XBert Type: Standard
Accounting Software: Xero
Country Restriction: Australia only
Risk Type: Payroll Risk
Business Function: Payroll
Overview
The "Check Earnings Rate Category" XBert helps make sure bonus and commission pay items are filed under the right earnings category in your payroll. Getting this right matters for Single Touch Payroll (STP) Phase 2 reporting to the ATO, because the category you choose tells the ATO what type of payment an employee received.
What it does
This XBert looks at the earnings pay items (also called earnings rates) set up in your payroll. It checks the name of each pay item against the earnings category it has been given. When a pay item looks like a bonus or commission by its name, XBert checks that it has actually been categorised as "Bonuses and commissions".
If the name suggests a bonus or commission but the category is something else, XBert raises this alert so you can correct it.
How it works
XBert reviews every current earnings pay item in your payroll and flags one when both of these are true:
The pay item name contains "bon" (as in bonus) or the word "commission".
The pay item is filed under an earnings category other than "Bonuses and commissions".
A couple of things are deliberately left out so the alert stays useful:
Pay items already correctly set to "Bonuses and commissions" are never flagged.
Old or retired pay items whose name is marked "do not use" are skipped.
The alert shows you the pay item name, the category it is currently filed under, and the category it should be in. It also tells you whether the pay item is currently treated as exempt from super or included in super, so you can review that at the same time.
Example/Use Case
Ben runs payroll for a small cafe and pays his staff a quarterly bonus of $500 each. He creates a new pay item in Xero called "Quarterly Bonus" but leaves the earnings category set to "Ordinary time earnings" instead of "Bonuses and commissions".
XBert spots that the pay item is named like a bonus but is not filed under the bonus category, and raises the "Check Earnings Rate Category" alert. On review, Ben recognises that the ATO expects bonuses to be reported under their own category for STP Phase 2. He updates the category to "Bonuses and commissions" so his next pay run is reported correctly.
Accounting software
This XBert runs on Xero only.
Which countries it supports
Australia only.
Processes
This XBert is part of the Payroll process.
To resolve it:
Open your payroll pay items in Xero and find the earnings pay item named in the alert.
If it really is a bonus or commission, change its earnings category to "Bonuses and commissions" so it matches the type of payment.
While you are there, check the super treatment for the pay item is correct for that payment under ATO and Fair Work guidance.
If the pay item is named like a bonus but is genuinely a different type of payment, rename it so the name reflects what it really is. This also stops the alert raising again.
Once the pay item is correctly categorised, mark the XBert as resolved.