Payroll: Creating Payroll policies

Payroll policies ensure that employees are paid at the correct designated time stipulated in their contract to maintain contractual obligations. 

Super admins and Payroll admins can create policies for their employees. Payroll policies define the rules for payroll cycles. Each cycle generates an export of relevant employee, salary and absence data which can be synced with your payroll provided to pay your employees. 

Table of Contents

Basics
Timing
Export: Employee attributes
Export: Salary and Absences

Create a policy

To create a policy, navigate to 'Payroll' > 'Policies' > 'Actions' > 'New policy'. 

Basics

Within the policy, you can designate a name and description of the specific policy rules. Different policies can relate to different contract types (ie. Contract, full-time, etc) to ensure specific rules in payroll are followed for each. 

Timing

• Select cycle frequency - the cycle frequency defines how often your payroll runs. For example, an employee assigned to a monthly payroll cycle is paid once a month. User profiles should have the correct pay frequency assigned that matches the assigned payroll policy cycle. 
• Date picker: Admins can then select a date when the cycle starts. The cycle start date is the first day of the pay cycle, when the new cycle is created.
• Cycle end date: The cycle end date is added automatically based on the Cycle start date and cycle frequency. The cycle starts on a specified date and repeats based on the cycle frequency selected previously (monthly, etc.)

Please note: the dates 29-31 will not be eligible to be selected in the date picker, as these dates do not consistently repeat each month. 

Please note: Only calendar month payroll cycles are allowed in Germany, and policies should be created with that in mind, in order to align with DATEV and German standards. 

Once a cycle is created, the start date cannot be edited. If you need to edit a cycle start date after a cycle has started, please create a new policy with a different start date. 

• Review day: sends a notification to all payroll admins on the review day. Review day should be on or before the approval date. Input a specific number of days before the cycle end date to review the cycle. 
• Approval day: sends a notification to all payroll admins on the approval day. Approval day should be on or after the review date and on or before the cycle end date. Input a specific number of days before the cycle end date to approve the cycle. 
• Prorate calculation: Relevant for changes during the month (e.g. entry or exit of the employee after the first day of the month). You would need to define if prorated salary calculation should be based on a 30-day month or on all the days of the month, via the drop down menu. 

Please note: If you are unsure which proration method to use, please contact your accountant. 

• Connect Time Tracking with Payroll - For hourly workers, payroll is based on approved hours tracked in the time tracking module. Only hours approved by the payroll cycle's cut-off date are included in the current payroll period.If hours are not tracked or approved in time, they will automatically roll over to the next payroll cycle.

  To streamline this process, we recommend:

  • Aligning time tracking policies with payroll policies.
  • Using the same timesheet frequency as the payroll period for hourly workers.
  • Ensuring timesheet start dates match the payroll period for accurate alignment.

Please note: Many companies use a "lagging payroll period" for hourly workers to ensure all hours can be approved before payroll processing.

Export: Employee attributes

The payroll export will include certain attributes for each employee. 

The default attributes included are:

• First name
• Last name
• IBAN
• BIC
• Different bank account holder
• Primary or secondary employer
• Name of health insurance
• Type of health insurance
• Taxable church affiliation
• Marital status
• Social security number
• Tax identification number
• Income tax class
• Birthday
• Address (street and number)
• Address (postcode)
• Address (city)
• Address (country)
• Termination date
• Job title
• Weekly hours
• Start date

Admins can add/delete different attributes they would like included in the payroll export. 

To add a new attribute, click 'New attribute', and select an attribute to include in the export. You can also provide a custom name for any of the included attributes, which would also be included in the export of the payroll cycle.

Any of the user attributes assigned to a user, as well as custom attributes, can be included in the payroll policy export. 

Export: Salary and Absences

The following properties are included in the export by default and cannot be removed:

• Salary type
• Base salary
• Salary per hour
• Compensable time(h)
• Hours worked
• Paid absences (h)

Please note: All compensation types assigned to users in this payroll policy will also be automatically included in the payroll cycle dashboard and export.

All approved absences for any paid absence type logged with the policies will be included in the payroll exports. You can (multi-)select the specific absence policies that will be included in the export in the dropdown. 

Once all the relevant information is included, you can click 'Save' to save the policy as a draft, or you can click 'Activate' to set the policy as live. 

If you need more information on how to assign a payroll policy, please see the article linked here.