WFM UK: Rotas: Reviewing the Rota Wage Cost

Overview
 

The Wage Function Setting page allows organisations to choose which pay elements are included in the Rota wage cost, and which elements are displayed on the Rota Analysis page, in line with their own specific requirements. This article explains how this is configured. It is important to include as many elements as possible so as to narrow the gap between the Rota and Payroll reports.

It is also important to keep rotas accurately updated as any payments for missing hours will not be included in the Rota wage cost. This can then contribute to a gap and may also impact flexible employees' holiday pay and entitlement.

Please note: Adding a salaried holiday accrual will create a gap. Please read this article on how to set up a salaried holiday accrual - WFM - Salaried Holiday Accrual

Also please note: Since this article was first written, new functionality has been introduced to the system that allows salaried employee costs to be calculated based on the working days in a calendar month instead of 'annual salary/52/actual days worked'. Further details on this can be found at the end of this article.

What Should be Included in the Rota Wage Cost?

This is business-specific, however, the wage function setting can include:

• National Insurance (NI) for both salaried and hourly employees
• A holiday accrual for salaried and hourly paid employees
• Actual holiday pay for hourly paid staff
• Payments entered via the Rota module in additional payments
• Tronc – this can only be included if using the Tronc module (not Tronc2)
• Fixed costs – if Fixed Cost Areas are in use
• Statutory Payments such as SMP, SAP and ShPP. This will include 100% of the cost paid out and will not reflect the 8% that is the actual cost to the business
• Statutory Sick Pay
• Pension accruals can be entered using 'Factor X'
• Other payments entered using metrics – this will be business-specific

Access Requirements

An administrator login is required to access this area of the system.
 

Wage Function Setting

• Go to Rotas > Administration > Wage Function Setting

Fig.1 - Accessing the Wage Function Setting

Before making changes, please consider that the changes are global and will have an immediate effect.

The page is a series of tick boxes that can be ticked or unticked as required.

A description of each of the headers and sections highlighted in Fig.2 can be seen below in table 1.

Fig.2 – Wage Function Settings page

Table 1

 
Wage Elements

These are broken down into sections:
(use the links below to go straight to that section)

• Hourly Pay
• Salaried Pay
• National Insurance
• Holiday and Tronc 
• Additional Payments entered through the rota
• Fixed Costs, Overtime and Statutory payments
• Display Settings

Hourly Pay 

The cost of hours or shifts (or both) can be included in the rota wage cost as required by the business.
 

The example in Fig.3 shows:

• Basic pay for hourly paid staff included in the rota wage cost
• NI being calculated on this pay element. This is at the standard rate for National Insurance
• A holiday accrual being calculated on the hours entered on the rota
• An additional accrual (Factor X) being calculated on the hours entered on the rota
• The pay element will be displayed on the Analysis page
• The cost of shift-paid employees will not be included in the rota wage cost

Fig.3 - Hourly pay elements

Salary Pay Elements 

• Managers Lent is the cost of salaried employees working in different locations. This will display as a credit, as the full cost of the employee will show in ‘Salaried Total Pay’ for the home location
• Managers Borrowed is the cost of salaried employees who are employed at other locations
• Salaried Total Pay is the total cost of all salaries scheduled at that Location (salary divided by 52)
• Absence Deduction for Salaried Employees will remove the cost of a salary when an absence is entered, regardless of the configuration of the absence type. 
  • It is recommended that this be left unticked to avoid understating the Rota wage cost when salaried employees receive paid leave
• Total Pay will display hourly pay plus salaried pay and will include adjustments for managers borrowed and lent

Fig.4 - Salary pay elements

The example in Fig.4 shows that:

• NI is calculated on all salaried pay elements
• A holiday accrual is not being calculated on salary cost
• An additional accrual (Factor X) is being calculated on the salary cost
• The pay element is displayed on the Analysis page

National Insurance Elements

The cost of National Insurance can be displayed separately if required. 

Fig.5 - National Insurance elements

Holiday and Tronc Pay Elements

• Holiday pay for hourly paid employees with authorised holiday can be included in the rota wage cost
• The calculation for this holiday will be based on the employees working unless the Rotas module global setting to 'calculate holiday on Hours x Rate' is enabled
• If employees are paid extra for bank holidays, this additional cost can be included if statutory days are set up
• If an accrual is being calculated, hourly holiday pay can be displayed but not included in the rota wage cost
• The cost of allocated tronc can be included if the Tronc module is being used (not Tronc2) 

Fig.6 - Holiday elements

Additional Payments

• Where additional payments are entered through the Day Content page in the Rota, these can be included in the rota wage cost
• This may be used for bonus payments, back pay, or responsibility pay
• If an admin fee is applied to these payments, this can also be included in the rota wage cost

Fig.7 - Additional Payments

Fixed Cost, Overtime and Statutory Pay Elements

• Where Fixed Cost Areas are in use, these costs can be included in the rota wage cost and displayed on the Analysis page
• If overtime functionality is set up, this cost can be included in the rota wage cost and displayed on the Analysis page. This information will only populate once the overtime has been approved
• SMP, SPP, SAP and ShPP costs can be included in the rota wage cost, but this will reflect 100% of the cost paid out in the Payroll module rather than the 8% actual cost to the business
• SSP entered in the Rota module is only an estimate, and the cost will be associated with each absent day on the rota. The value of one day’s absence is defined within the wage function setting to allow an estimated cost of a sick day to be included in the rota wage cost. However, SSP is paid as a weekly amount in payroll, and the rota cost will not reflect waiting days

SSP is no longer claimed back from HMRC. 

Fig.8 - Fixed Costs, Overtime and Statutory Payments

Calculated Values

This section allows a business to decide the order in which the system calculates the costs. This enables NI to be included in holiday accrual calculations.

The 'Calculation Order' column determines the order in which the pay elements are calculated.

• If the values are all set to 1, the system will calculate the pay elements on base pay
• If the employer's NI is set to 1 and holiday accrual and other accruals are set to 2, the system will calculate NI before calculating holiday accrual and other accruals, so that NI is included in the calculation
• The Wage Cost column must be ticked if NI, holiday accrual or other accruals are to be calculated by the system
• Using the radio button(s) applies that percentage or calculation to that individual wage element. Rather than entering 13%, the order of the values can be changed and the percentage 12.07% kept 

Fig.9 - Calculated Values

These elements can be displayed on the Analysis page.

Display Settings 

The Display Settings control the information that is available on the Analysis page. 

Fig.10 - Display Settings

Percentage Elements 

The amount that is added to an absence and the percentage for holiday accrual is controlled in the Display Costs section. 

• Statutory Sick Pay Day Rate is the cost added to the rota when an SSP configured absence is entered

This is usually:

£92.05 divided by 5 = £18.41
or
£92.05 divided by 7 =  £13.15 

• This is the percentage that calculates the Holiday Accrual. It is also used by the Holiday Accrual Journal in Payroll

Fig.11 - Display Costs settings

Configuring Other Accrual 

• To include an additional cost calculated on a percentage into the Rota wage cost, Factor X must be set up and the Other Accrual columns must be ticked (see Fig.2 & Fig.9)

This is most often used for Pensions.

The percentage value needs to be entered in each location and can vary by location if required. 

• Go to Rotas>Administration>Configure Locations
• Select a Location
• Select Edit Factor X and Fixed Costs

Fig.12 - Edit Factor X and Fixed Costs button
 

Fixed Costs

• Fixed Costs areas need to be set up to include a static cost in the Rota wage cost.

The following guide explains how to set up and use Fixed Costs - WFM - Using Fixed Costs.
 

Salary Job Titles

For the Rota wage cost to be accurately calculated, all Salaried Job titles associated with that cost must be included in the Rota wage cost. This can be checked in Configure Locations. 

• Go to Rotas > Administration > Configure Locations > select Location
• Scroll down to the 'Salaried Job Titles Included in Rota' section

The example in Fig.14 shows that the General Manager Salary is not included in the rota wage cost. 

• To include this cost, select Edit Job Title Salary and tick Include Salary?

Fig.14 - Job title not included in Salary

• Tick the boxes against the required Job Titles
• To include all Job Titles, use the Apply button
• Save the changes

Fig.15 - Tick to include Salary in Rota wage cost
 

Rota Costs - Calendar Months