How to pay Leave Loading
Leave loading is an extra payment given on top of annual leave pay. Depending on your award or the enterprise agreement, leave loading is usually around 17.5% extra pay on top of annual leave pay.
In Myaccountant’s Payroll, you will need to add Leave Loading as a separate line item in the employee’s payslip.
By default, superannuation will not be applied to this pay item. As each business situation is different, refer to the ATO guidelines on when superannuation applies to annual leave loading, and update the superannuation settings for this pay item if needed (explained below in detail).
Follow the below steps to create and add the annual leave loading pay item to the employee’s payslip:
- Go to Pay runs and open the pay run in which you want to pay the annual leave and leave loading.
- In the pay run, select the employee by clicking on the Open button.
- Next, click on Add Pay Item button, and then click on New Pay Item button.
- In the name label, enter “Leave Loading” or name of your choice and in the Payment Type drop down, select “Other leave”. Then click on Save button. The Leave Loading pay item should appear in the Pay Item list.
- Now click on +Add button to insert the Leave Loading pay item in the employee’s pay run.
- In the quantity/hours label enter the annual leave hours taken, and in the Rate label enter the Leave Loading rate calculated as the annual leave loading percentage times the standard hourly rate. For example, the annual leave loading is 17.5% and standard hourly rate is $20, enter $3.5 (17.5% x $20).
To update the superannuation settings, follow the below steps:
- In the side menu, in Payroll options, click on Pay Items.
- Then click on Payment Types tab.
- Find “Other Leave” payment type in the list, then click on Edit.
- Check the box for “Apply Super”, then click on Update button to save changes.
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