- Relationship between 'actual hours worked' calculation and employee standard work week;
- Relationship between 'actual hours worked' calculation and the business work week
- System calculations when determining actual days/hours worked
- Hourly pay rate within the pay run VS 'equivalent' hourly rate within the employee file
- What happens when an employee works an incomplete month?
Relationship between 'actual hours worked' calculation and employee standard work week
With the Employee file > Pay run defaults page, you are able to configure the 'hours per week' and 'hours per day' that is applicable for the employee. If you tick the Use standard business daily hours box, the system will automatically pre-fill the Hours per day field with the data from the Business settings > Details page:
Once this has been configured the system will use this in order to work out the maximum of hours to allocate each day, and for the week in total.
Important:
If there are employees who work a non-standard work week, they should be set up using the 'Advanced work week' functionality. This will ensure that regardless of the business settings, the system will calculate the actual hours worked based on the individual employee work hours.
Relationship between 'actual hours worked' calculation and the business work week
- Wednesday 8hrs;
- Thursday 8hrs;
- Friday 8hrs;
- Saturday 5hrs;
- Sun 0 hrs;
- Mon 8hrs;
- Tues 8hrs
System calculations when determining actual days/hours worked
Employee that worked the full month
Example: Employee works 8 hours per day, 40 hours a week. The calculation is 8 (hours per day) * 23 (work days in the month) = 184 hours.
Employee that took leave without pay
Example: Employee only worked part of the month due to taking LWOP. Specifically, that the person took 5 days of LWOP. That calculation then becomes 8 (hours per day) * 18 = 144 hours.
Employee that started later in the month
Employee with advanced working hours
- Monday: 8 hours
- Tuesday: 5 hours
- Wednesday: 9 hours
- Thursday: 6 hours
- Friday: 9 hours
- Saturday: 4 hours
- Sunday
- Total for the week = 40 hours
Employee that was terminated mid pay cycle
Example: Employee is included in a March 2022 pay run, and is terminated on the 14/3/2022 (which means they worked 10 days). If the employee's standard work week is usually a 40 hour week, the system will display a total hours worked of 80 hours.
Hourly pay rate within the pay run VS 'equivalent' hourly rate within the employee file
You might notice for salary employees that the rate per hour within the pay run does not match the 'Equivalent per Hour' rate on the Employee file > Pay run defaults page. For example, in the pay run, this salary employee has an hourly rate of RM31.90217:
.....however, if you look at their Employee file > Pay run defaults page, the Equivalent per Hour rate is RM33.86538 per Hour:
The discrepancy here is because the rate on the Employee file > Pay run defaults page is based on the fact that the employee is configured to work 40 hours per week, and earn $5870 per month. So in that case, in order for them to earn exactly $5870 per month, the calculation is $5870 * 12 / 52 / 40 = $33.86538. However, those figures are based on a 'standard' month which is 173.33 hours. So if the employee does not work exactly 173.33 hours in a monthly pay run, the system will adjust the hourly rate within the pay run to ensure their gross wage is still $5870 for the month.
Where will I see the updated hours/days displayed?
What happens when an employee works an incomplete month?
If the employee terminates or starts employment mid-month, the system will use the work week settings on the Employee file > Pay run defaults page in order to work out the actual hours/days worked.
Example: Employee is included in a March 2022 pay run, and is terminated on the 14/3/2022 (which means they worked 10 days). If the employee's standard work week is usually a 40 hour week, the system will display a total hours worked of 80 hours.
You are able to click the information modal against the pay rate in the earnings line in order to view a context panel that breaks down the calculation:
The calculation used in the above context panel is the following:
(Monthly gross rate of pay) / (Total number of working days in that month) x Total number of days the employee actually worked in that month.
If the employee works hours/days other than the standard business hours, it is strongly encouraged to use the 'advanced standard hours' function in order to allow the system to pay the correct hours.
A few things of note in regards to the 'incomplete month' context panel:
- It only displays when the employee joined or was terminated during the month and they have been paid pro-rata earnings for the month;
- It will not display where an employee has:
- advanced hours
- split earnings
- a pay rate change during the pay period
- The context panel will include the following:
- Base rate of pay
- Number of working days in month
- Number of working days in month converted to hours - employee's hours * work days
- Number of days actually worked in month - days worked are based off the employees pay run default settings, and uses the business 'work week
- Number of days actually worked in month converted to hours - employee's hours * days worked
- Hourly rate used for current period - base rate of pay / number of work hours in month