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Paycheck Configuration Guide: Pay Rates, Contracts & Paychecks

 

 

This guide walks you through the initial configuration of pay rates, contracts, and paychecks for your personnel. Follow these steps to fully test the functionality and ensure smooth payroll operations.

🔐 Required Permissions

Before you begin configuring payroll, ensure that users have the appropriate permissions assigned to their role. The payroll system uses two distinct permission categories.

Pay Rates Permissions

Pay rates are company-wide settings. Users need these permissions in the Company Settings section.

Permission What it allows
Access View the Company Settings menu and navigate to pay rate settings
Read View existing pay rates and their configurations
Create Create new pay rates and configure rate rules and overtime
Update Modify existing pay rates, rate rules, and overtime settings
Delete Delete pay rates (except default rates)

📍 Location in UI: Account Settings → Personnel → Pay Rates

Contracts & Paychecks Permissions

Contracts and paychecks are managed per employee. Users need these permissions in the Personnel section.

Permission What it allows
Access Personnel Contracts View the "Contracts & Paychecks" tab in employee profiles
Read Personnel Contracts View existing contracts and paycheck history
Create Personnel Contracts Create new contracts and generate paychecks
Update Personnel Contracts Modify existing contracts, rates, and compensations
Delete Personnel Contracts Remove contracts and paychecks
Manage Personnel Contracts Full management access (includes all of the above)

📍 Location in UI: Resources → Personnel → [Employee] → Contracts and Paychecks tab

How to Assign Permissions

  1. Go to Account Settings → Permissions

  2. Select the role you want to modify

  3. In the Permission Matrix:

    • Find the "Company Settings" row and check the boxes for Access, Read, Create, Update, Delete as needed

    • Find the "Personnel" row and check the boxes for Access Personnel Contracts, Read, Create, Update, Delete, Manage as needed

⚠️ Important Notes:

  • The "Contracts & Paychecks" tab only appears if the user has "Access Personnel Contracts" permission

  • Default pay rates cannot be deleted even with "Delete" permission

  • Employees can view their own paychecks without special permissions

  • "Manage" permission grants full control over personnel contracts

Recommended Permission Setup by Role

Role Company Settings Personnel Contracts
Payroll Administrator Access, Read, Create, Update, Delete Access, Read, Create, Update, Delete, Manage
HR Manager Access, Read, Create, Update Access, Read, Create, Update
Finance Reviewer Access, Read Access, Read
Department Manager — Access, Read
Employee — —

💡 Tip: In the Permission Matrix, roles are listed as rows with adjustable ranks (use up/down arrows). Permissions are organised into sections like "Company Settings" and "Personnel" with checkboxes for each permission level.

1. Configure Pay Rates

Before you can generate paychecks, you need to define how your personnel are paid.

Steps to Create a Pay Rate

  1. Go to Account Settings → Personnel → Pay Rates

  2. Click Add new in the top-right corner

  3. In the modal that appears, fill in the required fields:

Settings

Field Description
Name The identifier for the rate
Currency Select the currency this rate uses
Is Default Enable if this should be applied automatically when no other rate matches. Default rates ignore activity categories

Associations

Field Description
Activity Categories One or more activity types this rate applies to. Only hours logged under these categories will use the rate. You can assign multiple categories to a single rate
Country The country this rate applies to. Hours logged under other countries will not use this rate
Work Packages (Optional) Assign specific work packages for this rate

Required Permission: Create (in Company Settings section)

Rate Rules

Rate rules define how a rate is applied across different times of day, days of the week, or with fixed vs. percentage-based amounts. Each pay rate can have multiple rules.

Each rule includes:

Field Description
Name A label for the rule (e.g., "Standard Day", "Night Shift")
Hourly Rate Amount paid per hour during that period. Disabled if Percentage Rate is enabled
Percentage Rate (toggle) Enable to define the rate as a percentage of another rule's hourly rate, rather than a fixed amount. See below
Period – All Day (toggle) Enable to cover the full day (00:00–23:59) without manually entering start/end times
Period – Start / End Time When All Day is off, set the specific time window the rule covers (e.g., 08:00–16:00)
Days of Week Select which days this rule applies to. If no days are selected, the rule applies to all days of the week
Maximum Hours per Day Caps paid hours per day. Any time logged beyond this cap will cascade to an overtime rate (if configured) or be left unassigned
Maximum Hours per Week Caps paid hours per week. Same cascading behaviour as above

Percentage Rate option

When the Percentage Rate toggle is enabled on a rule:

  • Enter a Percentage (%) value (e.g., 150 for time-and-a-half)

  • Select a Base Rate — any existing fixed-rate rule from within any pay rate in your system

  • The system automatically calculates the effective hourly rate as: (percentage / 100) × base rule's hourly rate

  • The calculated hourly rate is shown read-only and updates whenever the base rule changes

  • A percentage rule cannot itself be used as the base rate for another percentage rule

💡 Tip: You can create multiple rules within a single rate to cover different time windows or day types — for example, a weekday rule and a separate weekend rule, or a day-shift rule and a night-shift rule at a higher percentage.

⚠️ Overlap Validation: The system prevents saving two rules that cover the same time window on the same days of the week. If an overlap is detected, you will see a validation error and will need to adjust the conflicting rules before saving.

2. Configure Overtime Rules

Overtime rules allow you to automatically apply different pay rates when maximum hours are exceeded. This feature uses rate linking to cascade from one pay rate to another.

Required Permission: Create and Update (in Company Settings section)

How Overtime Rules Work

When a pay rate's maximum hours (per day or week) are reached:

  • The system automatically switches to the linked overtime rate for any excess hours

  • Overtime rates can themselves be linked to further overtime rates, creating multiple tiers (e.g., Standard → Overtime 1.5x → Double-time 2x)

  • The system validates against infinite loops to prevent circular rate references

Setting Up Overtime Rules

  1. When creating or editing a pay rate, scroll to the Overtime Rule section

  2. Toggle Enable Overtime Rules to "Enabled"

  3. Select an Overtime Rate from the dropdown

    • This dropdown shows all other pay rates in your system

    • The current rate being edited is automatically excluded to prevent self-reference

  4. Click Save

Important Notes About Overtime Linking

⚠️ Infinite Loop Protection:

  • The system automatically validates that your overtime rule does not create a circular reference

  • Example of invalid setup: Rate A → Rate B → Rate A (creates an infinite loop)

  • If detected, you will see an error: "Infinite loop detected in overtime rules"

  • This validation requires Read permission in Company Settings

✅ Valid Multi-Tier Example:

Standard Rate (40 hrs/week max)
  ↓ (when exceeded)
Overtime 1.5x (10 hrs/week max)
  ↓ (when exceeded)
Double-time 2x (no max)

Overtime Calculation Behaviour

When a rate rule's Maximum Hours per Day or Maximum Hours per Week cap is reached, the system:

  1. Looks for the linked Overtime Rule on the current pay rate

  2. Applies that overtime rate's rules for excess hours

  3. Recursively follows any additional overtime rules if those caps are also exceeded

  4. Treats any remaining hours as unpaid if no applicable overtime rate exists

The system also respects time-of-day and days-of-week rules within overtime rates. For example, if your overtime rate has a dedicated night-shift rule, those hours are handled separately from daytime overtime hours.

3. Configure Contracts

Contracts define which rates and compensation rules apply to each person.

Required Permission: Create Personnel Contracts (in Personnel section)

Steps to Create a Contract

  1. Go to Resources → Personnel → Edit a Person

  2. Select the Contracts and Paychecks tab (top right)

    • This tab only appears if you have "Access Personnel Contracts" permission

  3. Click Create Contract

  4. Fill in the contract details:

Field Description
Rates Select from previously created pay rates. Any overtime rules linked to those rates are automatically included
Default Rate Optional. Overrides the globally configured default rate for this person's contract
Compensations Optional. Helps automate paycheck additions such as bonuses or per diems

Notes:

  • The contract's country is independent of the rates' countries — you can mix them for multi-country billing scenarios

  • If a contract has its own default rate, it will always override the global default rate

  • You can create multiple contracts per person (e.g., one per country) for flexible payroll configuration

  • Overtime rules are automatically included when you add a rate to a contract — the system follows all linked overtime rates during paycheck calculation

4. Create a Paycheck

Once rates and contracts are set up, you can generate paychecks for individuals.

Required Permission: Create Personnel Contracts (in Personnel section)

Steps to Create a Paycheck

  1. Go to Resources → Personnel → Edit a Person

  2. Select the Contracts and Paychecks tab

  3. Click Create Paycheck

  4. Fill in the details:

Field Description
Date Range Only time entries within this period are included
Contract Select the applicable contract. Rates and compensation info are snapshotted at the time of generation
Use Fallback Rate Apply the contract's default rate (or global default) if no other rate matches a time entry
Applied Rate Review and adjust which rate is applied per time entry if needed

How Overtime is Applied in Paychecks

When generating a paycheck:

  1. The calculation engine processes time entries minute by minute

  2. It tracks daily and weekly hour caps for each rate rule

  3. When caps are exceeded, it automatically switches to the linked overtime rate

  4. All cascading overtime rules are resolved recursively until no more linked rates exist or hours are classified as unpaid

You can see the full rate breakdown in the paycheck details, showing exactly which hours were paid at which rate.

Additions & Deductions

You can manually adjust paycheck totals:

  • Positive Amount → Adds to the paycheck

  • Negative Amount → Deducts from the paycheck

These adjustments appear as separate lines in the exported file.

Recalculation

Whenever you modify rates, additions, or deductions:

  • Click Recalculate to refresh totals

  • You can make multiple edits before recalculating — this is recommended for efficiency

  • Recalculation re-applies all rate rules, days-of-week constraints, overtime rules, and percentage rate calculations based on current configurations

5. Download a Paycheck

To review or share a paycheck:

Required Permission: Read Personnel Contracts (in Personnel section)

  1. Go to Resources → Personnel → Edit a Person → Contracts and Paychecks

  2. Click the Download icon beside the desired paycheck

This exports a full .XLSX file, including:

  • All time entries with their applied rates

  • Overtime hours and their corresponding rates

  • Rate breakdowns (including cascaded overtime rates and percentage-based rates)

  • Currency breakdowns

  • Additions and deductions

✅ Summary

Step Purpose Required Permission Section Required Permission
Pay Rate Configuration Define hourly rates, currencies, rules (including all-day, days-of-week, percentage rates), and overtime linking Company Settings Create, Update
Overtime Rules Setup Configure cascading overtime rates with automatic cap-based switching Company Settings Create, Update
Contract Setup Assign rates (with overtime rules) and default pay rules to personnel Personnel Create Personnel Contracts, Update Personnel Contracts
Paycheck Creation Generate pay based on contracts, logged time, and automatic overtime calculations Personnel Create Personnel Contracts
Export Paycheck Download detailed payroll data for review or reporting Personnel Read Personnel Contracts

💡 Best Practices

Recommended Setup for Standard Overtime

1. Create a base rate (e.g., "Standard Pay - Norway")

  • Set max hours per week: 40

  • Link to an overtime rate

  • Permission needed: Create in Company Settings

2. Create an overtime rate (e.g., "Overtime 1.5x - Norway")

  • Enable Percentage Rate on the rule and set it to 150%, selecting the base rate's rule as the base

  • Or set a fixed hourly rate equal to 1.5× your base rate

  • Optionally set max hours per week: 8

  • Link to a double-time rate if needed

  • Permission needed: Create in Company Settings

3. Create a double-time rate (e.g., "Double Pay - Norway")

  • Enable Percentage Rate and set it to 200%, or use a fixed rate at 2× base

  • Do not set a maximum (or set a very high max)

  • Do not link to another overtime rate — this is the final tier

  • Permission needed: Create in Company Settings

Using Days of Week to Handle Weekend Rates

If weekend hours are paid differently:

  1. Create a single pay rate with two rules:

    • Rule 1 – "Weekday": select Mon–Fri in Days of Week, set your standard hourly rate

    • Rule 2 – "Weekend": select Sat–Sun in Days of Week, set your weekend hourly rate (or use a percentage rule based on the weekday rule)

  2. Leave Days of Week empty on a rule only when it should apply to all days

Testing Your Configuration

  1. Create test time entries that exceed your defined caps and span multiple days of the week

  2. Generate a paycheck and verify that the correct rules (including day-of-week filtering and percentage rates) are applied

  3. Check the exported XLSX file to see the detailed rate breakdown

  4. Adjust caps and recalculate to fine-tune your setup

Note: You need Create Personnel Contracts permission to test paycheck generation.

🔒 Security & Access Notes

  • Permission Separation: Company settings (pay rates) and personnel data (contracts/paychecks) use different permission categories

  • Default Rate Protection: Default pay rates cannot be deleted, even with Delete permission in Company Settings

  • Audit Trail: All modifications to pay rates and contracts are logged in the system audit log (requires Access permission for Audit Log to view)