How to Process Piece Rates


Watch our video instructions.

Crystal Payroll can efficiently handle piece-rate workers to meet the needs of your business. This guide contains instructions on how to both set up and process the employees on piece rate. There is also a short explanation on how we calculate Paid 10 Minute Breaks.

  1. Set Up Piece Rates
  2. Process Piece Rates
  3. How We Calculate Paid 10 Minute Breaks

Note: If you are importing from Hectre, this guide does not apply to you. Follow the integration instructions instead: Integration with Hectre.

How to Set Up Piece Rates

Head to "Company Settings", "Payroll Settings". Open "Advanced Settings", and check the "Job Pay Rate" box under "Timesheet Input Format & Preference".

Picture
Under "Other Settings" down the bottom of the page, also enable "Auto Top Up To Meet the Contract Rate". If you would rather wages only be topped-up to minimum wage, then use that option instead. Select "Save."
Picture
Navigate to "Employee Settings", "Employee Details", select a piece-rate worker from the left-hand side, and select "Wage / Salary" under "Other Details". Set the employee’s hourly rate to the employee's contract rate if they have one, otherwise you can set it to the minimum wage.
Picture
Select "Job Pay Rate" under "Other Details". Select "Add" and enter "Top Up", set the "Pay Rate" to "0", and then select "Save".
Picture
Navigate to "Process a Pay", "Time & Income", and select "Other Income". Open "Setup Income Items", and then select "more…".

This menu is where you set up your piece-rate items. Select "Add", and then enter the item’s name in the description field and select "Save". Once you are finished, close all menus so that you are back at the "Time & Income" page.

Select "Allowance", which is just to the right of "Other Income". Select "Set Up Items" on the right-hand side of the menu. Select "Paid Break – 10 mins per unit" from the left-hand side, and then select the arrow pointing over toward the right-hand side box. Close both these menus so that you are back at "Time & Income" again.

Navigate to "Process a Pay", "Leave Pay Rate". Select a piece-rate worker from the left-hand side. Ensure "Use Average Daily Pay to calculate a pay" on the left-hand side is enabled, as well as "Use Default Hourly Rate for Annual Leave Pay" on the right-hand side.
Your employees are now set up to use piece rates. Please follow the next part of the guide to learn how to process them.

How to Process Piece Rates

If the employee was working on a piece-rate for this day, then enter the date worked as "Top Up". Enter their hours worked, and then select "Save".

If the employee was working on wages for this day, then enter the date worked as "Normal Working", which is the default option. Enter their hours worked, and then select "Save".

Select "Other Income" under "More Income & Deductions". Select "Add". Select your piece rate item from the "Item" dropdown menu. Enter the "Quantity", and then enter the rate into the "Pay Rate" field. You can also select the blue "S" button next to the pay rate to save the payment amount for future use. Select "Save".

Close this menu. Select "Allowance", which is just next to "Other Income". Select "Add", and enter "Paid Break – 10 mins per unit" as the item. Leave the "Pay Rate" at "$1", and set the "Quantity" to however many paid breaks the employee took. Select "Save", and then close this menu. Approve the employee when you are ready.

As shown above, the employee’s gross earnings of piece rate for working four days 32 hours is $220.00 before tax. The system picks up that this is under the employees' contract rate, and so it automatically tops up the amount by giving a pay rate of $12.93/hr for each piece rate day. The paid break is also automatically calculated to match the rest of the employee’s pay.


How We Calculate Paid 10 Minute Breaks

Crystal Payroll calculates Paid 10 Minute Breaks by working out the employee's total income from piece rate items over the hours they worked, to work out the employee's hourly rate, which is then multiplied by the hourly quantity the employee took as a paid break. You can check over our calculations by following the below method.

  1. Six ten minute breaks is equal to an hour. Take the total number of paid breaks the employee receives, and divide it by 6 to convert the figure into an hour equivalent. If the employee had five ten minute breaks, then the calculation would be 5 / 6 = 0.83 (2 D.P.).

  2. Take the employees' gross earnings from their piece rate items, and divide them by the hours they worked while on their piece rate. If the employee earned $925 and worked 36 hours, then the calculation would be 925 / 36 = 25.69 (2 D.P.).

  3. Multiply the figures you worked out together to complete the calculation. In the above example, 25.69 x 0.83 = $21.32 (D.P.). Therefore the employee will receive $21.32 (D.P.) for their Paid 10 Minute Breaks. The difference between the amount and the amount below, is that this equation was rounded to two decimal points. The amount below would be the correct figure.