When processing a backpay in WageEasy you will need to calculate the difference between the new hourly rate or allowance and the old rate.
Once the dollar amount has been established, the backpay, can be paid in three different ways, depending on the period of time that it has been calculated over.
If the amount was accrued more than 12 months before the payment, it will need to be reported as Lump Sum E.
Go to: Setup, Allowances, Add, Next.
Select Standard Allowance, Next.
Description: Lump Sum E.
Type: Addition, Frequency: Each Pay.
Tick the Taxed and Include in Super Calculation boxes.
Leave the Amount: blank, Next.
Reporting Group: Lump Sum Payments
Reporting Subgroup: E- Lump Sum E, Next
If you use the General Ledger, set up the codes. Next
If the amount refers to the last 12 months, it can be paid using Lump Sum.
Go to Wages, Next, under Adjustments - Lump Sum Payments, select Lump Sum, Add, Next.
Under Description: select Back Pay,
In the STP Phase 2 section, use the drop-down to select the Reporting Group
If you are backpaying an allowance then select Allowance Items, you will also need to select the correct Reporting Subgroup: Next.
Enter the amount of the Backpay and tick the Include in Superannuation calculation box if required, Next
Select the Date range, that the back pay relates to, select the radio button if you want it taxed over the relevant PPE dates or paylsips processed in that date range. Next, Next, Next, Finish
When paying a backpay that relates to the last 12 mths you can also pay it as an Allowance, called Back Pay, with your normal payroll processing.
If you don't already have this allowance set up, use the same procedure as for Lump Sum E, changing the Description: to Back Pay and the Reporting Group: to Gross or the reporting group it belongs to, for eg: if you need to backpay overtime, the Reporting Group would be Overtime.
For further information on processing back payments, you can refer to the Australian Tax Office