Employment Hero comes pre-loaded with a comprehensive range of pay, leave, and deduction categories, all meticulously configured according to ATO guidelines to ensure optimal compliance and ease of use. For this reason, we strongly advise against modifying or deleting any system categories.
If you find it necessary to update a system category, please reach out to us via live chat in your Employment Hero platform for assistance. To add additional categories, please refer to the instructions below and use the links to learn how to manage each type of category.
This article explains how to add:
- Pay categories
- Leave categories
- Deduction categories
- Expense categories
- Employer liability categories
Pay Categories
In an organisation, there are numerous employee payment rates, which vary based on the assigned pay conditions for each employee. By automating these rate calculations, you can significantly reduce the time spent on managing penalty rate multipliers, providing accurate loading rates, and more.
The Pay Categories feature enables you to create new pay categories, specifying the unit of accrual, super rate, rate loading, and payment classification. Moreover, you can easily edit any existing pay categories and remove those that are no longer needed.
Click here to learn how to manage payroll categories on the Payroll platform
Leave Categories
The Leave Categories feature provides a system for your employees to request time off under specific predefined categories. These categories enable you to monitor the various types of leave your employees take and keep track of their accrued balances. This empowers your organisation to effectively manage and generate reports on employee leave activities.
With the Leave Category feature, you can easily create new leave categories and specify their types, payment setup, and applicable leave loading rates. It also allows you the flexibility to modify any category information in case of changes and remove any category that becomes obsolete or irrelevant.
Each leave category requires a default accrual rate, but the system also supports multiple accrual arrangements through Leave Allowance Templates. This means you don’t need to create duplicate leave categories for different accrual setups—simply apply a Leave Allowance Template to configure the appropriate accrual settings for different employees.
Helpful Hint
A crucial consideration while constructing your platform and undergoing parallel testing is to ensure that the feature of negative leave balances is turned off. Activating negative leave balances during this phase can significantly distort your testing outcomes and make accurate comparisons difficult.
Modifications made to your company's leave category settings won't affect current employees; they will solely apply to new employees added to the payroll afterward.
Important
If an employee is not assigned a leave allowance template, the leave category settings will automatically be in effect for them. If you wish to modify the leave settings for specific employees, you will have to do it individually. To achieve this, navigate to the employee file and access the Leave Allowances screen. From there, you can make the necessary adjustments as per your requirements.
Click here to learn how to manage leave categories on the Payroll platform
Deduction Categories
Important
You will set up your employee deductions at a later point under Pay Run Inclusions. You are just setting up the category at this stage.
If an employee is not assigned a leave allowance template, the leave category settings will automatically be in effect for them. If you wish to modify the leave settings for specific employees, you will have to do it individually. To achieve this, navigate to the employee file and access the Leave Allowances screen. From there, you can make the necessary adjustments as per your requirements.
A payroll deduction involves deducting funds from an employee's pay before they receive their pay check. Some deductions are required by law, while others result from private agreements between employers and employees. The default setup in a payroll platform for a new business includes many basic deduction categories.
The Deduction Categories feature allows you to create a new deduction category and provide specific details, including the category, external ID, payment classification, and liability general ledger mapping code. It also enables you to edit existing information and delete records that are no longer needed.
Click here to learn how to manage deduction categories on the Payroll platform
Expense Categories
Expense categories in payroll refer to different types of expenses that employees incur during their work. These categories are used to classify and track various expenses, making it easier for businesses to manage their finances and accurately reimburse employees for eligible expenses.
Click here to learn how to manage expense categories on the Payroll platform
Employer Liability Categories
Employer liabilities in payroll refer to an employer’s legal and financial obligations, including paying wages, withholding taxes, managing benefits, and complying with labour laws.
Most liabilities are tracked through the Chart of Accounts (COA), so only unique categories need to be set up in your payroll system.
If you're using an accounting integration, some details may be auto-filled from your accounting records. Setting up liabilities correctly ensures compliance and efficient payroll management.
Click here to learn how to manage your liability categories on the Payroll platform