🎯 This article is for expert admins working with salaried employees’ payroll costs. Looking for other insights? See the article on Reporting in Planday.


What is salary cost allocation

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. Fixed salary will be reflected in the payroll as a set amount regardless of how you allocate the cost in the Schedule.


Setting up cost allocation for employees with fixed salaries

For fixed salaried employees, there are three ways of allocating payroll costs in the Schedule to make 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.

  • You can 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 as set in the Salary period. Therefore, the total costs in the Schedule will never vary from the salary amount.

🧩 For example, if an employee is paid a £4200 fixed salary per month, is contracted to work 120 hours, but is scheduled for 89 hours, the average expected hourly cost based on this will be 4200 divided by 89, giving us £47.19 as the expected hourly cost.

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The Payroll start day is the day 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 expecting 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. , This is multiplied by the number of hours for which the employee is scheduled. The total cost can differ from the salary amount, depending on how many hours the employee is scheduled to work.

🧩 For example, if an employee is paid £4200 per month, and contracted to work 120 hours, then £4200 divided by 120 gives £35 as the expected hourly cost.

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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 Salary period. 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 period.

If a salaried employee is a member of more than one Department, you can select the Department to which the costs should be allocated.

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No allocation (default)

With the 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.

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Still have questions? Reach our support team via chat if you need help with this feature.


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