How to Set Up Pay Rates

What This Feature Does

Pay rates configuration allows you to set up standard labor rates for different worker types, trades, and skill levels, ensuring accurate payroll processing and project cost tracking.

The Pay Rates module includes five key sections:

1. Pay Rates: Configure and manage labor rates with overtime and penalty rate multipliers
2. Pay Rate Documents: Upload and store official award documents, EBAs, and rate schedules
3. Workers: Manage your workforce database including employees and contractors
4. Employment Types: Classify workers into categories like Full-Time, Part-Time, and Casual
5. Payroll Tags: Create flexible labels to categorize and organize pay rates and timesheet entries

Each section is accessible via tabs at the top of the Pay Rates page, allowing you to easily navigate between related payroll functions.

Initial Setup

First-Time Configuration

1. Navigate to "Pay Rates" by clicking "Pay Rates" in the left sidebar
2. You'll see the pay rates management interface with five tabs
3. The "Pay Rates" tab displays pay rate data for selected pay periods
4. Click "Add Pay Rate" to create your first rate structure
5. Visit the other tabs to set up Workers, Employment Types, Payroll Tags, and upload Pay Rate Documents

Required Information

Before setting up pay rates, gather:

• Current award rates or enterprise agreement rates
• Overtime and penalty rate multipliers
• Trade classifications and skill levels
• Project-specific or client-specific rate variations

Day-to-Day Usage

How to Create Standard Pay Rates

1. Go to "Pay Rates" in the left sidebar
2. Click "Add Pay Rate" button
3. Set up the basic rate information:
   • Rate Name: Descriptive name (e.g., "Carpenter - Level 3")
   • Trade/Skill: Select trade category
   • Base Rate: Enter hourly rate (e.g., $45.00)
   • Currency: Select appropriate currency
4. Configure overtime rates:
   • Overtime Multiplier: Usually 1.5x for first 2 hours
   • Double Time Multiplier: Usually 2.0x after 10 hours
   • Weekend Rate: Saturday/Sunday multipliers
   • Public Holiday Rate: Holiday premium rates
5. Set effective dates:
   • Start Date: When this rate becomes active
   • End Date: When rate expires (optional)
6. Click "Save Pay Rate"

How to Set Up Trade-Based Rates

1. Create rates for each major trade in your organization:
   • Carpenters: Various skill levels (Apprentice, Tradesperson, Leading Hand)
   • Electricians: Electrical worker classifications
   • Plumbers: Plumbing trade levels
   • Laborers: General and skilled labor rates
   • Equipment Operators: Different machine types
2. For each trade, create multiple skill levels:
   • Entry level/Apprentice rates
   • Qualified tradesperson rates
   • Senior/Leading hand rates
   • Supervisory rates

How to Apply Rates to Workers

1. Navigate to team members or worker profiles
2. Assign appropriate pay rates:
   • Select the worker's primary trade
   • Choose their skill/experience level
   • Set any individual rate adjustments
   • Configure overtime eligibility
3. Set project-specific rate overrides if needed
4. Save the rate assignments

Common Tasks for Construction Teams

Managing Award Rate Increases

1. When award rates increase:
2. Create new pay rates with updated amounts
3. Set effective date for the rate increase
4. Apply new rates to affected workers
5. Ensure timesheet processing uses correct rates based on work dates
6. Generate reports to verify rate changes are applied correctly

Setting Up Project-Specific Rates

1. Some projects may have specific rate requirements:
2. Create project-specific rate variations:
   • Higher rates for specialized work
   • Remote work allowances
   • Client-specific rate agreements
3. Link these rates to specific projects
4. Ensure timesheets use project rates when workers are on those projects

Managing Overtime and Penalty Rates

1. Configure overtime calculations:
   • Daily Overtime: After 8 or 10 hours per day
   • Weekly Overtime: After 38 or 40 hours per week
   • Weekend Penalties: Saturday and Sunday multipliers
   • Public Holiday Rates: Holiday premium calculations
2. Set up automatic calculation rules
3. Test overtime calculations with sample timesheets
4. Train supervisors on overtime approval processes

Advanced Rate Management

Rate Hierarchies and Progression

1. Set up career progression rate structures:
   • Apprentice Year 1, 2, 3, 4 rates
   • Tradesperson to Leading Hand progression
   • Experience-based rate increases
2. Plan automatic rate progressions based on:
   • Time in role
   • Skills development
   • Performance milestones
3. Set up reminder systems for rate reviews

Integration with Cost Codes

1. Link pay rates to appropriate cost codes:
   • Ensure labor costs are tracked accurately by activity
   • Match rates to billable vs. non-billable work
   • Create cost allocation rules
2. Use rate data for project estimating:
   • Calculate estimated labor costs
   • Compare actual vs. estimated rates
   • Improve future project budgeting

Compliance and Award Rates

1. Ensure rates comply with relevant awards:
   • Building and Construction General On-site Award
   • State-specific construction awards
   • Enterprise agreement rates
2. Regular review and update schedule:
   • Annual award rate adjustments
   • CPI-based increases
   • Negotiated rate improvements
3. Maintain records for compliance audits

Troubleshooting

If rates aren't being applied correctly

• Check that effective dates cover the timesheet period
• Verify worker assignments to correct rates
• Ensure project-specific rates are properly configured
• Review timesheet approval and rate calculation processes

If overtime calculations seem incorrect

• Verify overtime rules match your award or agreement
• Check daily and weekly hour thresholds
• Ensure weekend and holiday multipliers are correct
• Test calculations with known examples

If new rates aren't showing in timesheets

• Check that rates are marked as "Active"
• Verify effective dates are set correctly
• Ensure workers are assigned to the new rates
• Refresh or re-process affected timesheets

Tips for Construction Teams

• Set up rates before importing timesheets to ensure accurate calculations
• Use consistent naming conventions for easy identification
• Regular review rates against current awards and agreements
• Keep historical rates for audit and compliance purposes
• Train payroll staff on rate structures and overtime rules
• Use rate data to improve project estimates and pricing

Best Practices for Rate Management

Organization and Structure

• Create logical rate hierarchies by trade and skill level
• Use clear naming conventions that everyone understands
• Maintain separate rates for different types of work
• Document rate rationale and approval processes

Compliance and Updates

• Schedule regular reviews of award rates and updates
• Maintain records of rate changes and their justifications
• Ensure new rates are communicated to relevant staff
• Test rate calculations before applying to full payroll

Integration with Business Processes

• Align rates with project budgeting and estimating
• Use rate data for tender preparation and pricing
• Include rate management in onboarding processes
• Train managers on rate approval and override procedures

What's Next

After setting up pay rates, you may want to:

• Set up Workers and assign them appropriate pay rates
• Create Employment Types for classifying your workforce
• Upload Pay Rate Documents like awards and EBAs for compliance
• Create Payroll Tags to categorize and organize your rates
• Configure Timesheets to use your pay rates
• Set up Cost Codes that align with your rate structure
• Generate Reports to analyze labor costs
• Configure Invoicing to use labor rates for client billing