Payroll Time Setup 0 0

What Payroll Time Setup Does

Payroll Time Setup controls company-level payroll calculation rules. These settings affect working hours, holiday pay, overtime behavior, payroll cutoffs, default payment frequency, payslip format, split payment settings, and some country-specific contribution rules.

This is one of the most important payroll setup areas because it can affect every payroll run.

When To Use Payroll Time Setup

Use Payroll Time Setup when:

• A company is being set up for payroll for the first time.
• Regular working hours need to be defined.
• Holiday pay rules need to be adjusted.
• Payroll cutoff rules need to be enforced.
• Payslip format needs to change.
• Split payment should be enabled for Make Payment V2.
• Country-specific contribution limits or rules need to be configured.

Key Settings To Understand

Regular Working Hours

These values define standard work time for payroll calculations. They may affect salary proration, hourly calculations, and overtime review.

Payroll Cutoff

The cutoff determines when payroll data should stop changing for a period. This helps prevent late edits from changing payroll after review.

Holiday Pay Rules

Holiday settings control whether full holiday pay is included and how holiday work is treated.

Payslip Format

Payslip format can control whether payslips show default period earnings or year-to-date information.

Split Payment

Split Payment is used by Make Payment V2 when a company wants to pay an advance portion mid-month and the final portion later.

Practical Example: Hourly Worker Holiday Pay

An hourly worker is not scheduled to work on a public holiday. The company does not want the employee to receive full holiday pay unless they were scheduled or worked.

Payroll Time Setup should be reviewed to confirm whether full holiday pay is excluded based on hours.

If the setting is enabled, payroll can avoid paying a full holiday day where the employee was not eligible.

Practical Example: Payroll Cutoff

A company processes payroll every two weeks. Payroll is reviewed on Monday and paid on Wednesday.

The company can use payroll cutoff settings so timesheet or payroll item changes after Monday do not unexpectedly change the payroll run.

Practical Example: Split Payment

A company pays monthly employees in two parts:

• 40% advance on the 15th
• Final payment at month end

Payroll Time Setup should define the split payment percentages and pay days. In this model, the advance is normally paid without deductions, and deductions are applied to the final payment.

Common Mistakes

• Changing Payroll Time Setup during an active payroll run without reviewing the impact.
• Enabling split payment without explaining the change to payroll users.
• Forgetting that holiday pay settings can affect hourly employees.
• Confusing payroll cutoff with payroll lock. Cutoff controls timing rules; lock protects completed periods.

Related Articles

• Payment Frequency
• Additional Payment Frequency Setup
• Split Payments In Make Payment V2
• Payroll Lock And Unlock
• Holiday Hours To Payroll