Backup Recommendation:
We advise that an interim backup is taken before doing any of the following process. This precaution will enable the system to be put back into the position it was in before undertaking the procedure. This would be done by restoring the backup.
There are times when an organization wishes to change the payment frequency in its payrolls from say Weekly to Fortnightly or Monthly. This is a major change to the payroll and a good backup should be taken before proceding. We suggest that a backup is done to the hard drive as well as to external media.
The ideal time to change the payment frequency in your organization would be in January, at the beginning of the tax year, but can be done during the year if necessary.
Changing the frequency at the beginning of the year
Immediately before doing a year end procedure take the following steps:
Step 1
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Go to the 'Setup', 'Periods' and then the 'Pay Periods' menu options
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Step 2
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Press the 'Create Periods' button
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Step 3
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Enter the start date as the first day of the year 01/01/YYYY
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Step 4
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Enter the number of periods required
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Step 5
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Do the year end procedure.
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Step 6
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Go to each employee in the employee master and change the rate of pay for each individual. This can be done manually or may also be done by exporting the data to spreadsheet and re-importing the data back into the payroll.
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Monthly to Weekly - During the course of the year
Make sure that the last monthly period is open (ie. a period end has not been done into the first weekly period) then take the following steps:
Step 1
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Go to the 'Setup', 'Periods' and 'Pay Periods' menu options
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Step 2
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Add the number of periods required in order to pay employees weekly until the end of the year. The total number of periods will be the number of periods used (on a monthly basis) plus the number remaining weeks in the year.
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Step 3
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Go to each weekly period (not yet used) in the period table and update each field so that it reflects weekly information.
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Step 4
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Go to each employee in the employee master and change the rate of pay for each individual. This can be done manually or may also be done by exporting the data to spreadsheet and re-importing the data back into the payroll.
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Step 5
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Go to 'Data' and 'Payroll Maintenance' menu options and change the number of 'Periods' to reflect the new number of periods for the year. This will be the total number of periods regardless of whether some of them are monthly periods and others weekly. This is an important step to ensure that the FDS tax computations calculate correctly.
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Step 6
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NOTE : It is necessary to change the annual leave entitlements in the employee master record using a formula that takes into account leave accrued on the monthly payroll and leave that will accrue under the weekly regime.
This formula is simply to multiply the revised monthly leave accrual that should apply multiplied by the revised total number of periods in the year.
Example
A payroll is converted to weekly after 6 monthly periods, leaving 26 weekly periods to be paid. The total number of periods is therefore 32.
Assuming the annual leave entitlement is 22 the weekly accrual would normally be 22/52 = 0.4231
The revised leave entitlement should be entered as 0.4231x 32 = 13.539
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Monthly to Fortnightly - During the course of the year
Use the logic applied to the conversion of the payroll from Monthly to Weekly, detailed above, considering the fortnightly aspect rather than weekly.
Weekly to Monthly - During the course of the year
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Make sure that the last week processed does not straddle into the new monthly period. A period end should then be done from that last weekly period into the first monthly period that has been setup.
To do the conversion take the following steps:
Step 1
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Go to the 'Setup' and 'Periods' and 'Pay Periods' menu options
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Step 2
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Reduce the number of periods required in order to pay employees monthly until the end of the year (Delete periods). The total number of periods will be the number of periods used (on a weekly basis) plus the number remaining monthly periods in the year.
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Step 3
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Go to each monthly period (not yet used) in the period table and update each field so that it reflects monthly information.
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Step 4
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Go to each employee in the employee master and change the rate of pay for each individual. This can be done manually or may also be done by exporting the data to spreadsheet and re-importing the data back into the payroll
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Step 5
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Go to 'Data' and 'Payroll Maintenance' menu options and change the number of 'Periods' to reflect the new number of periods for the year. This will be the total number of periods regardless of whether some of them are monthly periods and others weekly. This is an important step to ensure that the FDS tax computations calculate correctly.
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Step 6
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NOTE : It is necessary to change the annual leave entitlements in the employee master record using a formula that takes into account leave accrued on the weekly payroll and leave that will accrue under monthly regimes.
This formula is simply to multiply the revised monthly leave accrual that should apply multiplied by the revised total number of periods in the year.
Example
A payroll is converted to monthly after 26 weekly periods, leaving 6 monthly periods to be paid. The total number of periods is therefore 32.
Assuming the annual leave entitlement is 22 the monthly accrual would normally be 22/12 = 1.833.
The revised leave entitlement should be entered as 1.833 x 32 = 58.667
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LEAVE ACCRUAL
Leave accrual = Leave Entitlement/ No. of Periods
If the number of periods has changed the leave accrual will also change. To ensure that the correct leave accrual comes through for the remaining periods adjust the leave entitlement to produce the correct result.
Example
Payroll changed from weekly to monthly at the end of June after 26 periods have been paid. There will be 6 monthly periods giving a total of 32 periods for the year. The Leave Entitlement is 22 days per annum. The Leave Accrual in the last 6 periods should be 22/12 = 1.833 days per month
To produce this result, enter the Leave entitlement as = 58.667 (1.8333 x 32). The Leave Accrual in the last 6 periods will then come through correctly as 58.667/32 = 1.833 days per month.
Leave Adjustment
If the leave entitlement is not changed immediately, the leave days accrued would be incorrect. In that case, a leave adjustment should be processed for each employee.
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