Please note that this guide is an extension of the Rule Set Overview article.This article details how to enter penalties and or loadings into the system. These differ from overtime in that they normally apply on a daily basis and are calculated without regard to the pattern of worked hours established by an employee over an entire pay period.
This article includes the following:
Penalty and loadings
Before you can start to use this feature, you must first ensure that the settings are enabled. To check this click the Options button on this screen.
- Allow penalty payments
- Allow loading payments
- Pay penalties on public holiday leave
Either or both of the first two options are required before you can start adding breakdowns on this screen.
NOTE: The difference between the use of a Penalty vs Loading rule is puraly a preference based on how you would like to present this to your employees. Both types are function in the same way within the system.Once this is enabled you can click the Add button to start entering your conditions.
The condition itself includes the following
Type:
This details the rule in which the penalty will be applied at payroll, the selected option will affect the use of the other settings on this screen. The options for this setting include;
- Penalty Time:
The standard condition will treat any time cost within the selected breakdown at the penalty rate. - Penalty (Shift Starts):
Will trigger the penalty for the entire shift of the shift starts within the selected breakdown range, even if it finishes outside of it. - Penalty (Length):
Triggers the penalty if the costing exceeds the set length of the breakdown. - Penalty (Shift Ends):
Will trigger the penalty for the entire shift of the shift ends within the selected breakdown range, even if it starts outside of it. - Penalty (RTW):
Will trigger if the costing is considered as a "return to work" item. - Penalty (RDO):
Will trigger if the costing is considered as a rostered day off item. - Penalty (Less Than):
Will trigger based on the Age value specified on the breakdown. - Penalty (Shift Start - Shift Ends After):
Will trigger the penalty if the shift starts within the timeframe, but only if the shift ends after the breakdown has passed.
As previously stated each penalty time has a corresponding loading time condition, and the only difference is the wording that will appear on the costing record at payroll as well as the payslip.
Between & And:
Indicates the bracket to which the penalty will apply, please see the above for the type conditions as to what effect these settings will have on the system.
Method:
Indicates whether you wish to calculate this breakdown based on a percentage, flat rate, or a delta rate based on a plus or minus value using the employee's hourly rate as a basis.
Pay At:
Using the above method, allows you to specify the rate at which the breakdown will be costed.
On:
Allows you to specify specific days on which the breakdown will trigger on.
Cap at:
Allows you to set a maximum dollar value that the penalty will pay at.
Age:
Used to specify when the "Penalty (Less Than)" rule will trigger based on the employee's age.
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Miscellaneous Loadings
This section provides settings for additional penalty items such as casual loading.
Earns a Flat Loading of
This will trigger a loading on all normal hours that the employee has within the payroll (Overtime and penalties will be ignored). This is useful for casual employees with an award agreement to get an additional 25% on their normal time. In this instance, this would be entered as 125 on normal hours.
Include Weekend Special Rates:
Determines whether weekend special rates are included in the "Earns a Flat Loading of" loading calculation.
Include Public Holiday Special Rates:
Determines whether public holiday special rates are included in the "Earns a Flat Loading of" loading calculation.
Earns a Flat Loading (on overtime and penalty hours):
This rule is used to pay a flat loading which is added to the base rate for all worked overtime and penalty hours.
Apply Loadings To:
This is a preference thing and to determine whether or not you intend to see the loading as part of the percentage or hourly rate where the loading will be shown during payroll and on the employee's payslips.
Special rate processing order:
This determines the order of processing for special rates. The options for this include;
- Base Rate x Special Rate x Miscellaneous loading,
- Base Rate x Miscellaneous loading x Special Rate.
Earns a Casual Leave Loading:
This rule is used to pay casual employees a permanent loading with an optional additional leave loading component. The payslip description field can be used to label this information appropriately.
Includes Overtime:
This rule is used to determine if overtime is included when calculating the casual leave loading.
Includes Special rates:
This rule is used to determine if special rates are included when calculating the casual leave loading.
Cost by worked department:
This rule determines the cost split of the casual leave loading (if applicable). If an employee works in more than one department, then the casual leave loading is apportioned across the departments worked.
Payslip Description:
This is what will appear on the employee's payslip for Casual Leave Loading.If a casual leave loading is being used, this will appear separately on the employee's payslip. In the example screen shown above, employees are paid a permanent loading of 117.5% with a casual leave loading of 8.33% (an additional 1/12th), which will appear on payslips as a casual holiday loading.