The document provides configuration steps for setting up payroll in MYOB accounting software. It outlines how to set up a new company file, fiscal year settings, payroll categories including wages, superannuation, entitlements, deductions, expenses and taxes. It also describes how to create an employee master record for an example employee, process two payroll runs making payments, and a third payroll run where the employee takes sick leave. The goal is to demonstrate the full payroll configuration and processing in MYOB.

1. Configuration steps of Payroll in MYOB
Scenario:
Co. Name: ABC accounting firm
Employee: Sandesh Kakde
Title: Assistant accountant
Joining date: 7th
June,2017.
Pay frequency: Fortnightly
Status: Full time employee

2. 1) Setup new company code in MYOB
a) Since it is a demo version skip part of Serial Number (Mandatory in full version)
b) Company name
c) ABN No.
d) Address
e) Phone number
f) Fax Number
g) Business email ID
Then click on Next

3. In Australia Fiscal year starts from 1st
July to 30th
June.
For testing purpose, I have mention fiscal year 2017 i.e. 1st
July 2016 to 30th June 2017.
a) Current Fiscal year: 2017
b) Last month of financial year: June
c) Conversion month: July
d) Number of accounting periods: Twelve (Thirteen is for adjustment if require)
Then click on Next

4. Confirm the above details
Click on next

5. MYOB has already provided the require list of accounts to meet the business requirement.
a) Click on first option (Standard)
b) Second option to import the data from previous software
c) Third option if business require their own account list
In current scenario we will go with first option and click on Next

6. In above screen select appropriate option suitable to your business.
a) Industry Classification: There are various options like Agriculture, Manufacturing, Retail, Service,
Other.
b) Type of Business: There are many options provided by MYOB. If require we can create a new
one.
In current scenario, we will select “Accounting Firm” as type of business and it’s a service
industry.
According to our selection MYOB will provide us accounts list. (Automatically)

7. In above screen select the path to create the database file.
Click on next
Till here we are done with basic setting of Company code.

8. On the above screen click on Setup Assistant
Since we are just configuring payroll here click on Payroll

9. Click on Next

10. On the above screen you will find two options Check for updates & Load tax tables.
Check for updates: Tax tables are provided by ATO (Australian Tax Authority) and to update them
click on check for updates
Load tax tables: Manually enter the values
In the above screen any date will appear.
Then Click on Next

11. In the above screen maintain the payroll year
In current scenario payroll year is “2017”
Confirm the above details and click on next

12. In above screen we maintain the Full work week hours. In Australia it is 37.5hrs. (Monday to Friday
7.5hrs excluding lunch time or breaks) It can be varying from business to business. Like Monday to
Friday 9hrs excluding break of 1hr or any.
a) Full work week Hours: 37.5hrs
b) Withholding payer Number: *** *** *** **
Since employer is going to deduct the taxes from employee salary and payback to government on
behalf of employee. So, such employer must be provided with withholding payer number.
c) Default Superannuation Fund: Spectrum Super (Followed in Australia). We can create our own.
d) Round net pay down to a Multiple of: “0”

13. In above screen we assign or map the GL account as per the requirement. MYOB has already
provided the accounts. Still we can change as per the requirement.
Click on Next

14. Payroll Categories:
In the below screen we will be configuring various category type: Wages, Superannuation, Entitlements,
Deduction, Expenses, Taxes
a) Wages: Here we decide pay type like Base salary (Yearly or Hourly), Bonus, Commission, Long
service leave (Applicable for old employee) etc. In current scenario, employee get paid on yearly
basis.

15. b) Superannuation: Here we decide the superannuation type like employee additional, employer
additional, salary sacrifice, spouse, Superannuation Guarantee etc. Limits are provided on ATO
website.
 Name: Superannuation Guarantee
 Linked Expenses account: 6-5120 (GL account)
 Calculation: 9.5% of gross wages (As per the 2014 ATO tax table)
 Threshold: Super is applicable who is earning >$450 per month
Here we can add other configuration like Salary sacrifice where employee may wish to consider more
part of his salary as super, keep some part as spouse (if spouse earning < $37000 PA) etc.

16. c) Entitlements: Here we assign Holiday leave accrual rate, Sick leave accrual rate etc.
 Calculation basis: 2.885 hrs per pay period
Sick leave: 2 weeks (Depends on Co. Policy)
2wks x 5 days/wk = 10 days/year
10 x 7.5hrs = 75 hours/yr
75/26 = 2.885 hours/fortnight
Holiday/Annual leave: 4 weeks (Depends on Co. Policy)
4 weeks x 5 days/wk = 20 days
20 x 7.5 = 150 hours/year
How often do you get pay? Fortnightly
How many fortnights are there per year? 26 (52/2)
150/26 = 5.769 hours/fortnight
 Pay advice: As per the business requirement, we can print this on pay slip or we can skip
 Payroll year end: Carry remaining sick leaves to next year, as per the business
requirement.

17. d) Deductions: Here we decide the applicable deduction from employee’s salary. Like Advance paid
to employee, union fee, one-time deduction etc. (Applicable for Blue Collar job)
e) Expenses: Here we decide the expenses like work cover, medical insurance etc. Depends on
company policy and risk at job involved.
f) Taxes: Here we decide tax GL account and tax tables are updated as per the ATO.

18. Employee Cards:
Here we assign the employee who are all fall under same category or same level.

19. Timesheets:
This is applicable for consultant or practitioner.

21. Test:
1) Create one employee as per given scenario.
Click on Card File

22. Put all necessary details in Profile tab.
Then go to Payroll details tab

23. Put all necessary details in Payroll Details tab. Fill all options like personal details, wages,
Superannuation, entitlements, deductions, employer expenses, taxes, time billing if applicable.
In above screen we maintain employee’s salary, pay frequency, wages GL account.
In above screen we select the Superannuation type which is applicable to that employee. In current
scenario we have configured Superannuation Guarantee

24. In the above screen, we decide the entitlements of employee as per company policy. In current scenario
employee is entitled to both Holiday leave and Sick leave. We can create a personal leave to meet the
business requirement.
In the above screen we select the deduction from employees salary (If applicable)

25. Here we select the work cover amount or percentage. In current scenario it’s not applicable since it’s a
White-collar job. It is applicable in Blue collar job or as per the company policy.
In the above screen, we maintain the tax file number of employees. There are various tax tables are
available. Tax free threshold, No tax free threshold, Senior single etc. according to which the tax rates
are applied on employees earning or income. In current scenario we have selected the “Tax free
threshold” & PAYG Withholding payable tax table.

26. At the time of tax deduction values will be picked up from above table.

27. This is applicable for the employees who get paid on hourly basis.

28. Now go to Payment details tab
Here we select appropriate payment method. In current scenario it’s “Cheque”.
History Tab
Since we are making payment for the first time to this employee, we won’t find any value in history tab.
Here we are done with creation of Employee master data.

29. Go to Home screen -> click on Process Payroll option
In the below screen we can select payment run for one employee or more.
According to our current scenario, employee started working on 7th
June 2017. Hence, we have
maintained this date as pay period start date. Pay frequency is Fortnightly, pay period end at 18th
June
2017. Company decided to pay on coming Wednesday after pay cycle i.e. 21-07-2017.

30. Click on edit pay button.

31. This employee is worked for only 8days out of 10dyas in first payment cycle we have to edit his salary
from $2000 to $1600.
We can do cross multiplication:
So $2000 = 10day
? = 8 days
Answer is = $1600
We will do this calculation for holiday and sick leave as well.

32. The below table is provided by Australian tax authority (ATO)
According to which tax applicable for $1600 income is $226.
Once we are confirm the details, click on Record Button

33. We can see above the Pay slip. We can send this to employee via email as well.

34. Second pay run
We will do one more payment run. This time employee work for whole payment cycle.
Pay period start at 19-06-2017 and end at 30-06-2017.
Since this is the end of fiscal year, business has decided to pay salary on 30th
of June, 2017. They could
have postponed or prepone the date. Depends on management decision.

35. This time employee got full salary since he has worked for 10 days in this payment run. Tax value is
updated according to ATO tax table i.e. $366.

36. Now we will see the print payment summary option in MYOB.
Go to Payroll Tab ->
Select first option.
If we wish to make any changes in company details, we can update here. Since same details are
provided to ATO, we have to make sure that all the details are correct.
Click Next

37. In current scenario employee was getting base salary. We can add additional payroll categories if
applicable.
In above screen we can link employer superannuation categories if required.

38. In above screen we can link employer superannuation categories if applicable.
Click on next
Click on Print Payment Summaries

39. Output:
We can see the payment summary details like the amounts held by employer as tax withheld amount
and gross amount paid to employee.
We will post one more payment to employee to check effect of leaves.

40. PAY3:
In this payment run employee took 1 sick leave and 2 holiday leave.
We can take 14-07-2017 or 16-07-2017. Since it is Saturday & Sunday, it does not matter. Payment day
will be 19th
July 2017.

41. So value of Holiday leave accrual = 5.769hrs – 15hrs = (9.231)
&
value of Holiday leave accrual = 2.885hrs – 7.5hrs = (4.615)
Update the same and take a printout of Payslip.

42. Further we can see the details in Employee card (Master). Leave details are updated.
END OF PAYROLL IN MYOB