Compensation and Benefits

Pay Grades

Pay Grades are important when setting up employee compensation as they provide a structured framework for defining salary ranges based on job roles and responsibilities. By assigning employees to specific pay grades, organizations can ensure fairness and consistency in their compensation practices.

Creating new Pay Grade

To create or edit Pay Grades, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Pay Grades card.
3. On the Pay Grades page, click on the Add button (typically represented by a plus icon).
4. In the Add Pay Grade popup window, enter the following information:
   • Code: Enter a unique identifier or code for the Pay Grade.
   • Role: Specify the job role such as Rank and File, Supervisory, or Managerial.
   • Monthly Salary From: Enter the lowest monthly salary amount within the range.
   • Monthly Salary To: Enter the highest monthly salary amount within the range.
   • Description: Provide a description or additional details about the Pay Grade.
5. After entering the necessary information, click the Add button to create the Pay Grade record. The newly created Pay Grade will be added to the list on the Pay Grades page.

Updating existing Pay Grade

To edit a Pay Grade, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Pay Grades card.
3. On the Pay Grades page, locate the Pay Grade record that you want to edit.
4. Click on the record to select it and view its details.
5. On the Pay Grade Details page, click on the Edit button (typically represented by a pencil icon) next to the Pay Grade information.
6. In the Update Pay Grade popup window, modify the necessary details that you want to change.
7. After making the necessary updates, click the Save button to save the changes. The Pay Grade record will be updated with the new information.

Compensation and Benefits

Setting up compensation and benefits in a payroll system is crucial for accurate payroll processing, compliance with regulations, transparency, efficiency, and effective management of employee compensation. It plays a pivotal role in supporting HR operations, enhancing employee satisfaction, and facilitating strategic decision-making within the organization.

General guidelines for editing compensation and benefits

When editing Compensation and Benefits, please note of these general guidelines:

1. If the existing record status is Created, you can freely edit or delete the record without requiring approval. When all the details are ready for review and approval, you can set the record to For Review to initiate the review process.
2. If the existing record status is For Review, it cannot be edited.
3. If the existing record status is Rejected, you have the option to edit or delete the record.
4. If the existing record status is Approved, editing the record will create a new record with the status Created. The previously Approved record will remain visible until the new record is approved. Once the new record is approved, the old record will no longer be displayed.
5. If the existing record is Approved, you still have the option to delete the record, but this action will require approval for deletion.

These rules ensure that the appropriate review and approval workflow is followed when making changes to Compensation and Benefits records.

Adding Basic Salary and Pay Grade

To set up compensation and benefits for a user, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Compensation and Benefits card.
3. On the Compensation and Benefits page, select and click on the appropriate Calendar Year record from the list.
4. On the Compensation & Benefits > Calendar Year page, locate and click on the user you want to update.
5. On the Compensation & Benefits page for the selected user, expand the Compensation section.
6. Click on the Add Basic Salary and Pay Grade button (+ icon).
7. In the Update Salary & Pay Grade window, enter the Monthly Basic Salary for the user.
8. Choose the appropriate Pay Grade from the available options.
9. If the user is eligible for overtime pay, enable the Overtime Pay Eligible switch button.
10. If the user is eligible for Night Differential pay, enable the Night Differential Pay Eligible switch button.
11. Enter any comments if necessary.
12. Click the Save button to create the record. Initial status will be set to Created.
13. To set the status to For Review, click on the compensation record then click For Review icon.

Editing Basic Salary and Pay Grade

To edit Basic Salary and Pay Grade on the Compensation and Benefits page, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Compensation and Benefits card.
3. On the Compensation and Benefits page, select and click on the appropriate Calendar Year record from the list.
4. On the Compensation & Benefits > Calendar Year (Year) page, select and click on the user for whom you want to update the Basic Salary and Pay Grade.
5. On the Compensation & Benefits page for the selected user, expand the Compensation section.
6. Locate the Basic Salary and Pay Grade record that you want to edit and click the record to display the edit button. Click on the Edit button (pencil icon) next to it.
7. In the Edit Salary & Pay Grade window, update the necessary details such as Monthly Basic Salary and choose a new Pay Grade from the available options.
8. If the user will be eligible for overtime pay, enable the Overtime Pay Eligible switch button.
9. If the user will be eligible for Night Differential pay, enable the Night Differential Pay Eligible switch button.
10. Enter any comments if necessary.
11. Click the Save button to save the changes.

Adding Leaves Allocation

To set up leave allocations for employees, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, choose and click the appropriate Calendar Year record from the list.
3. Choose an Employee
   • On the Compensation & Benefits > Calendar Year (Year) page, select the employee for whom you want to set up leave allocations.
4. Access the Leaves Section
   • Expand the Leaves section on the Compensation & Benefits page.
5. Add Leave Allocation
   • Click the Add button (represented by a + icon) to create a new leave allocation.
   • In the Add Leaves popup window:
     • Select the Leave Type from the dropdown options.
     • Enter the Annual Allocation for the leave type in days.
     • Specify the number of days that can be converted to cash if unused.
     • Set the number of days that can be carried over to the next calendar year if unused.
     • If the leave should be pro-rated monthly, toggle the Pro-rated switch to "on."
     • Add any relevant comments if necessary.
6. Save and Review
   • Click the Save button to create the leave allocation record. The initial status will be set to Created.
   • To mark the record for review, click on the created leave allocation and select the For Review option.
7. Default and Additional Leave Types
   • By default, configure Vacation Leaves and Sick Leaves for all employees.
   • To add other leave types, such as Paternity Leave or Maternity Leave, ensure these leave types are first configured on the Leave Types page.
8. Repeat as Necessary
   • Follow the steps to set up additional leave allocations as needed.

Note: Leave Types must be configured before they can be added to the leaves allocation.

See Leave Types for details.

Editing Leaves Allocation

To edit leave allocations on the Compensation and Benefits page, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, choose and click on the appropriate Calendar Year record from the list.
3. Choose the Employee
   • On the Compensation & Benefits > Calendar Year (Year) page, select the employee whose leave allocation you want to edit.
4. Access the Leaves Section
   • On the Compensation & Benefits page for the selected employee, expand the Leaves section.
5. Locate and Edit the Leave Allocation
   • Find the leave allocation record you want to edit.
   • Click on the record to display the Edit button (pencil icon) and click on it.
6. Update the Leave Details
   • In the Edit Leaves Allocation window, update the necessary details:
     • Leave Type: Modify if needed.
     • Annual Allocation in Days: Adjust the total leave days for the year.
     • Convertible to Cash: Update the number of unused leave days that can be converted to cash.
     • Carryover Days: Set the number of unused leave days that can be carried over to the next year.
     • Pro-rated Allocation: Enable the Pro-rated switch if the leave should be distributed monthly.
     • Add any relevant comments if required.
7. Save the Changes
   • Click the Save button to apply your updates. These steps ensure the leave allocation record is updated accurately for the selected employee.

Adding Deminimis Benefits

De minimis benefits are minimal-value perks exempt from income and withholding tax under Philippine law, such as meal allowances, transportation, and rice subsidies, within BIR-set limits. Excess amounts are taxable unless covered by the ₱90,000 annual exemption threshold for other benefits like 13th-month pay and bonuses.

To add De Minimis Benefits, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu page, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, choose the desired Calendar Year record from the list.
3. Access the De Minimis Benefits Section
   • On the Compensation & Benefits > Calendar Year (Year) page, scroll down to the De Minimis Benefits section.
   • Click the Add button (represented by a + icon) to create a new De Minimis Benefit.
4. Fill Out the De Minimis Benefit Details
   • In the popup window:
     • Select the Benefit Type from the dropdown menu.
     • Enter the Monthly Amount for the benefit.
     • Choose the applicable months in the Pay Out On dropdown.
     • If the cutoff setting is bi-monthly, specify the Payout Schedule as:
       • Every first cutoff,
       • Every second cutoff, or
       • Half per cutoff.
     • Fields for Annual Threshold, Annual Payment, and Threshold Excess will be automatically calculated based on the provided data.
     • Enter any comments if necessary.
5. Save and Review the Benefit
   • Click the Save button to create the De Minimis Benefit record. The initial status will be set to Created.
   • To mark the benefit for review, click on the created De Minimis Benefit record and then select the For Review option.
6. Add Additional Benefits
   • Repeat the above steps to add more De Minimis Benefits as needed.

Editing Deminimis Benefits

To edit Deminimis Benefits on the Compensation and Benefits page, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, choose the appropriate Calendar Year record and click on it.
3. Select the Employee
   • On the Compensation & Benefits > Calendar Year (Year) page, select the employee whose Deminimis Benefits you want to edit.
4. Locate the Deminimis Benefits Section
   • On the Compensation & Benefits page for the selected employee, scroll down to the Deminimis Benefits section.
5. Edit the Deminimis Benefit Record
   • Find the specific Deminimis Benefits record to be updated.
   • Click the Edit button (pencil icon) next to the record.
6. Update Benefit Details
   • In the Edit Deminimis Benefits window, modify the following details as needed:
     • Benefit Type: Select the appropriate option from the dropdown menu.
     • Monthly Amount: Input the updated monthly amount.
     • Payout On: Choose the applicable months.
     • Payout Schedule: If the cutoff settings are bi-monthly, choose the desired schedule (e.g., first cutoff, second cutoff, or half per cutoff).
     • Non-Resident Alien Setting: Toggle the switch for "Non-resident alien not engaged in trade or business within the Philippines" if applicable.
     • Remarks or Comments: Add any relevant remarks or comments.
7. Save the Changes
   • Click the Save button to apply your updates. These steps ensure accurate updates to Deminimis Benefits for the selected employee.

Adding Fringe Benefits

Fringe Benefits are additional perks provided to employees, such as housing allowances, transportation allowances, or meal allowances. To add Fringe Benefits, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, locate and click on the appropriate Calendar Year record.
3. Locate the Fringe Benefits Section
   • On the Compensation & Benefits > Calendar Year (Year) page, scroll down to the Fringe Benefits section.
4. Add a New Fringe Benefit
   • Click on the Add button (+ icon) to create a new Fringe Benefit.
5. Input Benefit Details
   • In the popup window, provide the following details:
     • Benefit Type: Select the appropriate benefit type from the dropdown menu.
     • Monthly Amount: Enter the monthly value of the benefit.
     • Payout On: Choose the applicable months.
     • Payout Schedule: For bi-monthly cutoff settings, choose the schedule (e.g., first cutoff, second cutoff, or half per cutoff).
     • Annual Payment: This field will automatically calculate based on the entered monthly amount.
6. Additional Settings
   • For employees with a Managerial Pay Grade, toggle the switch for Non-resident alien not engaged in trade or business within the Philippines if applicable. This setting is required for generating the BIR 1603 report.
7. Save the Record
   • Click the Save button to create the Fringe Benefit record. The initial status will be set to Created.
8. Add More Fringe Benefits (Optional)
   • Repeat these steps to add additional Fringe Benefits as needed. By following these steps, you can accurately set up Fringe Benefits for employees.

Editing Fringe Benefits

To modify Fringe Benefits in the Compensation and Benefits section, follow these steps:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, find and click on the relevant Calendar Year record.
3. Choose the Employee
   • On the Compensation & Benefits > Calendar Year (Year) page, select the employee whose Fringe Benefits you wish to update.
4. Expand the Fringe Benefits Section
   • On the Compensation & Benefits page for the selected employee, expand the Fringe Benefits section to view the list of benefits.
5. Locate and Edit the Record
   • Identify the Fringe Benefit record you wish to modify and click on it.
   • On the Fringe Benefits Details page, click the Edit button (pencil icon) to make changes.
6. Update Fringe Benefit Details
   • In the Edit Fringe Benefit window, modify the following fields as needed:
     • Benefit Type: Choose the updated type from the dropdown menu.
     • Monthly Amount: Enter the revised monthly benefit amount.
     • Payout Frequency: Choose the applicable months.
     • Payout Schedule: For bi-monthly cutoff settings, choose the preferred schedule (e.g., first cutoff, second cutoff, or half per cutoff).
     • Non-resident alien not engaged in trade or business within the Philippines: For employees with a Managerial Pay Grade, toggle this option if applicable. This setting is required for generating the BIR 1603 report.
7. Finalize Changes
   • Add any relevant remarks or comments, if necessary.
   • Verify all details to ensure accuracy.
8. Save the Updates
   • Click the Save button to apply the changes to the Fringe Benefit record. By following these steps, you can efficiently update Fringe Benefit records for employees while ensuring accurate and complete data.

Adding Other Benefits

Other Benefits include items such as 13th Month Pay or additional employee benefits not categorized as Deminimis or Fringe Benefits.

Steps to Add Other Benefits:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, find and click on the relevant Calendar Year record from the list.
3. Go to the Other Benefits Section
   • Scroll down to the Other Benefits section on the Compensation & Benefits > Calendar Year (Year) page.
4. Add a New Other Benefit
   • Click the Add button (+ icon) to create a new Other Benefit entry.
5. Enter Benefit Details
   • In the popup window, select the Benefit Type from the dropdown menu. Choose either 13th Month Pay or Others.
     • If you select Others, provide a brief description in the Other Benefit Description field.
   • If you select 13th Month Pay, you must also choose the 13th Month Rate as either Pro-rated or Current Salary:
     • Pro-rated: The 13th month will be computed on a pro-rated basis according to the employee's duration of service within the year.
     • Current Salary: The 13th month will be equal to the current salary when the 13th month is given.
   • Enter the Monthly Amount for the benefit:
     • For 13th Month Pay, the amount will be calculated based on the employee's basic salary.
     • For Others, manually input the specific monthly amount.
   • The Annual Payment field will be automatically calculated based on the entered monthly amount and payout frequency.
6. Select the Payout Details
   • Choose the applicable months for payout in the Pay Out On dropdown.
   • If the cutoff settings are bi-monthly, specify the Payout Schedule as either the first cutoff, second cutoff, or half per cutoff.
7. Repeat as Needed
   • Follow the above steps to add additional Other Benefits as necessary. This process ensures that all employee benefits are accurately recorded and properly categorized for payroll management.

Editing Other Benefits

Steps to Edit Other Benefits:

1. Navigate to the Compensation Section
   • Access the left navigation menu and click on Compensation.
   • From the Compensation menu, select the Compensation and Benefits card.
2. Select the Calendar Year
   • On the Compensation and Benefits page, find and click on the relevant Calendar Year record from the list.
3. Go to the Other Benefits Section
   • Scroll down to the Other Benefits section on the Compensation & Benefits > Calendar Year (Year) page.
4. Edit the Existing Other Benefit
   • Locate the Other Benefit record you want to edit and click on it.
   • Click on the Edit icon (pencil icon) to modify the record.
5. Update Benefit Details
   • In the Edit Other Benefit window, modify the following fields as needed:
     • Benefit Type: Choose from the dropdown menu (e.g., 13th Month Pay or Others).
       • If 13th Month Pay is selected, you must choose the 13th Month Rate as either Pro-rated or Current Salary:
         • Pro-rated: The 13th month will be computed on a pro-rated basis according to the employee’s duration of service within the year.
         • Current Salary: The 13th month will match the current salary when the 13th month is given.
       • If Others is selected, update or provide a new description in the Other Benefit Description field.
     • Monthly Amount: Enter the updated monthly amount:
       • For 13th Month Pay, this will be calculated based on the employee’s basic salary.
       • For Others, input the updated specific monthly amount.
   • The Annual Payment field will be automatically updated based on the new monthly amount and payout frequency.
6. Adjust Payout Details
   • Modify the Pay Out On dropdown to specify which months the benefit should be paid out.
   • If the cutoff settings are bi-monthly, select or adjust the Payout Schedule to either the first cutoff, second cutoff, or half per cutoff.
7. Save the Changes
   • Ensure all modifications are accurate and complete.
   • Click the Save button to apply the changes and update the Other Benefit record.

This process ensures that the benefits provided to employees are accurately updated and reflected in payroll records.

Copying Previous Calendar Year's Compensation and Benefits

Compensation and benefits must be set up for each user before the beginning of every calendar year. If there are no changes to the compensation and benefits structure, you have the option to copy the previous year's records.

Note: To utilize the Copy Previous feature, the overall status should be Not Created, as indicated in the menu button on the Compensation & Benefits page for the selected user.

To copy the previous calendar year's compensation and benefits for a selected employee, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Compensation and Benefits card.
3. On the Compensation and Benefits page, locate and select the appropriate Calendar Year record from the list.
4. On the Compensation & Benefits > Calendar Year (Year) page, find and click on the user for whom you want to update. Ensure that the Allocation Status is set to Not Available.
5. On the Compensation & Benefits page for the selected user, click on the menu button, and then select Copy Previous.
6. In the Compensation & Benefits Records popup window, review the available records and select the desired record that you wish to copy.
7. Click on the Copy button to initiate the copying process. Please note that the initial status of the copied record will be set to Created.

Reviewing compensation and benefits

To review Compensation & Benefits records, follow these steps:

Note: The reviewer must have Compensation & Benefits approver rights to perform these actions.

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Compensation and Benefits card.
3. On the Compensation and Benefits page, locate and select the appropriate Calendar Year record from the list.
4. On the Compensation & Benefits > Calendar Year (Year) page, find and click on the user for whom you want to review.
5. To batch approve or reject all records marked as For Review, click on the menu button on the top right corner of the page.
6. From the options that appear, click on Approve All or Reject All to apply the desired action to all For Review records.
7. If you prefer to individually review and approve/reject each record, click on the specific record that you want to review. You will find the Approve and Reject buttons. Click on the appropriate button to approve or reject the record.
8. Repeat step 7 for each record that requires individual review.

Disabling / deactivating Compensation and Benefits

To ensure proper tracking and management of compensation and benefits, all resigned employees' compensation and benefits records must be deactivated.

To disable or deactivate the Compensation & Benefits for a resigned employee, follow these steps:

1. Access the left navigation menu and click on Compensation.
2. From the Compensation menu page, select the Compensation and Benefits card.
3. On the Compensation and Benefits page, locate the record of the resigned employee whose Compensation & Benefits you want to disable.
4. Click on the menu button (three dots) next to the employee's record.
5. From the options that appear, click on Disable to initiate the deactivation process.
6. The status of the record will be set to For Deactivation Approval.
7. An approver with the appropriate rights needs to review and approve the deactivation request.
8. The approver can access the Compensation & Benefits page, locate the record, and review the request.
9. Upon approval from the approver, the employee's Compensation & Benefits will be fully disabled.