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Income allocation

At the end of every financial year, you might need to allocate income to the beneficiaries of a company, partnership or unit trust. MYOB can be set up for handling this type of income distribution.

Detailed below are the steps involved with setting up income allocation by modifying your category list then determining how you want to distribute the income.

This can be a complex area and the scenario below might not suit your needs. You should always seek financial advice regarding the best solution for your circumstances.

Create equity categories for each person

For each person you’re allocating income to, ensure you have all the necessary categories in the Equity section of your category list. Here’s an example of categories set up for a partnership:

3-0000 Equity

 3-1000 John Smith

   3-1010 JS - Retained Earnings
   3-1015 JS - Capital Contributions
   3-1020 JS - Current Earnings
   3-1025 JS - Drawings

3-2000 Rachael Smith

   3-2010 RS - Retained Earnings
   3-2015 RS - Capital Contributions
   3-2020 RS - Current Earnings
   3-2025 RS - Drawings

1. Set up equity categories for income allocation

  1. Go to the Accounting menu and choose Categories (Chart of accounts).

  2. Click the Equity tab.

  3. If you haven't already, click Create category and create equity categories for each person you'll be distributing profit or loss to. Need a refresher on creating categories?

    As a minimum, create:

  • A header category: This serves as a group header for the person (see 3-1000 in the example above).

  • A Retained Earnings detail category: This is the running balance of the person’s share of profits or losses from previous financial years (see 3-1010 in the example above).

  • A Current Earnings detail category: This is the person’s share of the current year’s profit or loss (see 3-1020 in the example above).

Depending on your entity type, you might also need other categories, for example to handle capital contributions and drawings.

Do I need to include the person’s name in every category name? For easy recognition in reports, you should include the person’s name, initials or another identifier in the category names. The category name can have up to 60 characters.

Can I use the default Retained Earnings (3-8000) and Current Earnings (3-9000) categories? No, you can’t use them as they’re system categories, and will show a $0 balance. You need to create new categories for each partner or beneficiary.

2. Distribute income to the beneficiaries

  1. Go to the settings menu (⚙️) and choose Income allocation.

  2. Choose your Entity type (CompanyPartnership or Unit Trust).

  3. For each person, choose the Header categoryRetained earnings category and Current year earnings category you set up for them earlier.

  4. In the Equity (%) column, enter the percentage distribution that applies to each person. When you’re finished entering each person’s distribution percentage, the total for this column must be 100%.

  5. When you're done, click Save.


How is the profit or loss distributed to each person?


The Current Earnings categories in the Categories (Chart of accounts) page and your reports will always show each person’s share of the current year’s profits or losses. At the start of the financial year, those amounts will be transferred to each person’s Retained Earnings category.

What if I change the percentages, or add and remove people throughout the year?


No problem. The amounts allocated to the Current Earnings categories will recalculate automatically.