Pay periods are weekly, fortnightly or monthly payment to employees. Every employee is assigned a pay period which they are paid on. Every time a batch is created for that pay period they get paid the hours they are due.
Batches are run every pay period and are a collection of employee transactions. These transactions create all the journal entries that will occur for the employee. When the processing occurs it will add these journal entries. Once everyone’s hours have been entered in you can process the batch. It can be reopened and changes made.
In a batch every employee will have a list of transactions that will be run for them. These transactions act as functions and calculate such things as gross pay, tax, leave etc. They require inputs like quantity and pay period, along with the results of other employee transactions to calculate their results.
Standing pay from employee records will be copied as a series of employee transactions if their pay period matches the batches pay period.
You can remove and add employee transactions into their pay. Each one will have a bearing on the final pay the employee will receive.
Transactions are functions that are linked to the employee transactions. A transaction will have a series of input ledgers and output ledgers. It will also return an amount that will be displayed in the employee transaction list. When the pay is processed, the transaction will generate a series of journal entries based upon these inputs. These journal entries will set the balances of the various ledgers.
Default pay (also known as standing pay) is a list of transactions that get added automatically whenever a batch is created. These transactions will be copied into the employee transactions. By changing your tax code, pay rate or leave entitlement your standing pay will get modified automatically. What’s useful about standing pay is you can go in and set up a set of standard transactions that occur every pay period for an employee like allowances or deductions.
Every employee and the company have a series of ledgers. These ledgers are where journal entries end up. If you are familiar with accounting you know the debit and credit principles. Every transaction which occurs will create a series of debit and credits to a number of different ledgers of both the employees and the companies.
Company wages expense ledger will be debited, employees gross wages will be credited.