Allowance codes are used for earnings that are paid outside the employee's normal Work and Leave entries.

They can be used for fixed payments, payments based on units, payments based on time, or payments calculated from other earnings.

The available Classifications vary between jurisdictions and determine how the allowance is treated for payroll purposes.

First, create a new entry under the Allowance codes category:

Complete the fields as follows:

The Abbreviation is the short identifier used for the Allowance code.

It can also be used when importing pay transactions into SmoothPay.

Choose an abbreviation that clearly identifies the type of work being paid.

The Description is the display name of the Work code and is what is shown on a payslip

Use a description that clearly identifies what the Work code represents.

The Classification determines how SmoothPay treats the allowance for payroll purposes.

Available classifications vary between jurisdictions.

For details of the classifications available in your payroll, refer to the relevant:

The Calculation determines how the value of the allowance is calculated.

The available methods are:

Use Amount per pay period where the payment is based on a number of pay periods.

The Units are linked directly to the number of pay periods the current pay process represents, while the Rate is the amount to pay for each period.

For example:

The Rate remains flexible and can be entered as required when processing the allowance.

Use Units × Rate where both the quantity and the rate need to be entered freely.

For example:

This method is completely flexible and does not rely on anything other than what you enter as the Units and the Rate.

Use Time × Rate where the allowance should be calculated from time already recorded against selected Work and Leave codes.

When this method is selected, the Calculates on section is used to define which time-based pay codes should contribute to the calculation.

You can select Work and Leave codes individually, or use the available selection controls:

SmoothPay totals the units recorded against the selected Work and Leave codes and uses that time as the basis of the allowance calculation.

For example, if the selected codes contain a combined total of 40 hours and the allowance Rate is $2:

Use Earnings × Rate where the allowance should be calculated from the value of selected earnings rather than their units.

The Calculates on section determines which earnings are included.

Unlike Time × Rate, this is not limited to Work and Leave codes. The available earnings can include:

SmoothPay totals the value of the selected earnings and applies the Rate to that value.

This makes Earnings × Rate suitable where an allowance needs to be based on the value of other earnings rather than the amount of time worked.

The Calculates on section is used by calculation methods that depend on other pay transactions, and will only appear if either Time x Rate or Earnings x Rate have been selected as the Calculation.

It allows you to select which pay codes should form the basis of the calculation.

The available controls include:

Individual pay codes can also be selected or cleared manually.

For Time × Rate, the available list consists of Work and Leave codes because the calculation uses their units.

For Earnings × Rate, the list also includes Allowance codes because the calculation uses the value of earnings.

Select Payslip YTD? if the year-to-date value for this Allowance code should be displayed on the employee's payslip.

Select Spread costs automatically where the cost of the allowance should be distributed across the applicable costing from the employee's other pay transactions.

For more information, refer to:

Select Shift work indicator where the Allowance code should be identified as relating to shift work.

Whether this is required will depend on the purpose and Classification of the allowance.

Where GST functionality is enabled, select the appropriate GST rate if GST should apply to the Allowance code.

For more information about GST configuration for contractors, refer to:

Select Inactive when the Allowance code should no longer be available for new use.

Making the code inactive removes it from normal selection while retaining its existing payroll history.