Understanding Salary Display and Calculating Gross Pay in Workpay
Workpay offers tools for managing payroll efficiently, including displaying salary details and calculating pay. This article provides clarity on:
How salary is displayed under the Payroll tab in employee profiles.
How to calculate the gross pay needed to achieve a specific net pay.
1. Salary Display: Gross or Net?
On the Payroll tab under Salary Information, the salary displayed reflects the type of salary configured by the employer. Typically, the amount shown is the gross salary or the basic salary, as entered by the employer during setup. It is important to note that this is not an automatically calculated net amount. Instead, it directly mirrors the salary type specified by the employer.
2. Calculating the Gross Pay for a Target Net Pay
If you want to determine the gross salary necessary to achieve a desired net pay (i.e., the amount after deductions like taxes and other statutory requirements), Workpay does not directly calculate gross salary from a net target. However, you can use the following steps:
Utilize a Tax or PAYE Calculator: - Find a tax calculator specific to your country. - Input different trial gross salary amounts to see the corresponding net pay after statutory deductions (e.g., income tax, social security). - Adjust the trial gross amounts until the net pay matches your target.
Coordinate with Finance/Payroll Teams: - Work with your organization's payroll or finance department to apply the relevant tax laws and statutory requirements. - Compute the gross salary required to meet the target net pay using your country's tax bands and deductions as guidelines.
Enter the Gross Salary in Workpay: - After identifying the appropriate gross amount, input it into the employee's "Salary Rates" within their profile in Workpay. - Run the payroll process and generate a payslip to verify that the net outcome aligns with the intended target.
Best Practices
Always validate salary configurations by previewing employee payslips after adjustments.
Use precise and country-appropriate calculators to ensure compliance with local taxation rules.
Consult with financial experts when in doubt to avoid errors in payroll processing.
Related Topics
Setting up employee profiles in Workpay
Using external tools to calculate statutory deductions
Troubleshooting payroll discrepancies