Calculation Methods

Calculation Methods allow for calculation formulas to be defined and to be included in the calculation of pays. This is commonly used when calculating shift, overtime and leave loading.

When establishing a Calculation Method, the following points should be considered:

  • Each Calculation Method is identified by a combination of a Classification, corresponding to the Hours Type Classification, and a Calculation Code. The Classification is significant as it links a Calculation Method to an Hours Type.
  • The value associated with the corresponding Hours Type is used in the calculation formula. Associated Hours or the Pay rate can be used.
  • The result from a Calculation Method must be in hours or a fixed amount.
  • The result from a Calculation Method must be allocated to an Hours Type or an Allowance/Deduction. A combination of both cannot be used.

Each Calculation Method may involve up to ten levels of calculations, identified by a record number. The result of each level, which may be a rate or monetary value, is carried forward to the next level until the end result is achieved at the final level.

 

The following examples show how the Classification, Calculation Method Code and Record Number combination are used.

Example:

Classification Calculation Code Record (Level) Number Comments
N = Normal

01

 1 First level of the N01 calculation formula
N = Normal 01 2 Second level of the N01 calculation formula
N = Normal 01 3 Third level of the N01 calculation formula
A = Annual leave loading 01 1 First level of the A01 calculation formula
A = Annual leave loading 01 2 Second level of the A01 calculation formula
N = Normal 02 1 First and only level of the N02 calculation formula

 

The calculation code allows for more than one Calculation Method for the same classification to be established.

The N01 and N02 calculation methods can only be linked to Hours Types with a classification of N - Normal. The A01 Calculation Method is only linked to Hours Types with a Classification of A - Annual leave load.

 

There are three ways of applying Calculation Method:

  1. On a Time Entry record for a particular payrun: Many of the Time Entry records include a Calculation Method field in their overrides. This is useful if applying or stopping a Calculation Method on an ad hoc basis. This method of application overrides the next two methods.

     

  2. Via the Payment Details window: A Calculation Method may be applied to one of the following:
    • Annual Leave
    • Sick Leave
    • Long Service Leave
    • Workers Compensation
    • Other Leave
    • Normal Hours
    • Overtime
    • Public Holiday
    • RDO
    • Leave Loading

     

    The Payment Details window can also contain Average Rates that can be used in a Calculation Method.

    This method of application overrides the next method.

     

  3. An Hours Type record: The Calculation Method can be performed whenever the Hours Type is used in a payrun. This method of application can be overridden by either point 1 or 2.

 

The following examples will show how Calculation Methods can be used. All the examples will show an employee being paid a shift loading. These will demonstrate three different ways of setting up a Calculation Method for this purpose, each producing the same end result.

Hours Type Classification N = Normal
Hours Worked 40
Shift Loading 15%
Hourly Pay Rate $10.00

 

This calculation method can be used to replace the original 40 hours with 46 hours of the same Hours Type. The relevant Hours Type code is entered in the Code for Loading field and 'H' (Hours) is selected for the Code Type field. The pay is then calculated as 46 hours at $10.00 per hour.

Classification Calculation Code Level Number Calculation Rate Modify Hrs/Rate Calculation
N 1 1 1.1500 Y = Hours 40 hours x 1.15 rate = 46 hours

 

The original 40 hours remain intact while the 6 hours are allocated to a different Hours Type. The relevant Hours Type code is entered in the Code for Loading field and 'H' (Hours) is selected for the Code Type field. The pay is then calculated as 40 hours at $10.00 per hour and 6 hours at $10.00 per hour.

Classification Calculation Code Level Number Calculation Rate Modify Hrs/Rate Calculation
N 2 1 1.0000 Y = Hours 40 hours x 1.0000 rate = 40 hours
N 2 2 0.1500 Y = Hours 40 hours x 0.1500 rate = 6 hours

 

The original pay rate for the normal 40 hours remains intact at $10 while pay rate for the shift loading is calculated at $1.50 per hour. To allocate the result of the calculation of $60 to an Allowance/Deduction, the relevant Allowance/Deduction code is entered in the Code for Loading field and 'A' (Allowance) is selected for the Code Type field.

Classification Calculation Code Level Number Calculation Rate Modify Hrs/Rate Calculation
N 3 1 1.0000 N = Pay Rate 40 hours x ($10.00 x 1.0000) = $400
N 3 2 0.1500 N = Pay Rate 40 hours x ($10.00 x 0.1500) = $60