When creating a salary for an employee, setting the effective date is crucial for relaying the updated compensation amounts to payroll. There are 4 scenarios for setting effective dates:
1) Hiring a new employee
2) Changing an employee’s salary
3) Adding an additional salary to an employee’s regular wage
4) Terminating an employee
1) Hiring a new employee –
When hiring a new employee, you’ll see a screen with a field to enter the employee’s Start Date
If the employee’s Start Date does not coincide with the first day of the pay period, the employee’s salary will need to be prorated. The system will do a very basic proration although we encourage the payroll admin to double check these calculations and make their own prorations if need be. You can view or edit the prorations by going to Payroll > view payroll > and hover your mouse over the salary amount to view the system’s prorations
If you’d like to make your own prorations, just click on the salaried amount and edit accordingly
2) Changing an Employee’s Salary -
When changing an employee’s salary, you’ll see a Hire Date which will allow you to choose a dropdown and pick a date.
Note: The Hire Date is the effective date of the new salary
If the Hire Date (effective date) is not on the first day of the pay period, you’ll need to prorate the salary manually (see section above for editing a salary). If the Hire Date (effective date) is on the first day of the pay period, then the system will payout the salary in full based on the new salary created.
To check when the first day of the pay period is, go to: Payroll and see period spans:
In this payroll above, Jan 12 is the first day of the pay period
3) Adding an Additional Salary to an employee’s Regular Wage
When adding an additional wage to an employee’s salary you’ll see an Effective Date that’s already associated with the regular wage
When you go to add an additional wage (green plus icon to right of the screen) you will not see a field allowing you to adjust the effective date for the additional salary
The reason for this is that the system automatically selects today’s date as the effective date for the additional salary – you cannot adjust this date in the system
Note: Make sure you add in your additional wage before the end of the pay period in order for the additional wage to show up on payroll. If you missed this date, you can pay out the gross additional wage amount in +Other and the system will include the additional wage in the next pay period.
4) Terminating an Employee
When terminating an employee, you’ll need to select from the drop down the last day of work for the employee, their termination date
Based on when this date is within the pay period, the employee will be paid in full (if the termination date is the first day of the period), Prorated (If the termination date is within the pay period but not on the first day) or not paid at all – they will not show up on payroll (if the termination date is before or after the current pay period).
Note: If the termination date is within the pay period but not on the first day make, make sure to check/edit the proration as shown for new hires – see above).
Make sure to make the last day of work within the current pay period if you need the employee to be on the current payroll. Otherwise, you can pay the terminated employee’s through an Off-Cycle payroll.