Use Change Compensation Structure to change the Pay Grade, Currency, Pay Basis or Pay Frequency of an employee whose compensation structure is set. The workflow shows the impact of the change, works out the new amounts and records the change in Salary History.

Step 1 - Go to Employee Management > Employee List and select the employee.

Step 2 - Click Salary.

Step 3 - Click Change Compensation Structure. The Current Compensation Structure window opens.

Step 4 - Read the warning and select I understand that this change affects compensation calculations and payroll outcomes.

Step 5 - Click Continue. The Define New Compensation Structure window opens with the current values filled in.

Step 6 - Change the Pay Grade, Currency, Pay Basis or Pay Frequency as needed. Once OrangeHRM detects a change, it asks How should the Base Pay Amount be handled?

Step 7 - Select how to handle the Base Pay Amount. The options are explained in the table below.

Step 8 - If you chose Define a new Base Pay Amount, enter the new Base Pay Amount.

Step 9 - Click Proceed. The Conversion Preview and Confirmation window opens.

Step 10 - Check the Changed From and Changed To values.

Step 11 - Click Proceed. The Salary - Confirm Changes window opens with the Event set to Change Compensation Structure.

Step 12 - Select the Changes Effective From date.

Step 13 - Click Confirm.

When two options are shown, neither is selected, and you cannot click Proceed until you choose one. When only Define a new Base Pay Amount applies, it is already selected and cannot be changed. The Base Pay Amount field label shows the new Pay Basis, for example Base Pay Amount (Monthly).

Note: A structure change cannot be dated before the date the employee's compensation structure was set. If it is, the Salary - Confirm Changes window shows Cannot apply this compensation structure change on this date with the message A compensation structure change must take effect on or after the date the employee's compensation structure was set, followed by that date, and you cannot confirm. A change dated on that same date is allowed.

Changing the Pay Grade or Currency

• Pay Grade and Currency are at the top of the Define New Compensation Structure window, side by side.
• When you select a different Pay Grade, the Currency options are updated for that pay grade and the employee's location. If the current currency is not valid for the new pay grade, the Currency field is cleared and you must select one.
• If the pay grade has no currency for the employee's location, a Currency Not Configured message is shown and you cannot enter salary details until a currency is added to the pay grade.
• When you select a different Currency, you must enter the Base Pay Amount again. Changing only the Pay Basis or Pay Frequency does not clear the currency or the amount.

Salary components

When the change includes a new Pay Frequency or Currency and the employee has other salary components, the window lists them under The following salary components are currently assigned to the employee.

• Leave Remove all existing salary component values cleared to keep all components as they are. The preview shows No change for Salary Components.
• Select Remove all existing salary component values to stop all other components from the date of the change. The preview shows Discontinued, and the new record is created without them.

Note: Component values are never converted for you. Earnings and deductions on the Salary tab are treated as amounts for the employee's Pay Frequency, so check them after a change of Pay Frequency.

Pay Grade Salary Range Check

OrangeHRM checks the employee's annual base pay against the Pay Grade Salary Range (Annual) when you save a new Base Pay Amount on the Salary tab, and in the Define New Compensation Structure window. The annual amount is the Base Pay Amount × 1 for Annual, × 12 for Monthly, × 26 for Bi-Weekly and × 52 for Weekly.

If the annual amount is outside the range, a message such as I acknowledge that the annual base pay amount of $600,000.00 is outside the defined pay range (Min. $200,000.00 – Max. $500,000.00) is shown with an unticked checkbox. Select the checkbox to save the amount anyway. In the workflow, Proceed stays disabled until you select it. If the pay grade has no range for the employee, no check is made.

Changes with a Future Effective Date 

If you save a structure change with a future Changes Effective From date, the Salary tab keeps showing the current values until that date. Salary History shows the new record from the chosen date, and earlier records keep their original values. For a Set Compensation Structure saved with a future date, the Salary tab shows Compensation structure will be effective from followed by the date.

Salary Summary Totals 

For an employee whose compensation structure is set, all Earnings and Deductions values and all totals are amounts for the employee's Pay Frequency. Percentage components are worked out from the base pay row, for example Monthly Base Pay.

Example: A Monthly employee has a Monthly Base Pay of $20,833.33 and a Car Allowance of 8%. The Car Allowance is 8% × $20,833.33 = $1,666.67.

Note: For employees whose compensation structure is not set yet, the totals are worked out exactly as before, from the Annual Basic Payment and the other components.

View a Salary Snapshot 

Use Snapshot to see the employee's salary as it was, or will be, on a chosen date.

Step 1 - On the Salary tab, click Snapshot. The Select a Date for the Snapshot box opens.

Step 2 - Select the date. The Salary tab shows Snapshot as of: and the date, with the compensation structure, earnings and deductions that apply on that date.

Step 3 - Click Exit Snapshot to return to the current salary.

In snapshot view all fields are read-only, and the Set and Change Compensation Structure links are hidden. A snapshot dated before the employee's compensation structure was set shows the earlier layout with Annual Basic Payment.

Role-Based Access