Examples of Custom Pay Types
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      Creating a Non-taxable Mileage Allowance Custom Pay Type

      This example shows one possible set up of a custom pay type for a non-taxable mileage reimbursing allowance.

      Updated: October 2024

      You provide a reimbursement allowance of $1.04 per kilometre travelled using their own vehicle for work purposes . Let's break down this example.

      This allowance is:

       ❌  A regular payment I can use system pre-loaded pay types for.
       ✅ I prefer using a custom pay type for clarity on the payslip or/and reporting and tracking purposes.
       ✅  *This is a non-taxable allowance, meaning added after the income tax calculation. 

      Info - Blue Block (1)For this reimbursement allowance to be non-taxable, it has to be reimbursed at the IRD rate.

      *Anything over this rate would be taxable.

      The custom pay type & timesheet should have the following:

       ✅  Custom pay type created in the *non-taxable section
       ✅ Rate: 1.04 (current IRD rate a.t.o publication)| Per: unit
       ✅ Distance entered on timesheet as applicable

      Here is an example setup:

      S7CPT_MileageAllowance

      • Create this custom pay type with a recognisable name in the Employee Profile - Pay Types tab and SAVE.
      • Select your recognisable pay type from the dropdown timesheet list.
      • Enter the distance travelled for reimbursement on the applicable day.
      • The timesheet summary displays all non-taxable allowances together as one combined figure.

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