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
- Standard Rate = $20/hour
- Specific Day Rate = $30/hour
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 is multiplied by 1.5. If the number of days is more than 8 consecutive days, the employee's base pay is multiplied by 2.0, and the amount will be paid to the employee.
7th Consecutive Day Threshold = 8 hrs
Time Up to = OT - Over Time
Time Exceeding = DT - Double Time
How to Set up Unworked Holidays Pay Code Rules
This enhancement introduces a dedicated pay code for scenarios where an employee receives paid holiday without working, specifically when the holiday falls on a scheduled workday, but the employee does not punch in. This ensures accurate payroll processing for paid holidays without attendance.
How to Set up Multiple Consecutive Days Rules
HR Admins can now configure Multiple Consecutive Days Rules using tiered pay codes for up to 7 consecutive days, offering greater flexibility and alignment with complex pay policies. For example, the system can be set to award Overtime at 1.5x after 4 consecutive working days, and Double Time at 2.0x after 5 days. These thresholds can be stacked to reflect progressive pay structures, ensuring accurate and compliant compensation.
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 worked on a non-working day or holiday, the setup defines how their basic pay should be calculated.
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 day, you can set up, based on the number of hours, how the basic pay should be calculated.
Step 3 - To standardize punch times for payroll calculation, you can configure round-off rules for employee punch-ins and punch-outs. The following article outlines step-by-step instructions on how to configure round-off rules. Refer: How to Configure Round-off Rules for Punch-In and Punch-Out
The system now evaluates the total work duration across all attendance records for the day before applying break deductions based on the work schedule or roster. If an employee takes a shorter break than scheduled, the system deducts the remaining time.
If a longer break is taken, no additional deduction is applied. This applies to all working days and is triggered only when the minimum work duration is met. Refer - How to Configure Break Rules Under a Pay Policy
Step 4 - After setting up the rules, click the "Save" button.
Step 5 - In the next step, you need to select the employees. Click the "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.
- Location - Filter employees by their assigned location (e.g., Australian Region).
- Sub unit - =Filter by department or a specific division within the organization.
- Job Title - Search for employees holding a particular job title.
- Employment Status - Filter based on the type of employment.
Step 6 - Once you select the relevant employees, click on the "Save" button.