Wages, Compensation, and Payments in the HR solution, explained

Introduction

Wages, Compensation, and Payments are an integral part of the HR Manager's responsibilities and of the upmost importance to the employee base of any organization. Hubdrive's Solution offers a comprehensive and user friendly experience for recording and preparing employee wages and ensuring accurate information for payroll preparation.

Which Wage Types are available, and how are these recorded in the system?

Hubdrive's HR for Dynamics offers an array of Wage Types that can be applied to an Employment Term to ensure transparency in wage recording, and that all wages due to an employee are agreed to by an employee before they are applied.

The following Wage Types are available for recording in employee's Employment Terms. These Wage Types are recorded with their net total in the Amount field, which is used when the Payments are being generated in order to export these for payroll processing;

  • Bonus
    A one-time or periodic additional payment given to employees, often as a reward for performance or meeting specific targets.
  • Extra Pay
    Any additional compensation provided to employees outside of their regular wages, often for overtime, special duties, or holiday work.
  • Travel Allowance
    A payment provided to employees to cover expenses incurred during work-related travel.
  • Union Wage
    The wage rate set by collective bargaining agreements between a labor union and an employer, often covering all employees within the union.

The following Wage Types come with their own specific requirements, whether this is down to a set of rules applied to an Achieved value, or whether the value paid to the employee is based on recording working hours. The special criteria for these Wage Types is explained, separately for each Wage Type, below.

  • Commission
    A Commission is a payment made to employees based on a percentage of the sales or profits they generate. In HR For Dynamics, the Commission is calculated from a recorded and Approved Achievement.
    The Achievements are the sales or profits the employee has generated, once recorded this will need to be set to Approved after the employee's supervisor has reviewed the Achievement. Once the Achievement has been approved, the Achievement is subject to fully customizable Commission Rules, these then determine the total amount of Commission the employee receives.
    For more information on Commissions, Achievements, and Commission Rules follow this link - Commissions (Hubdrive.com)
  • Hourly
    A wage type where employees are paid a set rate for each hour of work completed.
    Hourly wage calculation is dependent on completion of an employee's Time Sheet, the Time Sheet is created automatically in the system based on monthly generation. When the employee Time Sheet recording has been completed, the employee's supervisor will need to set the records to Approved for these to be considered for payment generation.
    For more information on Wages, follow this link - Compensation, wages, & payments (Hubdrive.com)

See a screenshot on where to define wage types in the solution here.

How are Currencies handled in the system?

A Currency can be set as a default in Hubdrive, with the ability to add additional currencies as required. Where a currency requires a conversion, a Commission Achievement for example, the currency conversion will only take place at the point of Achievement Approval to ensure that the most up to date and relevant currency exchange rate is used. (Screenshot)

Wages are recorded and Agreed, let's get employees paid!

In order to have payroll processing completed for the employee Wages, Hubdrive uses a 'Generate Payments' feature, this can be accessed in the ribbon menu of the following entities; (Screenshot)
  • Wages
  • Payment Summaries

When using the 'Generate Payments' feature, a form is required to be completed. The 'Generate Payments' form enables HR Managers to specify a payroll period, department, country or region, or Employer Account. This enables a flexibility and offers detailed payroll preparation depending on the requirement. (Screenshot)

With the wage type 'hourly', the approved working hours of an employee are listed in the approved time sheets. In order to create payments based on these data records, an hourly rate must first be defined and agreed in the employment terms. The amount due to the employee is then calculated based on this hourly wage and the time sheets, ensuring clarity in payroll processing.

The system also retrieves the information of an employee's Commission. Where an Approved Achievement has been recorded, then, calculated using the Commission Rules to determine the percentage of the Achievement. The employee Commission is calculated against a set of Commission Rules, these are Target or Value based Commissions.

When generating payments, the system identifies and retrieves information required by individual Wage Types from the employee base's Employment Terms. All wage types are then grouped and calculated based on the agreed wages in the Employment Terms, with the only difference being a commission achievement in a foreign currency.

The Commission an employee receives is calculated as soon as the Achievement is approved by the supervisor. If the Commission is achieved in a foreign currency, then the currency conversion will only happen when 'Generate Payments' is selected.

Wage increases due to inflation or a company-wide increase can be handled in a simple, user-friendly, and effective way by selecting 'Copy Wages' in the Wages entity, and entering the increase by the required percentage value.

For more information on managing salary increments, follow this link - Manage salary increments (Hubdrive.com)

Payment Summaries

The Payment Summaries display a breakdown of the information required for Payroll providers, detailing the Wage Types, Total Payment Amount, employees, and displays a Pie Chart that displays the Wage information graphically for an ease of use perspective on totals and their Wage Types.

Payment Summaries are broken down over three tabs, these are 'General', 'Processing', and 'Errors'; (Screenshot)

Section: General
The system displays the general information that you specified during generation as well as the total amount with a graphical overview shows how the total amount is composed of the different payment types.
The Employee Grid displays those employees who have been included in this Payment Summary, and is based on the selection made during the Payment Generation.

Section: Processing
The system displays a list of all agreed Wages that are assigned to the employees of this Payment Summary. The payments are automatically calculated from these wages.

Section: Errors
Any payments with errors during generation are displayed here.

After the data in the Payment Summaries has been checked for accuracy and any potential errors have been rectified, the data is now ready for exporting for Payroll Providers to process your payroll payments. To export this data, enter the Payments entity, select the required records, and use the 'Export to Excel' option in the ribbon. The downloaded file can now be sent to your Payroll Provider. (Screenshot)

For more information Payment Summaries, follow this link - Generate Payments (Hubdrive.com)

After the Payment Generation is complete, and the information has been exported for Payroll Processing, the Payment Summary should be deactivated, once deactivated the Payments in the Employee's Digital Personnel File are displayed as 'Paid'.

For more information on exporting Payments for Payroll Providers, follow this link - Generate payment overview for payroll provider (Hubdrive.com)