The Different Types of Income

There are three different options for entering income or earnings into Crystal Payroll. These options are "Ordinary", "Conditional", and "Excluded". Using the "Other Income" or "Allowance" options allows you to choose between these options. Using "Extra Pay" or "Cash-up Entitlement" will enter the income as "Excluded". These options affect leave pay rate calculations in different ways.

Ordinary Earnings

If a payment should be part of the employee's gross earnings and is less than four weeks' worth of income, it should generally be processed as Ordinary earnings. Processing income as Ordinary earnings means the income is included in the leave pay rate calculations for the Ordinary Weekly Pay, which is a leave pay rate calculated on the average earnings over the past four weeks. It will also affect the Average Weekly Earnings calculation, which is based on the average earnings over the past fifty-two weeks. As you can imagine, processing more than four weeks' worth of earnings as Ordinary earnings would cause the former pay rate calculation to increase significantly, potentially to an unreasonable amount.

Conditional Earnings

If a payment should be part of the employee's gross earnings but is greater than four weeks' worth of income, it should generally be processed as Conditional earnings. Processing income as Conditional earnings means the income is included only in the leave pay rate calculations for the Average Weekly Earnings. This means the income will only affect the leave pay rate calculated on the employee's average earnings over the past fifty-two weeks. A great example of when to use Conditional earnings is when an employee earns monthly or quarterly commissions but their usual income is paid weekly.

Excluded Earnings

If a payment should not be part of the employee's gross earnings, Excluded earnings will ensure the income does not affect the employee's leave pay rate at all. Excluded earnings may still be taxable, such as in the case of one-off accommodation allowances.