal (1). The posting will be visible but cannot be amended.

Delete Pay

 

To Delete a Pay record, from the Pay History screen, highlight the Pay an click the Delete button (1). You will see a message asking if you want to go ahead and delete the Pay Record:

If the Payment has already been recorded, you will see the below message:

Therefore, it is important to Delete the Payment BEFORE trying to Delete the Pay Record.

 

 

The Tax Calculator

There is a Tax Calculator available to use as a check. To open the Tax Calculator, use the shortcut or go to Accounting, Payroll, Tax Calculator.

 

To use the Tax Calculator, choose the Tax Scale (1) and the Pay Frequency (2). IF the Employee has regular Income, then use the left-hand pane (3). If the Employees Income comes in uneven increments, then use the right-hand pane (4):

 

Payroll Reports

To access all Reports in Constructor Version 3, go to Reports, All Reports.

  • Highlight Payroll (1) and the available list will show:
  • Employee Pay Slips
  • Payroll Payment Summaries
  • Entitlement Accrual Details
  • Superannuation Contribution Listing
  • Salary and Withholding Tax Listing
  • Payroll Activity Summary
  • Payroll Project Cost Allocation Summary by Employee
  • Payroll Project Cost Allocation Summary by Project
  • Employee Cost Plus Charge Sheets

Double click a Report to run it.

TROUBLE SHOOTING

Entitlement accrual is calculating incorrectly when Pays are Processed

On the Employee record, check that the Annual Entitlement is correct on the Entitlements tab. This should be the hours per year that the Employee is Entitled to:

Also, go to the Payroll Processing tab and check the Pay Frequency (1), Hours in Pay Period (2) and Hours included in Standard Pay (3):

Payroll Component Posting to Incorrect Account

If the Payroll is posting to an incorrect Account, there are two places you need to check. The first is the Component itself. Make sure the General Ledger Account to Debit (1) is correct.

The second place is on the Company Record, GL Defaults tab. Check the Payroll defaults (1):

Payroll Posted to Wrong Period

If the Payroll has posted to the wrong Period, there is no easy fix. Firstly, you would need to remove the Payments (if they have been processed). The Payment must not have been Reconciled on the Bank.

Go to Accounting, Banking, Payments. Filter the screen so that you are seeing the relevant Payment/s. Highlight the Payment/s and click Delete (1):

Then go ahead and Delete the Pay. From the Pay History screen, use the filter to find the records. Highlight them and click the Delete button (1). You will see a message asking if you want to go ahead and delete the Pay Record:

Now you can reprocess the Payroll into the correct period.

Tax Incorrect for an Employee

On the Employee Record, go to the Taxation Tab (1). Check that the Tax Scale is correct (2).

Check that all the correct Components are set against the Employee Record (2) on the Payroll Processing tab (1). For example, there may be a Loan Repayment that is being taken into consideration for the calculations.

There may be a Component that has been setup incorrectly. For example, if this Repayment of Loan Component was set up with a classification (1) of Gross Wages or Fringe Benefit tax, the Tax for the Employee may be incorrectly calculated.

If the Tax for all Employees is wrong, you may not have the up to date Tax Scales. Please see the Tax Scales section above.

Employee/s missing from STP File

If an Employee is missing from the STP file entirely, please check the Employee Record in Constructor. Pay particular attention to the Contact tab (1). Employees must have a phone number, email and address (2):

Duplicate Employee on the STP File

The STP file will appear to duplicate an Employee if they have more than one Allowance.

This is simply the way it is displayed and is normal.

An Ex-Employee is appearing on the STP File

If you had an Employee that left some time ago, but they are still appearing on the STP File, this is perfectly normal. Their Cumulative Pay should not be incrementing, as you are not actually paying them. Once the financial year is over, the Employee should no longer appear on the File.