You must set up pay types for the integration with the payroll system. Hourly wage and overtime bonus are typical pay types, but you can set up numerous types of bonuses and premiums.

You can set up a pay type as a fixed amount or as a percentage of another pay type. For example, you can set up overtime bonus as a percentage of the hourly wage.

Employees can have specific rates for each pay type and all rates can be connected to a certain period.

By using the parameter setup, you choose whether the rates are used when calculating costs. Otherwise, cost categories are used.

Set up a pay agreement for each group of employees who are paid according to the same general agreement.

Employees can be paid according to the same pay agreement, but have different rates or bonuses. For example, a bonus can be related to seniority, a specific operation, or an activity.

Use pay agreements to define which pay types are paid for different types of working hours. Typical types of working hours are standard time, overtime, and premiums.

To control flexible hours in the payroll system, you must set up pay agreement lines for Flex+and Flex-even though no pay is generated.

Pay agreements must take into consideration how calculation parameters are set up. For more information about calculation parameters, see About calculation parameters.

Key issues to consider

You can use the pay adjustment feature to calculate the correct wages. In Shop Floor Control, the pay time is calculated every day. But in some cases pay time cannot be calculated until the end of the week.

If an employee has worked overtime on Monday and is late on Tuesday, the employee may receive reduced overtime paid for Monday. The pay adjustment feature is intended for such a scenario. For more information about pay adjustment, see About pay adjustments and count units.

You can delimit a pay line by using a count unit.

For example, suppose that a premium is paid only when an employee has worked on a specific operation for more than 10 hours in the same week. The count unit will count every hour on this operation and only pay the premium if the employee works more than 10 hours in one week. For more information about count units, see About pay adjustments and count units.

In the pay agreement, you can set up automatic premiums. For example, an automatic premium can be set up if employees who work on a specific operation are paid a bonus.

You can add manual premiums, such as mileage, when approving registrations. Manual premiums can be based on a pay type. For information about adding manual premiums, see Edit registrations during approval.