Overview

There may be times when you wish to make an additional payment and have been given the net amount the employee needs to receive.
For example, the employee needs to receive $500 nett. The amount that is loaded into the payroll will need to be grossed up to allow for the PAYE, Student loan and KiwiSaver as these will be taken off this payment.

Different components will result in different calculations, for example is the component considered an Extra Pay or Not Extra Pay for tax calculation purposes.
The Extra Pay (lump sum tax) is usually used for these payments. As these payments are most likely not regular in nature, ordinary tax rules will not apply. Datacom will apply this as default for calculations.

The Process:

The Client will advise their EasiPay Consultant they wish to make a payment to an employee, they will be supplying the Nett value that needs to be paid. This will require the consultant to calculate the gross payment allowing for the calculation of PAYE, KiwiSaver and Student Loan.
The grossing up of these payments can be time consuming as the tax calculations are dependent on all payments that have been made to the employee in the previous 28 days. If the payment is to be paid in the main pay run it needs to include the current main pay packet. This means the grossed-up amount cannot be calculated until the main pay packet has been calculated.

If multiple employees need to receive these payments, enough time needs to be allowed for these calculations to be completed.
Datacom recommends an out of cycle run is processed after the main run to pay out these amounts, when there are significant numbers.
Due to the nature of the calculations, the main run must be finalised before the gross up calculations can be started. Datacom recommends the main run and the manual run are not processed on the same day to ensure there is sufficient time allowed for the calculations to be completed.