Before you will be able to calculate the amounts earned by the entity's employees during each period, you need to provide all the necessary information on the employees and configure the system using the Administration > Settings > HR and Payroll form. For more details on the settings, refer to Settings: HR and Payroll.
If your entity allows the employees purchases (through the entity) of services or products for private use, applies fines to employees for breach of policies or uses other deductions, select the Enable Payroll Deductions option.
If you provide loans to employees and periodically receive loan repayments from employees, select the Enable Loans to Employees option.
If you are going to pay to your employees for their labor using the Wages Protection System, select the Enable WPS (Wages Protection System) option. For more information, refer to Overview of WPS file processing.
Settings for Tracking Work Time
Work Day Calendars
Generally, the company has one Work Day Calendar that contains information about work days, days off, and holidays in the current year. At the end of the current year, the calendar will be extended for the coming year.
If the company has groups of employee having different work weeks (for instance, different work days through Monday to Friday or through Sunday to Thursday or including 5 and 6 days), create several calendars.
Using the HR nd Payroll > See Also > Work Day Calendars form, create all the different calendars that are in use in your organization. Refer to Work Day Calendars for more details.
Make sure that the default Work Day Calendar is selected for each entity in the entity's master record on the Accounting > Master Data > Entities form.
Work Schedules
In the current year, for each Work Day Calendar, you need to generate a Work Schedule that defines particular work hours by using the HR and Payroll > See Also > Work Schedules form. If different employees work according different Work Day Calendars, generate all the possible schedules. Mark the interval intended for work as working time and mark unpaid intervals intended for meal breaks or other breaks as non-working time. Refer to Work Schedules for more information.
Types of Work Time
On the HR nd Payroll > See Also > Work Time Types form, review the predefined types of work time to be used to correctly track working time. If needed, add more work time types that are specific for your business. Under different Work Time Types, for each employee their worked time of this type during each period will be accumulated. For details, refer to Work Time Types.
Compensation Options
Make sure that all the available in your organization types of compensation (Accrual Types) and withdrawals (Deduction Types) are configured using the HR and Payroll > Master Data > Accrual and Deduction Types form.
Examples of Earning Types (Accrual Types) are various types of compensation the employees get in return for their work: salary or wages, commissions paid on sales, overtime pay, housing allowances, other monthly paid benefits or allowances, and so forth. An example of deduction might be personal income tax which in some countries is withheld by employers.
There is a list of predefined earning types, such as Salary Daily, Salary Hourly, Overtime Hours, Bonus from Sales. There are two predefined Accrual Types for fixed-amount allowances – Accommodation, Transportation.
You can use the predefined types or add custom types by creating formulas which may include system parameters, such as SalaryFixedAmount, DaysWorked, HoursWorked, Overtimehours, and so forth that will store the actual data for each employee. Earning and deduction types can be configured as amounts calculated based on actual worked time tracked by day or by hour. For details, refer to Accrual and Deduction Types.
Benefits available for employees are defined using the HR and Payroll > Master Data > Employee Benefit Provisions form. Some of benefits depend on the employee salary, worked time, while others - do not depend. Generally, benefits are paid once a year through provisions: the defined benefit amounts are accrued monthly and are being accumulated on the intended GL accounts until paid. The available functionality allows you to configure various types of benefits.
For details, refer to Employee Benefit Provisions.
Vacations, Sick Leaves, and Other Absences
Vacations, sick leaves, unauthorized leaves reduce the worked time, however, vacations and sick leaves are paid using special rates.
According to the policies established in the country, create Sick Leave Types using the HR and Payroll > See Also > Sick Leave Types form. For each type of sick leave, you need to specify a unique Work Time Type and an Earning Type (Accrual Type). Generally, there is a preconfigured work time type, Sick Leave. For details, refer to Sick Leave Types.
Create all types of vacations that are in use in your organization using the HR and Payroll > See Also > Vacation Types form. For each type of vacation, you need to specify a unique Work Time Type and an Earning Type (Accrual Type). Generally, there is a preconfigured work time type, Vacation. For details, refer to Vacation Types.
For each possible type of unauthorized absences, you need to specify a unique work time type using the Work Time Types form. Unauthorized absences affect the compensation pay by reducing the worked time. Also, other absences are deducted from total worked days (employment length) used for calculation of the EoSB (End-of-Service Benefit) amount and earned vacation days. For details, refer to Work Time Types.
Employee Master Records and Employment Contracts
Make sure that for each employee in their employee master record (HR and Payroll > Master Data > Employees), you specified correctly the employment date, department, position, labor ID, and contract type with contract expiration date for limited-term contracts. For details, refer to Employees.
Note. To avoid errors with assignment of employees to wrong departments, make sure that folders in the Employees list match the structure of the organization and are named as entities and entity departments.
On the HR and Payroll > Human Resources Documents > Employment Contracts form, check that for each employee, a Work Day Schedule is specified.
Check that employees have the correct accrual and deduction (withdrawal) types assigned in their Employment Contracts. Also, check that the benefits of certain types are listed and available vacations (including one main vacation) are specified. For more information, refer to Employment Contracts.
If for some employees, conditions of employment were changed, register these changes by creating Employment Contract Change documents. For more information, refer to Employment Contract Changes.