Step Six - Adding Cost Centres
This is where you enter any Cost Centre numbers & descriptions of these Cost Centre numbers. You may also attach General ledger codes to these Cost Centres if you have the Use General Ledger option switched on. The Cost Centres that you create must match the structure you created in the Cost Centre Structure section during Step One.
Once you have created any Cost Centres that an employees' pay or pay items may be costed to you now need to create any General Ledger codes that you have not already added when attaching them to the Cost Centres. This is done on the General Ledger Setup section of the Payroll Setup window.
Select Step Six from the Payroll Setup Cycle and the following window appears:
The Maintenance menu, which provides access to Cost Centre maintenance, can also be opened at any time by pressing F2.
Select a Cost Centre and click Select to edit it, or press F4 or click the Add button to create a new Cost Centre.
Cost Centre Code Enter the code for this Cost Centre, up to 12 digits in length. Remember to follow the structure that you created on the Payment Setup section of the Setup Payroll window.
Cost Centre Name If Cost Centre Structure Names have been set up, the Cost Centre Name is auto-generated from the Cost Centre Structure Names assigned to the various sections of the Cost Centre Code. If no Cost Centre Structure Names are defined for the code you entered, you can enter a new name up to twenty characters long.
State The State for this Cost Centre is relevant to Payroll Tax. In other words, any payments that are costed to this Cost Centre also belong to the attached State, in terms of Payroll Tax Liability. Select from:
- ACT - Australian Capital Territories
- NSW - New South Wales
- NT - Northern Territory
- QLD - Queensland
- SA - South Australia
- TAS - Tasmania
- VIC - Victoria
- WA - Western Australia
Example 1: An employer pays wages only in New South Wales - the employer would set up all of the Cost Centres as NSW and print the NSW Payroll Tax report.
Example 2: In the next year an employer moves operations to Queensland. Most of the staff are now paid from the new branch office, although some workers have remained in NSW to fulfil contracts. You could cost all normal wages to NSW and all activity involving the remaining Queensland operations to NSW. Print the Queensland Payroll Tax report - this will declare amounts costed to NSW as Interstate wages.
Cost Centre Analysis This section shows you a breakdown of the code you have just entered according to the structure you created on the Payment Setup section of the Setup Payroll window. This is where you can see if the Cost Centre number or structure needs altering.
General Ledger If the Use General Ledger Analysis option was turned on in the General Ledger section of the Setup Payroll window, a General Ledger code must be allocated to each Cost Centre. Enter the General Ledger code to attach to this Cost Centre. If the code you entered does not exist, you will be prompted to create a new code.
WorkCover Levy Rate If you are using your Cost Centres for job costing, or cost allocation, your employees may work in different areas or working environments. These areas may have different WorkCover Levies associated with them. Whenever an employee's time is allocated to this cost centre, the system can calculate the associated WorkCover Levies. To make use of this functionality, enter the rate at which the WorkCover Levy should be calculated for time costed to this cost centre.
Historical Cost Centre Over a long period of time, you may find that some cost centre codes are no longer required. To avoid having to scroll through long lists of unnecessary codes, you can hide obsolete codes from the code lookup screens by marking them as historical. You cannot mark a cost centre as historical if it is currently included in employees' Standard or Current Pays. You may reverse the historical setting at any time, making the code current again.
There is an exception to the rule above: you can mark a cost center as historical if the only employees it is associated with are terminated employees; however if a terminated employee is reinstated, any historical records associated with them will be reactivated, i.e. the Historical Cost Centre option will become disabled.