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Salary Calculations

SimplePay performs salary calculations automatically in line with the standard BCEA rules set out below when you enter the relevant hours for your employees. More information on capturing employee hours can be found in the following sections:

You can configure the system to calculate these amounts differently, in line with the alternatives in the BCEA or if, for example, the regulations governing your industry differ entirely – this is discussed in detail in the following article:

Normal Overtime

All hours worked in excess of an employee’s normal hours of work will be regarded as overtime hours. Therefore, if an employee is contracted to work 45 hours per week normal time, then any hours in excess of that is overtime worked. Similarly, if an employee is contracted to work 40 hours per week normal time, then any hours in excess of the 40 hours is overtime worked.

Where an employee is required to work overtime, except for Sundays and public holidays, they are entitled to be paid for these additional hours at 1.5 times their normal hourly rate. This is the calculation used on SimplePay.

This may be varied by an agreement between the employer and employee in which the employer agrees to grant the employee paid time off in lieu of overtime pay. Such an agreement is only valid for one year. More details can be found on the Department of Labour’s website.

Sundays

Employees who do not ordinarily work on Sundays should be paid at least double their ordinary hourly rate.

Employees who do usually work on Sundays should be paid 1.5 times their ordinary hourly rate – if the employee does not work a full shift, they must be paid a normal day’s wage.

Overtime on Sundays must be paid at double the employee’s ordinary hourly rate.

Public Holidays

Where the public holiday falls on an employee’s regular working day, the amount they should be paid will depend on whether or not they work:

  • If they do work, they must be paid the greater of double their daily wage or their daily wage plus the amount actually earned that day. SimplePay calculates public holiday pay as double time by default, but you can change this as described in the article on Basic Pay Settings, linked above.

Please note: In the case of a public holiday falling on a Sunday and being observed on a Monday, and an employee working on both the Sunday and the Monday, the hours worked for both days will be treated as public holiday hours worked.

  • If they do not work, they should be paid at least their ordinary wage. SimplePay does this automatically, but you can disable this if your company/industry is subject to different rules.

Please note: In the case of a public holiday falling on a Sunday and being observed on a Monday, and an employee ordinarily working on both days (as per their Regular Hours), the system will automatically pay the ordinary wage for both days.

If an employee works on a public holiday, which falls on a day on which they would not ordinarily work, they should be paid their daily wage plus the amount earned for that day’s work.

If a shift falls over a public holiday and another day, the whole shift is deemed to have been worked on the public holiday, unless the greater portion falls on the other day.

For more information on other salary-related calculations performed by the system, please see the Payroll Concepts FAQ section.