Changes to working arrangements can be updated in an employee's record. This includes changes to pay rate, hours worked, and entitlements. Keeping the same employee record in MYOB also ensures the employee's details will continue to be reported correctly to the ATO, and the end of year process won't change for you or the employee.
While we can't tell you what needs changing in MYOB, we can provide some guidelines and tell you how to make the changes.
Check the rules with an expert
If you're not sure what an employee is entitled to under their new arrangement, the Fair Work website is a good place to start. You'll also find lots of experts on our community forum who are happy to provide advice on your situation.
Here's a few common scenarios and how to treat them.
Scenario | Details |
|---|---|
An employee changes from part time to full time (or vice-versa) | The employee may still be entitled to the same leave entitlements. If so, change the Employment basis in the employee's record and check their other payroll information. If the employee is also changing from an hourly pay rate to an annual salary (or vice-versa), you'll also need to change the Pay basis in their record. See Update the employee's record below. |
An employee changes from casual to permanent | Unlike some casual employees, full time and part time employees generally accrue entitlements. In this case, change the Employment basis in the employee's record, and ensure the applicable entitlements are assigned. If the employee is also changing from an hourly pay rate to an annual salary, you'll also need to change the Pay basis in their record. See Update the employee's record below. |
An employee changes from permanent to casual | Full time and part time employees generally accrue entitlements, but casual employees typically don't. This means when an employee changes to a casual basis, if they are no longer entitled to paid leave, any unused leave will need to be paid out. If the employee has accrued long service leave, this may also need to be paid out. See Pay out annual leave below. You'll also need to change the Employment basis and Pay basis in the employee's record and, if required, pay out unused leave. See Update the employee's record below. |
If your scenario isn't covered, speak to your payroll advisor for help or contact us.
Before you begin
Process the employee's last pay (under their current arrangements) before paying unused leave or updating their record. This ensures their annual leave balance is updated prior to paying it out.
Pay out unused annual leave
If an employee has accrued annual leave which needs to be paid out, here's how to do it.
1. Work out how much leave to pay
Run the Leave balance report to see the employee's accrued leave.
Go to the Reporting menu and choose Reports.
Click the Payroll tab and click to open the Leave balance report.
For the Date range, choose This financial year and choose the employee.
Take note of the Available hours of annual leave.
Here's an example where Alan Long is owed 106.92 hours of annual leave.
Now you can get ready to pay this unused leave by ensuring the right pay items are set up in MYOB. Learn how in the next task.
2. Set up an unused leave wage pay item
To clearly identify an unused leave payment, it's recommended to use a separate wage pay item. By default, such a pay item should exist in your MYOB file.
Here's how to check that it's set up correctly.
Go to the Payroll menu and choose Pay items.
On the Wages and salary tab, find the Unused Annual Leave pay item. It might also be called Unused Holiday Pay (or similar).
Click to open the pay item. If the pay item doesn't exist, or you need to create an additional unused leave pay item, click Create wage pay item. Here's the default setup of the Unused Annual Leave pay item:
Under Employees using this pay item, choose the employee who's leave is being paid out.
Click Save.
Click the Leave tab.
Click to open the Annual Leave Accrual pay item (this might be called Holiday Pay Accrual).
Under Link wage pay item (near the bottom), click the dropdown arrow and choose the Unused Annual Leave pay item. This ensures that when you pay the unused leave the entitlement balance will be reduced.
Click Save.
You can now pay the unused leave as described in the next task.
3. Pay the unused leave
Process a separate pay for the unused leave.
Enter the number of leave hours to be paid out against the unused leave wage pay item.
Ensure all other hours and amounts (except PAYG Withholding and super) are zero, including leave accruals (you don't want leave to accrue on this payment). Here's our example where Alan is being paid out for 106.92 hours of unused annual leave.
Finish processing the pay as normal.
You can now update the employee's record to reflect their new working arrangements. Keep reading to find out how.
Update the employee's record
After the employee's last pay under their old working arrangements, update their record to reflect their new arrangements.
This usually involves changing their Employment status (full time, part time or casual), and may also require a change to their Pay basis (hourly or salary).
It's also a good idea to check all other payroll details, particularly leave, to ensure everything is set up correctly. If you need to adjust how an employee's leave is calculated, see Adjusting leave entitlements.
Change the Employment basis
Go to the Payroll menu and choose Employees.
Click to open the employee's record.
Click the Payroll details tab.
On the Employment details tab, change the Employment basis.
Choose the applicable Employment category (Permanent or Temporary).
Ensure all other payroll details are correct, such as their leave.
(Optional) Click the Contact details tab and make a note of this change in the Notes field at the bottom.
Click Save when you're done.
If the employee's Pay basis is also changing (Hourly to Salary or vice-versa), continue with the next task.
Change the Pay basis
Go to the Payroll menu and choose Employees.
Click to open the employee's record.
Click the zoom arrow to open the employee's card.
Click the Payroll details tab.
Click the Wages and salary tab
Change the Pay basis as required.
Ensure all other payroll details are correct, such as their leave.
(Optional) Click the Contact details tab and make a note of this change in the Notes field at the bottom.
Click Save when you're done.
If the employee's Employment status is also changing (full time, part time or casual), make sure you've also completed the previous task.
Once you've updated the employee's setup, you can pay them under their new working arrangements. This will send the employee's latest year-to-date payroll information to the ATO. Or you can send an update event to the ATO at any time to send your employees' latest payroll data (Payroll > Single touch payroll reporting > Send update event).