How to process Piece Rates

Crystal Payroll can efficiently handle piece-rate workers to meet the needs of your business. Note that if you are using other software such as Hectre, there may be very different instructions, so in those instances, we recommend you give us a call for support instead! This guide contains instructions on how to both set up and process the employees on piece rate. There is also a short tutorial 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

How to Set Up Piece Rates

Head to "Company Settings", "Payroll Settings", "Advanced Settings", and check the "Job Pay Rate" box under "Timesheet Input Format & Preference". Under "Other Settings", also check "Switch To Use Employee Job Pay Rate", "Auto Top-Up Pay Rate To Meet The Minimum Wage", and "Auto Top-Up Pay Rate to Meet The Contract Rate", if applicable.

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Return to home. 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 "0".
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The following two steps only need to be completed if employees are not only getting paid piece rate but also wages as well. Select "Job Pay Rate", "Add" and enter "Wages" as their "Job Type" or any other preferable names. Enter their hourly rate, then select "Save". Select "Add" again, this time call the "Job Type" a name such as "Top Up", and set the "Pay Rate" to "0", then "Save".
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Return to home. 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.

In the instance that you pay an employee more for paid breaks that they could not take, select "Allowance", which is just to the right of "Other Income". Select "Setup Allowance Items", then select "Paid Break – 10 mins per unit" from the left-hand side, 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.

Return home. Navigate to "Process a Pay", "Leave Pay Rate". Select a piece-rate worker from the left-hand side. Enter their "Default Hourly Rate" on the right-hand side as either the minimum wage or their wages rate, then select "Save". Ensure that "Use Default Hourly Rate for Annual Leave Pay" is also checked. On the bottom-left, also enable "Use Average Daily Pay to calculate a pay".
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 either "Normal Working" or "Top Up", depending on whether or not they sometimes also work on wages. If they also work on wages, then select "Top Up". Enter their hours worked, then select "Save".

If the employee was working on wages for this day, then enter the date worked as "Wages" or whatever you decided to call this action. Enter their hours worked, then select "Save".

Once you are finished entering their time worked, select "Other Income" under "More Income & Deductions". Select "Add", enter your piece rate item, enter how many pieces are done for a specific date as quantity, and then enter the rate for each piece 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". Do this for as many items as you like.

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 should be compensated. Select "Save", 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 minimum wage, and so it automatically tops up the amount by giving a pay rate of $10.83/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.