Pay Rates

 

People can have a variety of pay rates, which provide several methods to correctly calculate their pay. For example, MATTHEWS, John William in Angling Adventures (Demo) has these pay rates:-

HelpPay Rates
Pay Rate
F.T. Tip  Hrs/Week
Rate 2
Rate 3
Rate 4
Rate 5
Extra Rate

(Press the 'More >>' button to see additional rates).

Hourly Rates / Wages

People are paid their 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 persons Hourly Rate.

Note: Everyone is paid based on a number of hours, even salaried staff. (The number of hours are required for costing reports and leave calculations).

Converting an Annual Salary to an Hourly Rate

An Annual Salary is converted to an Hourly Rate by dividing the Annual Salary by the number of hours in a working year.

  • For a 40 hour week, the Annual Salary is divided by 2080.
  • For a 37.5 hour week, the divisor is 1950.

The actual calculation used is:-

Hourly Rate = Annual Salary / Full Time Hours per Week / 52

Note: Other calculation methods are available for specific sectors. For example the Government uses a calculation based on a fortnightly salary of 14/365th's of the annual salary. Please refer to the drop-down list next to the person's pay rate for all of the available calculation methods.

Monthly Pays

People 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 40 hour week, enter 173.33 hours.
  • For a 37.5 hour week enter 162.5 hours.

These can be set up against a persons Timesheet Template.

For people 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 persons timesheet.

Part-Time or Casual People

Part-Time and Casual people are paid in exactly the same way as full timers. The only difference is the number of hours entered on the timesheet transaction.

Part-Time or Casual Salaried Staff

Sometimes part time or casual staff are employed on a contract specifying an annual salary. Set up these staff by recording the Full Time Equivalent Annual Salary and the Full Time Hours per Week against the person.

To pay their salary record the number of hours to pay and a T1 - Ordinary Time Payment.

Full Time Hours per Week

This value depend on your employment contract terms and conditions and hours of work. For contracts based on an 8-hour day use 40 hours per week. For contracts based on a 7.5-hour day using 37.5 hours per week. Always use the figure that would be worked for a full-time person employed under that employment contract, do not use a reduced figure for part-time or casual staff.

This figure is used for Salary and Leave calculations.

Overtime T1.5 and T2

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 persons Hourly Rate x 1.5
T2 - Double Time = Hours x persons Hourly Rate x 2

Fixed Rate Overtime

Some employment contracts specify a fixed overtime rate. This rate can be recorded in a persons Rate 2 field. Then to pay overtime at this fixed rate record the number of hours worked on a timesheet transaction and select Payment R2 - Overtime (Rate 2). This calculates the amount as the Hours entered multiplied by the persons Rate 2. Note that the R2 payment is reported as an Overtime payment.

Multiple Pay Rates

Some employment contracts specify different rates of pay for different work. There are two ways to calculate these payments:-

  1. Record each pay rate against a persons Rate 2, Rate 3, Rate 4 and/or Rate 5 fields.
  2. Add a Payment for each different pay rate.
Use Method 1 when different people are paid different rates for the same work
Use Method 2 when each different type of work is always paid at the same rate.

Adding new Payments for different Pay Rates

We have set up standard payment codes that you can enter on timesheets to use Rate 2. (See payments J2 - Second Job and R2 - Overtime (Rate 2) ). To use other rates, you will have to set up a special payment to calculate using the appropriate rate - follow a similar set up to J2 or R2.

Multiple Jobs

People may be employed to perform two or more jobs, and be paid different rates for each job. To calculate these payments record the pay rate for the 'main' job against the persons Pay Rate. For the second job use Rate 2, and so on.

To calculate a payment for a persons second job use Payment J2 - Second Job. This calculates the amount by multiplying the hours by the persons Rate 2. Note that the J2 payment is reported as an Ordinary Time payment.

Piece Work

Some people are employed on a 'piece work' basis, e.g. they are paid based on the number of items manufactured rather than an hourly wage.

These people won't 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 a person, enter the number of items in the Quantity field on a timesheet and select your piece work payment from the drop-down list.