What's covered in this guide?
What is an earnings rate?
Earnings rates are used to calculate an employee’s net pay based on the conditions of the shift they’ve worked. Base hourly wages, overtime, allowances, and deductions are common examples of earnings rates.
These earnings rates populate an employee’s payslip and are calculated as either:
Amount per hours/minutes in a shift (e.g. base hourly)
Multiplier of an employee’s base hourly rate (e.g. casual loading)
Single fixed amount for the entirety of a shift (e.g. meal allowance)
Access earnings rates
View and configure Earnings rates through Payroll > Payroll Settings > Earnings Rates.
Import earnings rates from Workforce
If a custom award template is enabled in your Workforce account, Earnings Rates can be automatically created from the related award rules and allowances.
To do so:
Navigate to Payroll Settings > Earnings Rates
Click the Import button
Select the Custom Earnings Template in your Workforce account to import earnings rates from
Click the Import button
Depending on how many earnings rates are being imported, this will take a few minutes.
Create a new earnings rate
We recommend creating earnings rules in Workforce, and then importing them into Payroll as earnings rates. However, new earnings rates can be created in Payroll through Payroll Settings > Earnings rates and click the + New button.
When creating a new earnings rate, enter the following fields:
Name
Earnings type - Either ordinary hours, overtime hours, or tips and extras
One of either:
Hourly rate
Multiplier
Fixed amount
Journal account - Choose from any accounts set up in your journal
Use the tick box to confirm if the earnings rate accrues leave
Under Liability Configuration, select the applicable statutory liability settings for the earnings rate.
Contributes to gross for minimum wage determines whether the earnings rate is included in National Minimum Wage (NMW) calculations.
Student loan repayments follow the Employee National Insurance can be deducted setting. Hover over the information icon beside this setting for more information.
Click the Create button once finished to save the new earnings rate.
Contributes to gross for minimum wage
By default, earnings rates contribute to an employee's gross pay for National Minimum Wage (NMW) calculations.
If this earnings rate should not contribute to National Minimum Wage (NMW) calculations, untick the Contributes to gross for minimum wage checkbox under Liability Configuration.
Examples of payments that may not contribute towards NMW calculations include:
Tips and tronc payments
Premium overtime payments
Certain allowances or reimbursements
When this setting is unticked, both the pay and the associated hours for that earnings rate are excluded from NMW calculations.
Only untick this setting where appropriate for your payroll configuration and applicable HMRC guidance.
How will earnings rates appear in Payroll?
Earnings Rates in Payroll are created with either a fixed amount, multiplier, or hourly rate.
Earnings Rates are grouped as one earnings rate if they share the following details
Multipliers (e.g. x2.0)
Applicable employees (e.g. Casuals)
Related to the same award
Ordinary vs overtime hours
In the example below, the two rules apply in different circumstances (missing a break, or too small of a gap between shifts), however both rules:
Have a x2.0 multiplier
Apply to Part Time employees on the Cinema earnings rules
Consider ordinary hours
Therefore, both would be exported to the same earnings rate.
How will allowances appear in Payroll?
Allowances are also created in Payroll as Earning Rates, and generally as either a fixed amount or multiplier.
As allowances have more extensive reporting requirements, they will be imported to Payroll as individual earning rates.
