How to handle common payroll scenarios
Background: ContactsLaw's payroll system is tailored specifically to the needs of small to medium-sized law firms, and is by no means a comprehensive payroll package. It does, however, have several provisions in its design which allow less-common pay scenarios to be handled without the need for a third-party payroll system.
General salary sacrifice arrangement
In situations where a
member has a salary sacrifice arrangement, the adjustment column can be used to model this:
- Calculate the salary sacrifice figure for the pay period (usually constant for the duration of the arrangement) and enter this as a negative adjustment on the payroll activity.
- Re-calculate the tax withheld based on the (gross + adjust) figure.
Voluntary superannuation contribution (before-tax)
Use the dedicated 'Payee super' column to record a voluntary superannuation contribution. Be sure to calculate the tax withheld on the gross pay figure less any voluntary superannuation contribution.
Compulsory payments to a third-party
A situation may arise where a third-party is to be paid directly out of a particular member's normal (after-tax) pay. This method also applies to situations where a member elects to split their pay over multiple bank accounts:
- Enter the amount of the payment as a negative figure in the adjustment column.
- Do not change the tax withheld figure (unless the gross figure has changed).
- Post a separate general payment (or direct debit payment) debiting the salaries controlled account to the third party.