Wage changes and how to handle them in payroll

Wage changes

Did your employee get a raise? Has the minimum wage increased?

If this coincides with a payrun (not in the middle of a cycle) then simply go to EMPLOYEES, click the EDIT icon for the employee you wish to change and then change the RATE under the "Payroll Details and Rules" tab.

If these things happen between pay cycles, here's how to handle it:

Time-based employees

Let's assume the employee is still set to their old wage. Select your pay cycle as normal. For Time-Based employees put in the number of hours they worked at their old rate and approve the line. Then click the + button to add an additional earning.

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The earnings code should be set to "Regular Hours". For rate, enter the new rate for the employee. For hours, enter the number of hours worked at the new rate. Click ADD and then SUBMIT.

You will now see the employee listed twice, once for the hours worked at the old rate and again for the hours worked at the new rate.

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Now complete your payrun as usual. The employee will see a consolidated view on their payslip but the total amount will reflect the hours worked at the old rate and hours worked at the new rate.

Don't forget to edit the employee's profile after completing this pay run to adjust their rate for future pay runs.

 

Salaried employees

Salaried employees can be edited in the same way as the time-based employees, but you will need to calculate the new rate.

Here's how: The system calculates an "hourly rate" based on the yearly rate divided by the number of pays per year, then divided by average hours. Here's an example:

Employee A makes $75000 per year. They are paid Bi-weekly, so 26 pays per year.

Bi-weekly payment is $75,000/26= $2884.615385

Average hours per week in system is 37.5, so for 2 weeks it is 75 hours.

Rate is $2884.615385/75= 38.46153847

If Employee A gets a raise to $80, 000/year you would follow the same calculation to input the new rate:

$80000/26 = $3076.923077

$3076.923077/75 = $41.02564103

New rate is $41.02564103 and you can now add the new earning just like you did for the time-based employees.

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