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 allow 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. For more information on what items should be excluded, please view Page 88 and onwards of this Employment New Zealand Guide. You may also find more information below.

Ordinary Earnings

If a payment should be part of the employee's gross earnings, and is less than four weeks' worth of income, then it should generally be processed as Ordinary earnings. Processing income as Ordinary earnings will mean that the income is included in the leave pay rate calculations for the Ordinary Weekly Pay, which to simplify, is a leave pay rate calculated on the average earnings over the past four weeks, but it will also affect the the Average Weekly Earnings calculations, which is a leave pay rate calculated on the average earnings over the past fifty-two weeks. As one could imagine, processing greater than four weeks' worth of earnings as Ordinary earnings would mean that the former pay rate calculation would be greatly increased to a potentially 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, then it should generally be processed as Conditional earnings. Processing income as Conditional earnings will mean that the income is only included in the leave pay rate calculations for the Average Weekly Earnings. This means that 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 the rest of their income is usually paid weekly.

Excluded Earnings

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