How do I create an Earning?
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Earnings
In the context of payroll, earnings refer to the compensation or income that an employee receives for their work. It represents the amount of money an employee earns based on their employment agreement, job role, and the hours they have worked during a specific pay period.
When referring to Earnings in payroll on HRplus, this can take various forms, including:
- Regular earnings: These are the wages or salaries paid to an employee for their standard working hours or fixed pay rate. Regular earnings can be based on an hourly rate, monthly salary, or annual salary.
- Overtime earnings: If an employee works more than the standard hours defined by their employment agreement or local labor laws, they may be entitled to overtime pay. Overtime earnings are usually calculated at a higher rate, often 1.5 times the regular pay rate, and can apply to hours worked beyond a daily or weekly threshold.
- Shift differentials: In certain industries or job roles that involve working different shifts or during non-standard hours, employees may receive additional earnings in the form of shift differentials. These differentials are typically higher pay rates for working evening, night, or weekend shifts.
Steps to create a new Earning:
Enter a new Earning Type
Earn Code: Enter an acronym for the Earning Description.
Description: Enter the name of the earning. E.g. Regular Salary, Straight Time, Time and one Half, etc.
Non-Taxable: The default flag is set to No as most earnings will be considered Taxable. Select "Yes"if the earning is in fact non-taxable.
Earn Factor: This modifies the rate of pay for an earning type. The Earn Factor must be a number. e.g. 1 ( for Regular or Basic Pay) , 1.5 ( for Time and a half). This will be used in the calculation of earnings. When an entry in the Cycle Changes window is for Regular Earnings, the salary in the Amount column will be multiplied by 1; if the earning type is Double Time, Earn Factor = 2, the entry in the Cycle Changes Amount column (e.g. 10 hours) will be multiplied by 2 times the hourly rate.
It is important to note, however, that in the case of NO Pay Leave, the Earn Factor will be -1.
Earn Category: The earn category defines whether the Earning Type is "Pay" e.g. Basic, Straight or Overtime Pay or if the Earning Type is of the category "Leave" e.g. Vacation or Casual.
Pay Type: Select the corresponding pay type for the Earning. The options are: Basic, Straight Time, Time and a Half, Double Time, Triple Time, Leave, Other, Non Pro (Non Productive).
Earn Type: This field allows you to specify the Type of Earning that is being defined. Choices are: Basic Time, Straight Time and Overtime.
- Basic Time: This refers to the time worked by a salaried worker. In most instances, the pay of salaried employees is usually stated in annual or monthly terms for a full-time position and a salaried employee is usually hired to work a full-time schedule. For most employers, this is around 40 hours a week.
- Straight Time is the time or number of hours established as standard for a specific work period in a particular industry, usually computed on the basis of a workweek and fixed variously from 35 to 40 hours.
- Overtime is time worked that exceeds the hours of a full-time non-exempt employee's regular daily schedule or exceeds 40 hours (or any other defined amount) in a workweek.
GL Account: Enter the account code to which the earning type will be charged.
Earn Print Order: The order that you wish Earnings to be printed on reports such as the payslip is captured here. E.g. You may wish the employee’s Straight Time to be printed first and any Overtime to be appear after, in which case you would input 01 into this field if setting up the Straight Time Earning and then 02 in this field when setting up the Overtime Earning.
Group Flag: To be used for the purpose of querying the database. For example, to group similar items, enter 1, 2 or A, B, C etc.
Vacation Advance: If the earning is to be included in a Vacation Advance payment (if given by your company), flag as Yes. Otherwise flag as No.
Affects Employee NIS: If the earning affects the calculation of NIS for the Employee, flag as Yes. Otherwise flag as No.
Affects Employer NIS: If the earning affects the calculation of NIS for the Employer, flag as Yes. Otherwise flag as No.
Affects Pension: To be flagged in accordance with the statutory laws of your country. If flagged yes, then the allowance will be used in the computation of the pension.
Step 2: Link Earning Type to Company
- Select the Company and the Earning Code to which it is linked. An earning code can be linked to several companies.
- Save the record and repeat to link additional earning codes.
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