What are Pay Categories?
Pay Categories define how employees are paid. They are used for ordinary hours, overtime, allowances, leave, training, travel, and other payment types.
Pay Categories also control payroll behaviour such as super, PAYG treatment, payroll tax treatment, leave accrual, and how items appear in payroll reporting.
Where should setup start?
Always start with Pay Categories.
The client needs to confirm which payment types matter for their business. Once the key pay categories are confirmed, the rest of the payroll setup can be built around them.
Can Pay Categories be edited?
Some pay categories are marked as System categories. These are linked to payroll and ATO requirements and cannot be edited.
Other pay categories can be edited if they are not locked by previous use.
Why can’t I delete a Pay Category?
If a pay category has already been used in a pay run, it generally cannot be deleted. This protects payroll history and reporting accuracy.
If a duplicate or incorrect category has already been used, the usual approach is to rename, disable, or stop using it going forward.
What is a fixed allowance?
A fixed allowance is used where the payment is based on units rather than ordinary hourly earnings. The employee is still paid in dollars, but the item behaves differently for payroll and STP reporting.
Fixed allowances generally do not accrue leave because they are treated as allowance items, not ordinary earnings.