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- Log into your xero account
- go to settings >> payroll settings
- go to the 'pay items' tab
- set up a new pay item called 'ordinary hours owners'
- map this pay item to the correct account 'wages and salaries associated persons' in the same section
- save this item
- then go to xero main manu menu >> payroll >> employees
- You must do this step now not later: select the employee >> employment tab >> ordinary earnings rate >> set this to 'ordinary hours owners'
- select the employee/business owner >> pay template >> and set their primary earnings rate to 'ordinary hours owners'
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- Stay in the pay template for the employee: manu >> payroll >> employees >> pay template
- Click on the name of the super fund
- change the expense account to 'superannuation associated persons'
- Save the changes
For Smart Vet App owner wage calculation:
- go to the settings >> setupwizard >> making things fair >> edit monthly settings
- for owners_wage >> set all months PRIOR to the current date to zero, all months after the current date to the fair owners wage
- what is a fair owners wage? this is subjective, but for a Veterinarian working a 38 hour week, a fair wage is about $100,000 per year, so 100,000/12 for a month = 8,333 per month
- do the same for superannuation adjustment using a value of 9-10% of the owners wage adjustment eg. 833 per month
Please note that the wage adjustment is an example only, in situations where there are additional family members working in the business, then it would be more than $100,000