Some employers allow employees to take time off instead of being paid overtime pay. This is known as time off in lieu (TOIL). To track and pay TOIL hours in MYOB, use the following information as a guide.
Setting up TOIL
You'll need to create three pay items:
a wage pay item to show TOIL hours earned
another wage pay item to show TOIL hours paid
an entitlement pay item to keep track of TOIL hours owed (TOIL balance)
OK, let's step you through it.
1. Create a wage pay item for TOIL earned
Go to the Payroll menu and choose Pay items.
On the Wages and salary tab, click Create wage pay item.
For the Name, enter "Time in Lieu - Earned".
Choose the applicable ATO reporting category. Typically this will be the same ATO reporting category you've selected for your Base Hourly or Base Salary wage pay items. If you're not sure, check with your accounting advisor or the ATO.
For the Pay basis, select Hourly.
For the Pay rate, choose Fixed hourly rate of, and in the next field enter 0.00.
Under Allocated employees, choose all employees who are eligible for TOIL.
When you're done, click Save.
2. Create a wage pay item for TOIL taken
Go to the Payroll menu and choose Pay items.
On the Wages and salary tab, click Create wage pay item.
For the Name, enter "Time in Lieu - Taken".
Choose the applicable ATO reporting category. Typically this will be the same ATO reporting category you've selected for your Base Hourly or Base Salary wage pay items. If you're not sure, check with your accounting advisor or the ATO.
For the Pay basis, select Hourly.
For the Pay rate, choose Regular rate multiplied by, and in the next field enter 1.0000.
Select the option Automatically adjust base hourly or base salary details. This will ensure that any hours allocated to this wage pay item will automatically be deducted from the employee's base wages.
Under Allocated employees, choose all employees who are eligible for TOIL.
When you're done, click Save.
3. Create an entitlement pay item to track TOIL balances
Go to the Payroll menu and choose Pay items.
Click the Leave tab.
Click Create leave pay item.
For the Name, enter "Time in Lieu Accrual".
For the Calculation Basis, choose Equals a percentage of wages.
For the Percentage, enter 100.
For the Percent of, choose Time in Lieu - Earned.
(Optional) If you don't want the balance of this leave to show on employee pay slips, deselect the option Show leave balance on pay slips.
(Optional) If you want accrued time in lieu to carry over each payroll year, select the option Carry remaining leave over to next year.
Under Link wage pay item, choose Time in Lieu - Taken.
Under Allocated employees, choose all employees who are eligible for TOIL.
When you're done, click Save.
4. Process a pay with TOIL
When an employee works overtime that will be paid as time off in lieu, enter the number of hours in the Hours column of the Time in Lieu - Earned wage pay item. The Time in Lieu Accrual entitlement will show the same number of hours as being added.
When the employee takes the time off, you enter the hours taken in the Hours column of the Time in Lieu - Taken wage pay item. The Base Hourly amount automatically reduces by the amount of time in lieu.
FAQs
How can I see time in lieu activity (taken and earned) for an employee?
Use the Pay item transactions report (Reporting menu > Reports > Pay item transactions) and filter the report as required:
enter the date range
choose the TOIL pay items
choose the employee
How do I stop TOIL from accruing leave entitlements?
If your industry award or employment agreement excludes leave from accruing on TOIL payments, you can cater for this. If you're not sure if this applies to you, check with the FairWork Ombudsman.
To stop leave from accruing on TOIL:
Go to the Payroll menu and choose Pay items.
Click the Leave tab.
Click to open the leave pay item which you want to stop accruing on TOIL.
Under Exemptions, select the Time in Lieu - Earned and Time in Lieu - Taken pay items.
Click Save.
Repeat for each leave pay item you don't want to accrue on TOIL.
How do I stop time in lieu from accruing superannuation?
If your industry award or employment agreement excludes superannuation from accruing on time in lieu wage categories, you can cater for this in AccountRight. For clarification on the payments that superannuation guarantee contributions are calculated on, see the ATO guidelines.
To stop super from accruing on TOIL:
Go to the Payroll menu and choose Pay items.
Click the Superannuation tab.
Click to open the super pay item which you want to stop accruing on TOIL.
Under Exemptions, select the Time in Lieu - Earned and Time in Lieu - Taken pay items.
Click Save.
Repeat for each superannuation pay item you don't want to accrue on time in lieu.