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General Formula – Example 1 (Overtime Payment)

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l   Payroll-General Formula Setup

 

Assume we have to define a formula to calculate the overtime (OT) additional payment. The current OT rate is 1.5 of the basic salary. The basic salary is a fixed monthly salary.

 

Steps

1.          Turns the policy into a mathematical formula.

 

OT Pay = (Basic salary of 1 minute) x (OT rate) x (Total OT minutes)

 

2.          Think each part in the formula can be get directly by choosing a corresponding formula item in the system. Or needs further calculation.

 

 

Think

Answer

Basic salary of 1 minute

What is the definition?

Fixed assumption :

1 month = 30 days

1 day = 8 hours

 

(Monthly basic salary / 30 / 8 / 60)

 

OT rate

Fixed 1.5 now but may be changed in future.

Create a “Custom variable” called {OT rate}, and set its value to 1.5

Total OT minutes

Can be get directly from the item “Total OT (Minute)”

Use the formula item directly

 

 

3.          Re-write the formula after think

 

OT Pay = (“Monthly basic salary” / 30 / 8 / 60) x {OT rate} x “Total OT (Minute)”

 

4.          If you want to make the system calculate faster, you may simplify the formula first.

 

OT Pay = (“Monthly basic salary" / 14400) x {OT rate} x “Total OT (Minute)”

 

5.          Prepare the custom variable(s). Now you have only 1 variable have to be created. Create it and named as “OT rate”. Set it value to 1.5.

 

6.          OK now you are ready to setup the formula in system. We define the formula from TOP to BOTTOM, but not LEFT to RIGHT. That means we first understand the formula as a whole and then defines the details. The pattern of the formula is :

 

OT Pay = A x B x C

 

Where

A = (“Monthly basic salary" / 14400)

B = {OT rate}

C = “Total OT (Minute)”

 

7.          So in the system, we choose “(3105) A x B x C” in “Arithmetic category”. Now you should find all A, B, C are in red that means they are all not yet defined the details.

8.          Let’s define the 1st component A :

1.      Click on A, a new item menu popup, select “(3103) A/B” in “Arithmetic category” again because we want to setup “Monthly basic salary" / 14400 . Similarly, you see both A & B are in red.

1.      Click on A again, but this time we can choose “(1100) Basic salary” item in “Salary” category”. Press [OK] to go back.

2.      Click on B and choose “(2001) Fix number”. Click on the zero to set its value. Enter 14400. Press [OK] to go back

2.      Now you should see Basic salary / 14400

3.      Press [OK] to go back.

9.          Define the 2nd component B :

1.      Click on B, and choose “OT rate” from the “Custom variables” category. The “OT rate” variable was defined in step 5.

2.      Press [OK] to go back.

10.      Define the 3rd component C :

1.      Click on C, and choose “(2123) Total OT (Minute)” in “Attendance” category.

2.      Press [OK] to go back.

 

11.      Finished. Press [OK] to go back.

         

See also