Update your payroll policies
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This article is for Owners and admins who use Humanised
Overview
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Set up calculation policies to suit your organisations unique payroll process
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Set up payroll policies for Nopay, Overtime and more
Now that you have completed your basic company details and the next step is setting up your new HR and payroll system with the payroll policies. HR and payroll management process can look vastly different from one company to another specially in Sri Lanka. Humanised has recognised this need. You can learn how to customise the software to suit your unique process better in this article.
Step 1 – Go to company settings
Go to the last section on your left-hand navigation panel, the settings section. Click on “company settings”
Step 2 – Update your calculation policies to suit your payroll process
1. Pay cycle
Although the pay cycle for most salaried employees is generally a month or 30 days, the start and end dates can vary from company to company depending on a number of reasons. There are 2 common patterns we have identified. Some companies define their pay cycle from the first of the month to the end of the month. Which some others usually start their pay cycle on a day like 26th of the previous month which means their pay cycle end on the 25th of the next month. In this field you simply have to fill in the start date of your pay cycle and it will automatically edit your pay cycle for each month according to what you have filled in
2. EPF/ETF numbers
Imply fill in the zone and the number for EPF and ETF for your organisation. Typically employee EPF/ETF number are written with the company number in the front. Eg := 234/B/12
3. Working hours
Filling in the start and end time is optional, and it does not get involved in any calculations. But the following details are mandatory
a. No.of working hours per day
This is what you consider for calculation purposes. Typical it will be 8 hours per day
b. No.of working days per month
This is also for calculation purposes. There are 3 option you can choose from.
I. Fixed – You can use a fixed no.of of days each month
II. Calendar – Your no.of days for the month will be the same as the no.of calendar days in each month.
III. Variable – This is if you decide that you want a different count each month. If you choose this option add the number of days every time you create a payrun
c. Preferred input format
When uploading no pay or Overtime times for the month, you can choose between two input formats
I. Days and hours – If you select this option, your input will be in days and hours. So an input like 1.5 would mean I day 5 hours
II. Days and half days – if you select this option, your input will be in days and half days. So an input like 1.5 would mean one and a half days
III. Decimal inputs – if you select this option, your input will be considered as a decimal number. So, an input like 1.25 would mean one day and a quarter of a day
4. Input values with four decimal places
This is a practice of some accountancy professionals. If you switch this on toggle, you can input and do calculations on values with 4 decimal places. And have the final figures rounded off to 2 decimal places. This will ensure better accuracy.
Step 3 – Update your payroll policies
1. Hourly/day rates for calculations
This series of settings helps you cater to different nuances in calculating the hourly rate or day rate for your pay items. This is important in 3 different pay items which you can choose to use,
a. No pay
Here’s how your no pay rate gets calculated.
I. Switch on the toggle and select which pay items will be used to calculate the no pay rate.
II. This rate will be multiplied by your employee’s no pay time to get the no pay amount for the month
b. Over time
Here’s how your overtime rate gets calculated.
I. Switch on the toggle and select which pay items will be used to calculate the overtime rate.
II. Configure the overtime types and their rates that you want to use. If you want an overtime type called “Normal Overtime” and the hourly rate to be multiplied by only one, select the rate as one. If you want an overtime type called “Double overtime” and your hourly rate to be multiplied by 2, select the rate as two.
c. Pro-rated salaries
Here’s how your monthly salaries get prorated.
I. Switch on the toggle
II. Select which pay items will be used to calculate the daily rate for employees who joined or resigned in the middle of the pay cycle
2. Stamp duty
Switch this on to deduct stamp duty on net salaries above 25,000 LKR
3. Budgetary relief allowance
Switch on to apply budgetary relief allowance 1 and 2 when applicable to your payruns
4. Foreign currency pegged payrolls
This feature can be used to make up for the fluctuating value of the Sri Lankan rupee compared to a foreign currency associated with the generated income. you have the option of maintaining base salaries in LKR or a foreign currency of your choice. The variance will be added as an allowance to the payrun
5. Tax on tax
Switch this on if the employer bares the APIT liability onbehalf of the employee.
What’s next?
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