🎯 This article is for expert admins working with salaried employees’ payroll costs. Looking for other insights? See this article on Reporting.
Setting a fixed salary provides several options for managing your payroll costs when you have employees that aren't paid hourly in Planday. In this article, you can see the different options for setting the salary costs of fixed salaried employees and see which option works best for you.
💡 Remember that the cost allocation and payroll are different. The fixed salary will be reflected in the payroll as the set amount regardless of how you allocate the cost in the schedule.
⚠️ Please note: If you have worked with salaried employees in Planday prior to February 2019, this feature's release date, there are some important points to consider before continuing with setup. You can find more information below.
Setting up cost allocation for employees with Fixed salaries
For Fixed salaried employees, there are three ways of allocating payroll costs in the schedule with the aim of making your salary percentage as accurate as possible.
You can choose to have the payroll cost as a flat salary.
You can configure if you want the payroll costs to be split out as an average on each opening day in the given month
The third option is to manage your fixed salaried employees in Planday but exclude their salary from affecting the costs in the schedule by not assigning a salary to them.
You can set an employee’s salary allocation by navigating to People > Employees > click the name of the employee and press Edit > go to Employment tab > scroll down to the Salary section and press Edit salary.
Show salary cost allocation in the schedule based on Scheduled hours
Calculate salary cost based on Salary amount:
This option is suitable if you do your scheduling in advance. With this option, the expected hourly cost is based on the salary amount divided by the number of scheduled hours in the given period set on Salary type. The total costs in the schedule will therefore never vary from the salary amount. For example, if an employee is paid £4200 per month, contracted to work 120 hours, but scheduled for 97.50 hours, the average expected hourly cost based on this will be 4200 divided by 97.50, giving us £43.08 as the expected hourly cost.
The Payroll start day is the date of the month from which each salary calculation will begin. This value cannot exceed 28 due to February not having a higher value than 28 excepting leap years.
Calculate salary cost based on Scheduled hours:
With this option, the cost shown in the schedule is determined by the salary amount divided by the working hours to calculate the expected hourly cost, which is multiplied by the number of hours for which the employee is scheduled. The total cost can therefore differ from the salary amount, depending on how many hours for which the employee is scheduled. For example, if an employee is paid £4200 per month, and contracted to work 120 hours, then £4200 divided by 120 gives us £35.
Show salary cost allocation based on Business days
With this option, the average costs are set per day as an ongoing cost of business and can be allocated to a department. The average daily costs in the schedule will be based on the fixed salary divided by the number of business days in the given period determined by Salary type. The total costs for a salaried employee will never vary from the fixed salary. The average daily costs can vary from month to month according to business days in that month. If a salaried employee is a member of more than one department, you can select the department to which the costs should be allocated.
No allocation (default)
With this default option, an employee's fixed salary will be excluded from the total salary costs in the schedule. However, it will still be added to the payroll report.
Notes for the previous version of Salaried Employees
As mentioned at the beginning of this article, if you have worked with salaried employees in Planday prior to February 2019, you likely have a setup that requires adjustment before using the updated salaried employees feature. We have used three different methods in the past to work around previous limitations. Once you've identified the setup that you're currently using, you can follow the instructions to continue:
Fixed Cost User:
The fixed cost user is a paid-by-shift 'dummy' employee created in Planday to sit at the bottom of the schedule. This employee typically has all of the management/salaried costs which should be added to the schedule. We recommend contacting our support team to assist you with switching from this method to the updated salaried employees feature.
Paid by shift:
If your setup uses the paid-by-shift workaround, then salaried employees will have their salary calculated and split over a five-day cost. (In some cases, it may be more or less than five depending on their weekly work schedule) There are two steps to take in this scenario:
Go to People and find the employee, select the pencil icon to the right of their name, and select Groups & Wages. Here you can set the paid by shift value to zero for their employee group.
Next, go to Settings > Shift types, find the Shift type labelled 'Extra Shift', select the red delete icon on the right, and then confirm.
Once complete, you are free to set up the employee's salary using the steps outlined at the beginning of this article.
Additional Payroll cost:
The additional payroll cost setup involved leaving the salary for your employees at zero, calculating the sum of their salaries, and entering this sum as an additional payroll cost. This was set in Settings > Revenue > Month budget. To use the new salaried feature, simply remove these additional payroll costs.
Still have questions? Reach our support team via chat if you need help with this feature.
See related articles: