Cost Codes Explained

Cost codes allow you to link specific pay information to particular cost centres, which could be departments, business units or even customer jobs. Each employee can have a default cost code assigned in the Payee Job Details screen. All costs related to that payee will then be associated with that cost code.

However, you can over-ride the payee's default cost code for specific pay items by assigning a cost code to that pay item in the Pay Item Set up screen. That specific pay item will then be allocated to the cost code you select, regardless of which payee has the pay item. You might have a 'bar shift payment' in a hotel that may be paid to any staff member when they serve behind the bar. Assigning a cost code to the pay item ensures that it is always costed to a specific cost centre, regardless of which employee was paid the item.

You also have the option of selecting a cost code when the pay item is added to an employee's pay. In that way you can over-ride the cost code just for that item in this pay. You can have multiple occurances of the same pay item in the same pay for an employee, with different cost codes selected for each occurrance.

If an employee's pay method is 'Holding Account', then theeir net pay is included in the total for the cost code specified by the holding account entered in their Payee, Pay Details form.

When the Costing Report is printed, all the payroll costs are allocated to cost centres in the following priority:

Pay calculation cost code the cost code allocated when a pay item is added to a pay over-rides any other cost code.
Pay item default cost code any cost code entered in the pay item set up screen will over-ride a payee default cost code.
Payee default cost code provides the default cost code to be used for all the payee's pay items, unles over-ridden by a pay item set up, or pay calculation entry.