Tax Free Allowances

As examples of tax free allowances, pre-defined pay items are provided for 'Clothing', 'Meal' and 'Tool' allowances.

These have different calculation types: Clothing and Meal are both paid at a set rate. That is, any units entered with the payment in the pay calculation screen are multiplied by the rate to give the amount to pay. The rate is entered in the factor field of the pay item set up screen, $1.50 for the clothing allowance and $10 for the meal allowance.

The Tool allowance has a calculation type of 'Total Hours'. The amount to pay is calculated as the total hours worked multiplied by the rate. The total hours worked is the sum of ordinary and overtime hours: in Kwik-Pay that is the total of units entered in the pay calculation screen for all pay items that have been set up with an 'Hours type' of 'Ordinary' or 'Overtime'. The rate is the amount in the factor field in the pay item set up screen. Using the example tool allowance, if an employee works 40 ordinary hours and 5 overtime hours , the amount to pay will be $18 (45 multiplied by 40c).

Both the cloting and tool allowances have been set up as repeating , so that they are carried forward automatically to the next pay period, but the meal allowance has not. Therefore, you woudl have to add the meal allowance to the pay calculation screen for each employee in each pay period the allowance is to be paid.