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'AU Payroll - Setting up a Director in payroll' has been merged into this idea

Payroll & expenses: Payroll

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AU Payroll - Allow directors fees to be picked as an ordinary earnings rate

ATO Category pay items of Directors Fees should be able to be the Ordinary Earnings Rate for employees. Currently only the ATO category Ordinary Time Earnings can be the Ordinary Earnings rate for employees.
Whilst adding a zero Ordinary Earnings Rate solves the problem, it leaves the processing of pays open to input errors unnecessarily

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Michelle Fendt shared this idea  ·   ·  Report…  ·  Admin →
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Not in pipeline  ·  AdminSophie Lewis (Admin, Xero) responded  · 

Hi there, we appreciate you raised this a little while ago. This isn't something we have plans for in the near term.

Not getting a lot of support from other members we’ll soon remove this from Product ideas. If it’s still highly valuable to you, welcome to start it again and see if it gets renewed interest.


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  • Skye Borona commented  ·   ·  Report

    AU Payroll - Setting up a Director in payroll

    When setting up an Employee in payroll that is only being paid Directors fees, you're not able to add their info directly in the Employee tab. Instead, you need to add the directors' fees pay item to their pay template, while also setting up a 0 rate in the ordinary earnings rate.
    It would be great if you could pull the Directors fees through to the Employee tab, rather than having to create a 0 rate to allow setup.

  • Suryan Chandrasegaran commented  ·   ·  Report

    In Xero Payroll, Xero will not let the director's rate for Ordinary Earnings change from an inactive rate to the current active rate.

    This means the leave each pay period will need to be manually calculated as Xero cannot do this now that the director's Ordinary Earnings rate is set to 0 (and there is currently no way to get Xero to change this rate so that Xero can automatically calculate the ongoing leave entitlements).

    I have raised this issue with Xero Support and they say there is currently no way to make this change.

    Could Xero Payroll be amended to allow the Ordinary earnings rate to be changed for directors?

  • Sam Gray commented  ·   ·  Report

    Great minds: https://productideas.xero.com/forums/939198-for-small-businesses/suggestions/45982846-au-payroll-allow-other-pay-items-to-be-selected-a

    Also note re your workaround: Public Holidays and Leave will all be reported under the incorrect Earnings Category to the ATO for Directors unless Xero allows a pay item with Directors Fees as the earnings category to be Ordinary Earnings Rate.

  • Sam Gray commented  ·   ·  Report

    Note: Public Holidays and Leave will all be reported under the incorrect Earnings Category to the ATO for Directors unless Xero allows a pay item with Directors Fees as the earnings category to be Ordinary Earnings Rate.

  • Sam Gray commented  ·   ·  Report

    Currently Xero forces you to select an Pay Item with the Earnings Category of Ordinary Time Earnings on the Ordinary Earnings Rate.

    This was fine until STP Phase 2 came along.

    In STP Phase 2, working Directors must have their remuneration reported as Director Fees as per the ATO.

    Directors Ordinary Earnings Rate therefore needs to be a Pay Item with Earnings Category of Directors Fees. But Xero won't let you do that because the "Product Team" confuse OTE and Ordinary Earnings Rate which are two different concepts - very different with the new STP reporting requirements.

    Let us set Directors Fees as Ordinary Earnings Rate (which it is!!) for Directors.