Backpay

The HR3pay backpay function is used to calculate a backpay amount for an employee or group of employees. In essence, an HR3pay user can enter the rate of backpay (expressed either as an hourly rate or a percentage) and can select the types of payments which are to be included such as ordinary hours or meal allowances.

The system then uses selected employee's earnings' histories to calculate the total amount of the backpay. The calculated amounts can be saved for approval or imported into a payrun as required.

Two separate types of backpays can be processed as per ATO requirements:

  • Standard Backpays which are payments relating to the past 12 months.
  • Lump Sum E which are payments relating to the period prior to the past 12 months.

All backpays will be taxed according to the relevant ATO regulations.

Processing a Backpay:

  1. From Navigator select Payroll | Payrun | Backpay
    The Backpay wizard will open at Select a Backpay. Here you will find a list of all existing Backpays with their corresponding details in columns. This includes:
Column name Explanation
Run No The system automatically assigns a number to the backpay to uniquely identify it throughout the system.
Fin Year This is the financial year which was selected for the backpay.
Week No This is the week number which was selected for the backpay.
Month This is the financial year month which was selected for the backpay.
Status A backpay will be one of these status types:
  • Pending i.e. not yet finalised
  • Approved i.e. ready for import into the payrun
  • Processed i.e. already processed through the payrun.
No Emps This displays the number of employees that have been added to the backpay.
  1. Select one of the options at the bottom of the screen. You can:
    • Open a new backpay
      Select this option and click Next to start a new backpay.
    • Enter or amend entries in an existing backpay
      Select a backpay with a status of Pending. Select Enter or Amend Entries In An Existing Backpay and click Next to edit that backpay.
    • Close a processed backpay
      This option allows you to remove Processed or completed backpays from the wizard. Select the backpay, then select Close a Processed Backpay and click Next. You will be asked to confirm your action.
    • Abort a pending or approved backpay
      Select a backpay with the status of Pending or Approved then select Abort a Pending or Approved Backpay and click Next.

  2. Click OK on the confirmation message.
    A new screen will open showing Open Backpay. Here you will be able to enter all the details for the new or edited backpay.

  3. Complete the following information as required:
Field Explanation
Backpay Number The system automatically assigns a number to the backpay to uniquely identify it throughout the system. You cannot edit this value.
Pay Period Cycle If Pay Period Cycles are enabled (in Payrun Preferences) this option will be available and ticked by default.
Pay Period Cycle Set If this backpay needs to be a Pay Period Cycle backpay, then you must select the required Pay Period Cycle Set. If a set is not specified here, this will be an Off Cycle backpay.
Pay Backpay in FinYear: Week No Use the calendar to select the financial year week number and month in which you want the backpay to be processed.
Backpay Status Select the status of the backpay
  • Pending or not yet finalised
  • Approved or ready for import into the payrun
  • Processed or already processed through the payrun.
Processed On The system will automatically fill in the date on which the pay was processed (not the payrun date).
Pay Backpay as Pay Item There are two different pay item options available. Choose the pay item that corresponds to when the backpay is for:
  • ZBK, Automatic Backpay, PY
     Select this option if the backpay is for a date within the past 12 months. If this pay item is selected, only those payruns with a period end date within the last 12 months of today's date will be available to the backpay. Payments made using this item are included in gross payments on the payment summary.
    You will need to specify the number of weeks included in the backpay. For the correct calculation of tax, enter the relevant number of weeks (not pay periods) covered by this backpay. Enter whole weeks only.
  • TPE, Lump Sum E, TM
     Select this option if the backpay is for a date prior to the last 12 months. If this pay item is selected, only those payruns with a period end date more than 12 months ago (from the date you are creating the backpay) will be available to the backpay. Payments made using this item are shown separately in the Lump Sum E box of the payment summary.
How Many weeks in this backpay? Enter the number of payrun weeks to which the Backpay relates. Note: round down to the nearest whole number when necessary
Deduct tax as Pay Item You must select ZBT, Automatic Backpay Tax, TX
Base hourly Backpay Rate Enter the amount of the backpay expressed as either an hourly rate or a percentage.

If the backpay involves multiple rates (e.g. an hourly rate increase of $0.75 and a tool allowance raise of $0.33), enter the primary hourly pay rise amount here. At step 3, you can override the amount for the tool allowance.
A backpay cannot process $ and % based backpays together. If your backpay involves both you must either process them in separate backpays, or express the allowance raise as a percentage of the current allowance rate.
Backpay Description Enter a description for the backpay. This will be printed on the backpay report.
Print Memo on Payslip Select this option if you wish to print a memo on each recipient's payslip.
Payslip Memo Enter the text of the memo to appear on the payslip of the employee receiving the backpay.
Approval details Enter the name of the person who has approved the backpay and the date of the approval.
  1. Once you have entered all the necessary information, click Next.
    Payruns and Pay Items will open.
  2. Select the payrun(s) you wish to include in the backpay calculation. To select multiple payruns, hold the Ctrl or Shift key while clicking.
  3. Click Select. The payruns will then be marked True in the Selected column, meaning they will be included in the backpay calculation.
  4. Select the Pay Items to be included in the backpay calculation.
    1. The lower half of the window lists all pay items which have been processed in the selected payrun(s).
    2. One by one, click on the required items and click Select to include them in the calculation (alternatively you can use the Alt+S shortcut to select them).
    3. You may override the Backpay Amount for individual items in this screen if required.
      For example, you might wish to backpay allowances at a rate which is not the same as the hourly backpay rate. Double click on the Backpay Amount to highlight it, and type the new rate over the top. If you need to make more rate changes, use the keyboard arrows or your mouse to move to the other pay items. If you press the Enter key, this will automatically move you to the next screen.
  5. Once you have entered all the necessary information, click Next.
    The Employees to Pay screen for the selected dates will open.
  6. Select Employee Pool to choose the employees to be included in the backpay calculation.
  7. To add employees to the backpay calculation you can:
    • Select the employee and then click Add To Backpay.
      OR
    • To select more than one employee, hold the Ctrl or Shift key while clicking.
      OR
    • To add all of the employees on the screen, click Add All To Backpay.
  8. In Employees to Pay you may review the payroll information for each employee. Double click an employee name in the list, to check and edit the following:
Field Explanation
Calculated backpay amounts:
Backpay Amount The system calculates the amount of backpay based on the following formula:
Total selected hours x Factor x Backpay Rate = Backpay Amount
"Standard" weekly earnings The system draws this value from the employee's standard pay settings. It is used to calculate the tax payable on the backpay. If the employee does not have standard weekly earnings, such as casual staff, use the average weekly earnings from the last 10 weeks.
Backpay Tax If you chose the pay item ZBT automatic backpay at step 2, the system calculates tax at the employee's marginal tax rate. If you chose the pay item TPE Lump Sum E, tax is calculated according to the current Lump Sum E tax rules as defined by the ATO.
Override Backpay:
Override Backpay Calculation? Check this box only if you wish to override the calculated backpay amounts in the upper section of the window. (This will activate the fields Override Backpay/Tax Amount.)
For example, an employee is paid weekly, Monday to Friday, but the payrise takes effect from a Wednesday. As HR3pay cannot calculate a backpay on part of a payrun, the operator might wish to exclude the partial week from the automatic backpay calculation, and add it on at the end using the override function.
Override Backpay Amount Enter the final amount of the backpay.
Override tax amount Enter the final amount of the backpay tax.
Overridden by Enter the name of the person overriding the backpay calculation.
Reason for override Enter the reason for the automatic calculation being overridden.
  1. Click Apply then return to Employees to Pay and make further changes as necessary.
  2. Close the Employees to Pay screen. The Completed screen will open to indicate to you that the backpay has been completed.