In certain situations, you may need to change the Pay Type associated with an employee from PAYG to ABN or from ABN to PAYG. Once an employee profile is activated, the Pay Type associated with the employee cannot be changed so you will need to resolve this manually.
To transfer the employee's information to a profile with the correct user type, you will need to:
- Reverse any payments that have been made to the employee profile with the incorrect Pay Type.
- Close off the incorrect employee profile.
- Set up a new employee profile, selecting the correct Pay Type.
- Process a second lump sum pay for the employee's earnings under the correct Pay Type.
For example, if an employee has been initially set up as PAYG but should be an ABN subcontractor, you would reverse the payments associated with their PAYG profile, then close this profile and create a new employee with a Pay Type of 'ABN Subcontractor'.
Before You Start
You will need to determine whether the amounts previously paid to the employee need to be moved across to their new user profile. In this case, you will need to perform all the steps listed above.
If the amounts don't need to be transferred, you can simply complete steps 2 and 3.
Please note that Astute Payroll are not able to provide advice on how your employees' earnings should be reported.
Reverse Payments Made Using the Incorrect Pay Type
Before you reverse any amounts, you will need to confirm what has been paid to the employee in previous pay runs.
The Payroll Report can be used to determine the exact pay items used in the employee's pays and the amounts paid. You can filter the report to include only the relevant employee using the Report Settings > Employee Search filter.
Once you've determined the values, create a lump sum pay with negative values to reverse out what has already been paid to the employee.
Because the lump sum pay is a reversal, it will create a recoverable deduction once the pay run has been completed and marked as paid. This recoverable deduction isn't required because you will be processing the payment on a separate user profile, so you will need to write it off.
Close Off the Incorrect Employee Profile
Once you've processed the lump sum pay, you can go back into the incorrect employee profile and close off any active jobs to stop future timesheets generating.
Then, you may consider locking and archiving the profile so it's not accidentally used in future pay runs, and the employee can't accidentally log into the incorrect profile.
The profile can be archived once there are no active jobs. This will hide the profile from the default view in Users > Employees, or in employee-based reports.
Create a New Employee Profile
You will need to create a new employee profile that includes the correct Pay Type (ie the Pay Type that the employee's pay should be processed under).
When you create the new profile, adjust the Start Date for any new jobs so that only the relevant timesheets will generate.
Process a Lump Sum Repayment
You will need to create a second lump sum pay to repay all of the items and amounts that have been reversed from the incorrect employee profile using the new profile.
If this creates a net payment, you will need to confirm whether there are any discrepancies between the initial payments to the employee and what they should have received, and resolve this manually. For example, if an employee switches from PAYG to ABN, any PAYG that was incorrectly withheld may need to be paid back to them.
Where to Process Lump Sum Pays
Depending on whether you are switching from PAYG to ABN or from ABN to PAYG, you will need to process your lump sum reversal and lump sum repayment in either Process Payroll (for PAYG) or Process Supplier Payroll (for ABN).
- If transferring an employee from PAYG to ABN, create the lump sum reversal pay in Process Payroll and the lump sum repayment in Process Supplier Payroll.
- If transferring an employee from ABN to PAYG, create the lump sum reversal in Process Supplier Payroll and the lump sum repayment in Process Payroll.