Earning Codes - Calculation Tab

Access this tab using Maintain>Payroll>Earning Codes.

Use this tab to select a calculation method for the Earning Codes, choose from various calculation methods built into the system. When the designated Earning Code is assigned to an employee, the calculation method specified on this tab is used to calculate that employee's earnings.

 

Employee Pay Rate: Select this method to calculate earnings using the employee's salary or hourly pay rate (Maintain>Payroll>Employee Information>Job and Pay tab). This calculation method is typically used for standard employee wages. If an employee is salaried, the employee's salary per pay cycle is the earning amount. However, if multiple earning codes are used, then the amount is divided between the hours entered on the timesheet for each earning code. If the employee is hourly, the earning amount is the employee's hourly rate multiplied by the hours on the timesheet for that earning code.

Rate Multiplier: Select this method to have the system take the employee's hourly rate (or the equivalent hourly rate if the employee is salaried) from the Employee Information form (Maintain>Payroll>Employee Information>Job and Pay tab), and multiply it by the value specified in the Rate box. The result is then multiplied by the hours on the employee's timesheet for the earning code. This calculation method is typically used for cases such as time and one half for overtime hours, where a multiplier of 1.5 would be set.

Fixed Hourly Amount: Select this method to have the system multiply the amount specified in the Amount box, by the number of hours specified on the employee's timesheet. When using an earning code that is set up with a fixed amount, the fixed hourly amount is substituted for the pay rate that was set up for the employee on the Employee Information form (Maintain>Payroll>Employee Information>Job and Pay tab). You might set up one or more of these codes if an employee worked on several projects where different hourly rates are charged.

Fixed Amount: Select this method when an earning is based on a fixed amount per pay cycle. Enter a fixed earning amount (in the Amount box) to calculate payroll. Use this calculation method if a fixed amount is needed for an earning in addition to an employee's regular wages.

Amount on Timesheet: Select this method to have the system use the fixed amount that is entered on the employee's timesheet. Use this method to enter an actual amount on the timesheet for earnings.

Rate on Timesheet: Select this method to have the system calculate the number of hours, by the hourly rate which are both entered on the employee's timesheet. The rate entered on the timesheet is substituted for the pay rate that was set up for the employee on the Employee Information form (Maintain>Payroll>Employee Information>Job and Pay tab). You might set up one or more of these codes if an employee worked on several projects where different hourly rates are charged. Use this calculation method to pay employees different pay rates based on jobs preformed, or if you have paid shift differentials, such as different rates if they work the "graveyard" shift.

Rate, Amount: Enter a rate or amount, depending on the calculation method selected. You should enter a rate for Rate Multiplier, or an amount for Fixed Hourly Amount or Fixed Amount.

Because there is no internal default Earning Code for wages, at least one Earning Code must be entered to represent the employee's basic pay. You need to use a calculation method of Employee Pay Rate for these earnings.