Employees can have a variety of pay rates, which provide several methods to correctly calculate their pay.
(Select the 'More Pay Rates' button to see additional rates).
This article covers:
- Hourly Rates / Wages
- Monthly Pays
- Part-Time or Casual Employees
- Full Time Hours per Week
- Overtime T1.5 and T2
- Fixed Rate Overtime
- Multiple Pay Rates
- Adding New Pay Elements for Different Pay Rates
- Multiple Roles
- Piece Work
Employees are paid Ordinary Time using their hourly rate (using T1 - Ordinary Time). This calculates the payment by multiplying the hours entered on a timesheet transaction by the employee’s Hourly Rate (for those with an annual salary the system will work out the hourly rate based on the FT hours entered on their Personal Details page.
Note: Everyone is paid based on a number of hours, even salaried employees. (The 'number of hours' is required for costing reports and leave calculations).
Employees on a monthly pay are typically paid the same each month, even though some months have more working days in them than others.
- For a 38 hour week, enter 164.66 hours
- For a 40 hour week, enter 173.33 hours.
- For a 37.5 hour week enter 162.5 hours.
These can be set up against an employee's Timesheet Template.
For employees who are paid on the basis of their actual hours worked in the month, work out the actual number of hours to pay and enter that on the employee's timesheet.
Part-Time and Casual employees are paid in exactly the same way as full timers. The only difference is the number of hours entered on the timesheet transaction.
To pay their wages record the number of hours to pay and a T1 - Ordinary Time Payment.
This value depends on an employee’s employment contract terms and conditions and hours of work. For contracts based on a 7.6-hour day use 38 hours per week. For contracts based on a 7.5-hour day use 37.5 hours per week.
Important: Always use the figure that would be worked for a full-time employee employed under that employment contract, do not use a reduced figure for part-time or casual employees. This figure is used for Salary and Leave calculations.
Time-and-a-Half and Double-Time are calculated in exactly the same way as Ordinary Time, except that the amount is multiplied by 1.5 or 2 respectively.
- T1.5 - Time and a Half = Hours x employee's Hourly Rate x 1.5
- T2 - Double Time = Hours x employee's Hourly Rate x 2
Some employment contracts specify a fixed overtime rate. This rate can be recorded in an employee’s Rate 2 field. A pay element will then need to be created, which has the calculation rule ‘rate 2 from person’. Then to pay overtime at this fixed rate, record the number of hours worked on a timesheet transaction and select the specific pay element. This calculates the amount as the ‘Hours entered multiplied by the employee's Rate 2.’
Some employment contracts specify different rates of pay for different work. There are two ways to calculate these payments:
- Record each pay rate against an employee's Rate 2, Rate 3, Rate 4 and/or Rate 5.
- Add a Pay element for each different pay rate.
Use Method 1 when different employees are paid different rates for the same work
Use Method 2 when each different type of work is always paid at the same rate.
We have set up standard payment codes that you can enter on timesheets. To use other rates, or have the pay element named something different to the standard ones available, you will have to set up a special pay element to calculate using the appropriate rate.
Employees may be employed to perform two or more roles and be paid different rates for each role. To calculate these payments, record the pay rate for the 'main' role against the employee's Pay Rate. For the second role use Rate 2 and so on, then set up pay elements. Finally, with the calculation rule, select 'Rate x from Person' where x is the position of the rate, for example, Rate 2.
Some employees are employed on a 'piece work' basis, for example, they are paid based on the number of items completed such as cartons packed, rather than an hourly wage.
These employees will not have any hours on their Timesheet Template. They will have some form of 'Piece Work' payment entered each pay day on their timesheet.
To calculate and pay piece work, you must set up a special payment. Set the Calculation Rule to 'Use Rate Amount from Payment Details' and the 'Rate Amount' to the piece work rate per item.
Then, to make piece work payments to an employee, enter the number of items in the 'Quantity Field' on a timesheet and select your piece work payment from the drop-down list.