Defining Pay Plans

Pay plans define pay periods and work periods. You can define FLSA overtime pay plans or non-overtime pay plans.

To define pay plans

  1. Access Pay Plan (PR21.1).
  2. Specify pay plan parameters. Use the following guidelines to enter field values:
    Pay Plan

    Type the name and description of the pay plan.

    Effective Date

    Type the date the pay plan goes into effect.

    First Pay Period End Date

    Type the end date of the first pay period in this plan.

    Pay Frequency

    Select how often pay is calculated for this pay plan.

    First Work Period End Date

    Type the end date of the first work period in this plan.

    Days in Work Period

    Type the number of days in the work period (7-28).

    Use 53, 27 for Pay Periods

    Select Y if you want to use 53 weekly or 27 biweekly pay periods for tax purposes instead of the standard 52 or 26.

  3. For overtime plans only, enter overtime parameters. Use the following guidelines to enter field values:
    Overtime Plan

    Select Yes if the plan will provide the parameters to calculate overtime.

    Calculate Overtime Hours

    To use the calculated hours method, select Yes.

    To use the supplied hours method, select No.

    Hours in Work Period

    Type the number of hours after which overtime is paid.

    Maximum Hours Per Day

    For daily overtime plans only, type the number of hours after which overtime is paid.

    Overtime Premium Rate

    Type the overtime premium rate.

    For example, for overtime calculated at time and one half, type 50.00 to indicate the premium rate.

    Note: If you leave this field blank, the premium rate defined for the pay code defaults.
    Overtime Pay Code

    Enter the overtime pay code. For overtime plans, Payroll automatically calculates the overtime and creates a time record for the overtime pay code.

    Note: It is recommended that aunique pay code be used for FLSA overtime.
    Work Period

    Specify whether overtime pay is based on a fixed work week or a fluctuating work week.

    A fluctuating work week means that the salary is intended to compensate the employee for the entire work week, regardless of the number of hours worked. With this method, the more overtime an employee works, the smaller the regular rate used in calculating overtime becomes.

    A fixed work week means that the salary is intended to compensate the employee for a specified number of hours per week.

    Fixed Hours

    If you selected Fixed in the Work Period field, type the number of hours per work period that a salaried employee's pay is intended to compensate.

Related Reports and Inquiries

To Use
Inquire on pay periods and work periods created for pay plans Pay Period Inquiry (PR21.2)
List pay plans Pay Plan Listing (PR221)
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