In certain salary model templates in Netvisor, the calculation of the average hourly earnings is pre-built. The salary types included in the average hourly earnings calculation and their formulas can be checked from the salary model's salary type formulas. The formulas for salary types are freely editable if the content of the calculation formula is not desired.

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Calculation options for average hourly earnings

The average hourly earnings calculation can be implemented for the following periods:

  • quarter
  • half-year (=two quarters)
  • calendar year / previous calendar year
  • holiday credit year / previous holiday credit year
  • continuously always from the pay period preceding the calculation

The quarterly average hourly earnings calculation can be directly copied, for example, from the "Technology Industry, Hourly Pay" salary model template. The ready-made salary model template can be directly copied onto an existing salary model with certain restrictions. If payroll has already been started before the salary model with average hourly earnings calculation is brought on top of it, it must be ensured that the salary information needed for the average hourly earnings calculation is available to the program. If all the information needed for the calculation is not available to the program, salary information can be provided to support the calculation using salary history data.  

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Implementing average hourly earnings calculation

In this help guide example, the implementation of average hourly earnings calculation is carried out continuously, i.e., always from the pay period preceding the calculation. The guide can be applied to the average hourly earnings calculation for any period by considering only the different period selection at different stages of the guide.

To start the average hourly earnings calculation, a new salary type is created that performs the average hourly earnings calculation.

Payroll > Payroll > Salary model management > select the "formulas" button on the right side of the desired salary model row.

In the upper right corner of the view, there is a link "Add a new salary type and attach to the salary model".

Company-specific basic information for the salary type is given as shown in the image.

Remove the setting "Add this salary type to the Salary in money formula" from the salary type before saving.

Building the calculation formula for average hourly earnings

In the previous step, a new salary type was created. After saving the salary type, the Salary type formula -heading appears at the bottom of the view:

The desired average hourly earnings calculation formula is built here. The formula construction in Netvisor follows mathematical rules, so the use of parentheses and the order of operations must be considered when building the formula.

In this help guide example, the average hourly earnings calculation is simplified so that the average hourly earnings are obtained by dividing the row sums of the "Time work earnings" salary type, "Evening allowance" salary type, and "Sunday allowance" salary type from the previous pay period by the hours worked in the previous pay period.

NOTE! The formula includes all the factors affecting the average hourly earnings calculation according to the collective agreement on a case-by-case basis.

You can get a new formula row from the green plus sign at the bottom of the page.

First, the calculation formula is built inside parentheses from the euro amounts of the desired salary types, i.e., "Row sums".

  • "Calculation operation" means the mathematical operation sign
  • "Value of the salary type in the time period" means the time period from which the values of the selected salary type are used
  • "Salary type" means the salary type whose earnings are to be included in the calculation formula
NOTE! When you want to calculate earnings from hourly pay, the salary type named "Time work earnings" must be attached to the formula, NOT the "Hourly pay" salary type. Hourly pay means the unit price of the current hourly pay, not the actual time work earnings paid during the pay period.
  • "Source of values" is selected as "row sum", which refers to the euro amount of the salary type ("quantity" would refer to the number of hours)
  • "Period start and period end" define the period from which the calculation is performed (in this example, a continuous average hourly earnings always from the previous pay period) 
  • "Calculation day" indicates according to which time measure the calculation follows the given start-end date range

When all the necessary salary types are listed, the calculation formula is closed with a parenthesis and the formula is saved. If necessary, you can edit the rows from the pencil/notepad icon on the right side of the rows.

When the euro amounts of the salary types are listed in the formula, a "calculation operation" and a division sign (/) are added in between. Then, the calculation formula for the hour amounts of the salary types that act as divisors in the average hourly earnings calculation is listed inside parentheses. Remember to select "quantity" as the source of values. 

When all the necessary salary types are listed, the parenthesis is closed and the formula is saved.

In this example, the finished average hourly earnings formula looks like this (image below):

Comparison condition in average hourly earnings calculation

The unit price produced by the average hourly earnings calculation can be automatically compared to another valid unit price (e.g., hourly pay or table pay) and use the higher value in payroll without separate manual actions. A separate salary type is created for this comparison function.

Payroll > Payroll > Salary model management > Select the formulas button (pencil) on the right side of the desired salary model row

In the upper right corner of the view, there is a link "Add a new salary type and attach to the salary model".

Company-specific basic information for the salary type is given as shown in the image.

After saving, the "Salary type formula" heading appears at the bottom of the view. The desired conditional statement is built here. The formula construction in Netvisor follows mathematical rules, so when creating the conditional statement, the values to be compared are given, as well as the action if the statement is true and the action if the statement is false.

You can add a new row from the green plus sign. Select "conditional statement" from the dropdown menu. Give the row comparison values whose magnitude is compared to each other. In the first box, select the desired unit price to be compared (for example, hourly pay or table pay) and in the second box, the average hourly earnings calculation salary type. Value if condition true/false boxes are given the salary types to be used based on the fulfillment of the conditional statement.

In the example, it is desired to compare hourly pay to average hourly earnings and use the higher value of them. Then the formed conditional statement looks like this (image below):

If the comparison condition for average hourly earnings calculation is in use, then there are two salary types related to average hourly earnings calculation on the salary model. 

In the example, those salary types are named "Average hourly earnings (prev. pay period)" and "Average hourly earnings Condition".

Average hourly earnings (prev. pay period) is a salary type that performs the average hourly earnings calculation according to the given formulas.

Average hourly earnings Condition is a salary type that performs the comparison between average hourly earnings and hourly pay and directs the program to use the higher of those unit prices in payroll.

When the record type formula is added with the unit price as average hourly earnings, the selection is made based on whether the comparison condition is in use or not. If there are two separate salary types for average hourly earnings calculation, calculating and comparing, the record type formula must use the comparison condition salary type, i.e., in our example, the Average hourly earnings Condition salary type.

Using average hourly earnings in payroll

The newly created average hourly earnings calculation salary type calculates the average hourly earnings according to the given criteria automatically in the background of payroll.

Separate calculation runs do not need to be performed for average hourly earnings.

Reporting and checking average hourly earnings by person can be done using the separate guide found in the link.

To ensure the program uses average hourly earnings in payroll, a reference to the average hourly earnings calculation salary type must be added to the record type formula using average hourly earnings.

NOTE! If the comparison condition for average hourly earnings is in use, the record type formula must use the average hourly earnings conditional statement salary type, not the salary type calculating average hourly earnings, to ensure the comparison condition is valid when using the record type. 

You can view the record types of the salary model as follows:

Payroll > Payroll > Salary model management > Select the formulas button on the right side of the desired salary model row.

At the bottom of the view, you can see the record types in use for the salary model.

You can edit the hourly price used by the record type from the "Edit" button on the right side of the row.

In the opened view, there are salary model-specific formulas showing all the salary models where the record type is in use. Select the edit icon (pencil and notepad) on the right side of the correct salary model row. Select the salary type to be used as the unit price for the hour from the dropdown menu in the "salary type coefficient" column.

Save the change.

Currently valid average hourly earnings

If continuous average hourly earnings calculation is used, i.e., average hourly earnings are always calculated from the earnings of the previous pay period, then the average hourly earnings information does not need to be updated for the record type. If average hourly earnings change at certain intervals (e.g., quarterly), then whenever a new average hourly earnings comes into effect, the currently valid average hourly earnings salary type must be updated for the record types.

NOTE! The update must be done before creating payroll calculations.

Example of updating quarterly calculated average hourly earnings information for use in the record type:

Payroll > Payroll > Salary model management > Select the "formulas" button on the right side of the correct salary model row.

At the bottom of the page, you can see the record types in use for the salary model. You can see at a glance which unit price is in use for each record type and you can also directly edit the unit price used by the record type.

On the right side of the record type, there is an edit icon (pencil and notepad) from which you can edit the record type.

In the opened view, there are salary model-specific formulas showing all the salary models where the record type is in use. Select the edit icon (pencil and notepad) on the right side of the correct salary model row.

Select the correct average hourly earnings salary type from the dropdown menu in the "salary type coefficient" column.

NOTE! If the comparison condition is used in average hourly earnings calculation, the record type must use the "Average hourly earnings Condition" salary type in the calculation formula. The Average hourly earnings calculation salary type calculates average hourly earnings for each quarter, attaching it to the calculation formula skips the comparison condition.

Save the changes.

Valid average hourly earnings

Certain salary model templates in Netvisor (e.g., Technology Industry, Hourly Pay) have a ready-made salary type "Valid average hourly earnings", to which the average hourly earnings salary type can be updated at once. When the record type formulas have "Valid average hourly earnings" selected as the salary type coefficient, it is not necessary to update all record types separately, but it is sufficient to update the formula in the salary type formulas.

At the end of the salary model formula list, the record type formulas are visible, where the salary type coefficient in use for the record types can be checked.

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


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