This article explains the different pay rate types you can use in pay rate rules, and how to apply top-up rates when you need to adjust an existing pay rate without changing the original rule.
Understand Pay Rate Types and Top-Up Rates
Rate Types Overview
A pay rate rule must include one or more rate types. The rate type controls how the system calculates the pay rate for the pay code selected in the pay rate rule.
If you want multiple rate types to apply to the same pay rate rule, you must add conditional variable conditions to each rate type. These conditions define exactly when each rate type applies (for example, specific timesheet values, dates, or other rule conditions).
📌 Note: If you do not define conditional variable conditions for multiple rate types, the system cannot determine which rate type should apply in each scenario.
The following rate types are available:
Flat rate.
Calculation.
Direct valuation.
Payee rate.
Each type is described below.
Flat Rate
Use the Flat rate type when you want to define a fixed monetary rate.
The rate is a straight value, such as $25.00.
The system always applies this exact rate when the rule matches.
Calculation
Use the Calculation rate type when you want to base a new pay or bill rate on the existing rate of another pay code.
The new rate is calculated from the existing pay or bill rate by performing one of the following actions:
Add a value to the existing rate.
Subtract a value from the existing rate.
Multiply the existing rate by a value.
Divide the existing rate by a value.
Apply a value as a percentage of the existing rate.
This allows you to create related rates (for example, penalty rates or allowances) that automatically update if the underlying pay code rate changes.
Direct Valuation
Use the Direct valuation rate type when the rate is entered manually on the timesheet and should be used directly as the pay rate.
A user keys a value directly into the timesheet.
The system uses that keyed value as the applicable rate for the pay code.
This is typically used for pay codes that correspond to manual items.
For example, if a pay code allows payees to claim reimbursement for taxi fares, the reimbursement amount depends on the actual out-of-pocket expense. The pay rate for that pay code is therefore taken directly from the value entered into the timesheet.
Payee Rate
Use the Payee rate type when you want to use the payee’s own hourly rate as the pay rate.
The system takes the hourly rate specified on the Payee record in the Pay module.
That rate becomes the pay rate for the pay code when the rule applies.
Understand Top-Up Rates
When to Use Top-Up Rates
Once timesheets are processed against a pay agreement, you cannot modify the rate defined by existing pay rate rules for that agreement. If you need to adjust the applicable rate for a pay code after this point, you can create a new pay rate rule that applies a top-up rate to the original rate.
Key behaviour:
A top-up rate rule adjusts the original rate defined by an existing rate rule for the same pay code.
The original rate becomes the base rate once a top-up rate is applied.
Unlike standard rate rules:
Top-up rate rules can be created at the same agreement hierarchy level and with the same value as an existing rate rule with the same pay code.
They can have a validity period that overlaps with the existing rate rule.
How Top-Up Operations Work
When you flag a rate rule as a top-up rate, the rate value in the rule is not used directly as the final rate. Instead, the system treats it as an adjustment to the base rate and performs one of the following operations:
Add the value to the base rate.
Subtract the value from the base rate.
Multiply the base rate by the value.
Divide the base rate by the value.
Apply the value as a percentage of the base rate.
The Rates and Rules engine applies the value to the base rate to calculate the new rate.
Example top-up rule:
Pay Code | Top-Up Operation | Rate Type | Rate |
X | Plus | Flat rate | 2.50 |
If the base rate for pay code X is $20.00, the new rate after applying the top-up is:
New rate = 20.00 + 2.50 = $22.50.
Interaction with Other Calculations
Top-up rates are applied before the base rate is used in any further calculations.
Example:
Base rate: $20.00.
Top-up rate: +$2.50 (flat rate).
Overtime allowance: 1.5 × base rate.
Calculation:
Apply the top-up to the base rate: 20.00 + 2.50 = 22.50.
Apply the overtime multiplier: 22.50 × 1.5 = $33.75 per hour of overtime.
So in this case, the rate of pay for each hour of overtime worked is $33.75.
Agreement Hierarchy and Cumulative Top-Ups
Top-up rates are applied cumulatively from the top of the agreement hierarchy down.
For example:
A top-up rate exists for a pay code at the Country level.
Another top-up rate exists for the same pay code at the Client level.
If there is a match at both hierarchy levels:
The system applies the Country-level top-up first.
It then applies the Client-level top-up on top of that.
This means multiple top-up rates can stack on the same base rate, depending on which agreement hierarchy levels apply to the payee and pay code.