A pay policy is a set of rules and guidelines that govern the pay of employees. It ensures that your compensation budget is dispersed more evenly, taking into consideration the number of hours worked in an organization. Basic pay can be defined as the rate at which the organization is contracted to pay the employee and may be stated as an hourly, daily, weekly, monthly, or annual sum. It is the payment the employee expects to get, irrespective of bonus, overtime, or commission rates. For some employees, basic pay is the same as total remuneration. For others, it may represent only a small part of their earnings, the rest being made up of variable amounts because of sales commission, piecework rates, etc.
The primary motivation for many businesses to create an internal pay policy is to ensure that everyone gets paid fairly and in accordance with the company's strategy and goals.
As a result, the primary goals of human resource pay strategies are to:
- Attract and retain talent
- Satisfy the financial needs of the workforce.
- Guarantee fair and equal pay
Go to Attendance -> Pay Policies
Step 1 - Click "Add Pay Policy" to create the pay policies.
Step 2 - Add the pay policy name, period, and start date. Enable the "Enable Working Day, Non-Working Day and Holiday Rules" to select the rules, and click "Add Rule".
| Field | Description |
| Pay policy name | Add the pay policy name here |
| Pay period |
Select the suitable pay period
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| First Pay Period Start Date | Choose a date for the pay policy to begin. From that point forward, the system will monitor employee attendance records and compute based on the rule. |
| Add Rule |
When the "Enable Working Day, Non-Working Day and Holiday Rules" is Disabled,
When the "Enable Working Day, Non-Working Day and Holiday Rules" is enabled, The following are the rules that you can select when setting up the.
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How to Set up Daily Rules
For example, the employees work up to 8 hours on a regular basis (RT) per day, and if they exceed the hours, based on the policy, the base pay will be increased.
1st Daily Threshold = 8 hrs
Time Up to = RT - Regular Time
Time Exceeding = OT - OverTime
2nd Daily Threshold = 12 hrs
Time Exceeding = DT - Double Time
How to Set up Weekly Rules
If you are setting up the pay policy rules for the weekly or consecutive days, add the rules by clicking the "Add Rules" button. Ex: Employees need to work 8 hours per day for the entire week, and if the total number of hours exceeds 40, the base pay will be multiplied by 1.5
Weekly Threshold = 40 hrs
Time Exceeding = WOT - Weekly OT
How to Set up Specific Day Rules
Define pay adjustments for specific days, such as weekends or public holidays:
Example: For a retail organization, employees working on Sundays receive additional pay based on the policy. If the standard rate is $20/hour, the Sunday pay rate can be set to $30/hour.
Specific Day: Sunday
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Standard Rate = $20/hour
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Specific Day Rate = $30/hour
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How to Set up Consecutive Rules
Ex: Employees need to work 8 hours per day for 6 consecutive days, and on the 7th day the employee's base pay multiples with 1.5 and if the number of days is more than 8 consecutive days, the employee's base pay multiples by 2.0, and the amount will be paid for the employee.
7th Consecutive Day Threshold = 8 hrs
Time Up to = OT - Over Time
Time Exceeding = DT - Double Time
How to Set up Non-Working Days and Holiday Rules
The pay policy rules apply if an employee works on a non-working day or holiday. Based on the number of hours that they work on a non-working day or a holiday, how their basic pay should be calculated can be defined using the setup.
For example, If the policy rule has been set up to work 8 hours per day and if an employee works on a holiday or a non-working you can set up based on the number of hours how the basic pay should be calculated.
How to Set up Round-off Rules
It can be difficult to handle very small segments of logged employee hours, such as seconds or just a couple of minutes. These micro periods of work time can be a challenge when you are trying to finalize your weekly or monthly payroll runs. This is one of the primary reasons to configure the rounding options.
Four rounding-off rules can be configured in the system as follows.
- Round-off Punch In -
- Round Off to Nearest: 5 Minutes, 10 Minutes, 15 Minutes, 30 Minutes, 1 Hour
- Round Off to Shift Times: 5 Minutes, 10 Minutes, 15 Minutes, 30 Minutes, 1 Hour
- Round-off Punch Out -
- Round Off to Nearest: 5 Minutes, 10 Minutes, 15 Minutes, 30 Minutes, 1 Hour
- Round Off to Shift Times: 5 Minutes, 10 Minutes, 15 Minutes, 30 Minutes, 1 Hour
You can now view the actual punch-in and punch-out times in the attendance records. To enable this, simply check the box labeled "View Actual Punch In Time" and "View Actual Punch Out Time". Once enabled, both the actual and rounded times will be displayed for greater accuracy and transparency.
Step 4 - After setting up the rules, click the "Save" button.
Step 5 - In the next step, you need to select the employees. Click this "Employee selection" button.
To your left side corner, there are some filters that you can use to select the correct set of employees who are going to fall under the pay policy.
Ex: Select the location as Australia and you can see the employees belong to that location. After that click save.
If you want to at a particular employee you can enter the employee name in the search bar, select the employee, and click save.