Overheads let you track additional employment-related costs that aren’t part of employee pay, such as payroll tax, workers' compensation, superannuation on-costs, or industry-specific fringes. These entries do not appear on payslips and do not affect employee pay, but they do form part of costing analysis and, where a holding account is assigned, your accounting exports. This guide explains how to configure overhead codes, apply them to employees, and report on them accurately.
What overheads are used for
Overheads represent additional employment costs outside of wages and allowances. Common examples include:
Superannuation on-costs
Payroll tax
Workers’ compensation premiums
Industry fringes (e.g. film and television)
Project-specific overhead charges
Overheads sit on top of employee earnings to produce the total labour cost for a period or project.
They can be used for internal costing only, or included in accounting exports when mapped to a holding account.
Creating overhead codes
Overhead codes are created in the Codes screen.
To create or edit an overhead code:
Go to Codes
Select the Overheads category
Select an existing code and click Edit, or click + to create a new one
Set:
Abbreviation – short code
Description – overhead name
Calculation – Amount per pay period or Units x Rate
(Optional) Assign a Holding account to include this overhead in cost centre analysis and accounting outputs
Use Calculates on to choose exactly which pay codes the overhead applies to
Click Save
Calculation methods
You can configure overheads to calculate based on:
Amount per pay period – fixed cost
Units x Rate – most common (percentage or rate-based)
The Calculates on list determines which earnings form the calculation base.
Applying overheads to employees
Overheads must be added to employees through the Payrun screen, either individually or in bulk.
Method 1 — Bulk add (recommended for setup)
Use this if most or all employees need the same overhead.
Go to Payrun
Use Who to pay to tick the employees
Click Import → Bulk add pay entry
Set:
Type – select the overhead code
Units – any value greater than 0 (units do not matter unless the overhead formula uses them)
Rate – the percentage or amount required
Cost centre – leave blank to use the employee’s defaults, or select a specific cost centre
Click Save
For each employee, click the Template button so the overhead is saved for future pays
This creates identical overhead transactions to those created manually.
Method 2 — Add individually
Useful for special rates or employees with unique costing.
Go to Payrun
Select the employee under Who to pay
Select the Overheads tab
Click the + button
Select the overhead code
Set any required Rate or Cost centre
Click Save
Use the Template button if the overhead should continue each pay
Both methods create the same overhead transaction, and both appear under the Overheads tab.
Costing behaviour
Overheads follow the same costing rules as other pay transactions:
If Spread costs automatically is enabled, the overhead is spread proportionally across the cost centres used in that employee's pay.
If not enabled, the overhead is costed entirely to the cost centre selected on the overhead entry.
If no cost centre is selected, the employee’s default costing applies.
Overheads do not:
affect employee pay
display on payslips
show in leave or superannuation calculations
Overheads do:
appear in overhead/fringe reports
appear in cost centre analysis (if a holding account is set)
appear in accounting outputs (with a holding account)
follow all costing logic to match your chart of accounts
Reporting on overheads
Overheads appear in several reporting locations.
Payrun reports (current payrun)
Access via the Pay reports in the Payrun screen:
Overhead / Fringe / Employer schedule – lists overheads for the current pay
Pay input summary – includes overhead totals
Cost centre analysis – includes overhead totals if holding accounts are assigned
Reports screen (completed pays)
Access via the Reports screen, under the Pays category:
Cost centre analysis (batch) – includes overheads in accounting allocation
Pay input summary (batch) – includes overhead totals
Code history reports
To review all activity for one overhead code:
Go to Codes
Select Overheads
Select a code
Click Print (bottom of the code list)
This provides:
Code history (date range or batch)
Code listing (overview of setup)
Best practices
Set up all overhead codes before applying them to employees
Test with one or two employees first
Use Bulk add pay entry for initial setup
Use Template after adding overheads so they persist
Review Cost centre analysis regularly to confirm allocations
Assign a holding account only if you want overheads included in accounting exports