Preparing all the elements of the pay slip is a recurring task. Without an HR management solution, it becomes arduous. In addition to the fixed elements of compensation, the employer must collect, enter, and verify the variable pay components. These are numerous, varied, and standardized.
What are the variable pay components?
The pay slip contains fixed components and others that change from one month to the next. While the fixed components maintain a single amount over a long period, the variable portion of compensation fluctuates practically every payroll collection period.
Preparing variable pay components is more laborious than preparing fixed components (base pay, meal vouchers, fixed bonuses, etc.). The list of payroll variables over a given period is also long, and above all, it requires rigorous monitoring of the rules of the Labor Code and the National Plan (PCG).
Discover how to read a pay slip to better identify EVPs on your payslip.
Working time
Payroll variables related to working time mainly concern overtime and overtime. While basic pay is set in the employment contract, overtime or supplementary working time fluctuates. This variation causes the salary to change from one month to the next.
Absences
Absences are variable pay elements linked to the employee's activity. Their calculation is regulated by the Labor Code. There are at least eight methods for calculating hours of absence. The Court of Cassation uses the method known as "Counting absences in actual hours of the month." Here is the formula: (monthly salary / number of hours actually worked) x number of hours actually absent.
Paid leave
Paid leave is a variable element of pay linked to activity (it has a start date and an end date). Its compensation is taken into account when establishing the pay slip. The payroll manager must take into account the amounts to be included (base salary, increase, paid leave compensation, seniority bonus, etc.) and the amounts to be excluded (end-of-year bonuses, profit-sharing bonuses, review bonuses, etc.) when calculating paid leave.
Sick leave
The employee does not work during sick leave prescribed by a healthcare professional; however, they may receive conditional daily allowances. Sick leave is a variable element of pay that affects the remuneration received depending on its duration. The employer is also required to carry out several procedures in the event of an employee's sick leave, such as providing a salary certificate for the employee.
Training leave
Individual training leave is a period of special leave during which the employee participates in a course, prepares for and takes an exam, or carries out an activity related to eligible training. Depending on the chosen system, salary may be maintained, in whole or in part.
Unpaid leave
Unpaid leave is unpaid absences. The employee's salary varies depending on the number of hours of unpaid leave taken.
Bonuses
Unlike fixed bonuses, bonuses that fluctuate a salary are exceptional and fluctuate in amount. They take several forms and names:
- Commission bonuses
- Seniority bonuses
- Annual bonuses
- Productivity bonuses
- Performance bonuses
- Profit-sharing
- Annual bonus.
Other variable pay elements
Apart from the bonuses and absences mentioned above, the employer may be required to consider other variables when issuing a pay slip:
- Reimbursement of professional expenses: expenses incurred by the employee in the course of carrying out their professional activity must be reimbursed by the employer. These expenses appear on the pay slip for the period in question.
- Reduction in working time (RTT or JRTT): these are days or half-days of rest granted as compensation in the event of exceeding the legal working hours.
- Gift certificates: Gifts, gift certificates, and vouchers are benefits in kind offered by the company to employees. Gift certificates appear on the pay slip when they are subject to social security contributions. This is the case for the fraction greater than 5% of the remuneration amount.
- Meal vouchers.
- Payroll advances and deposits.
What are the HR issues in collecting payroll variables?
The impact of variable payroll elements extends to several departments within the company, leading human resources. Proper management of payroll variables enhances the quality of human resources management by providing various benefits:
- Consistency in the compensation policy: solidarity, satisfaction, and loyalty are strengthened.
- A good employer image: a high EVP (Employee Value Proposition) attracts new recruits and maximizes commitment to the company.
- Regulatory compliance: adjustments and sanctions are avoided.
- Employee motivation: this is the main factor in a company's performance.
- A good payroll ratio: This is a major HR KPI. Skello allows you to calculate and rigorously monitor HR key performance indicators.
Conversely, poor collection or biased processing of variable payroll elements leads to employee dissatisfaction, accounting errors, and potentially a tax audit!
How to enter variable payroll elements?
The processing of payroll variables is a key indicator of good HR management. It is strongly recommended to turn to payroll automation. An intermediate, and very inexpensive, step is to use an Excel spreadsheet for payroll preparation. You can easily find a sample payroll variable table online that fits your management style.
Skello scheduling software also offers unique benefits that go beyond preparing variable payroll elements to optimize all aspects of good HR management. Here is a non-exhaustive list of the benefits enjoyed by the manager with Skello:
- Automatic generation of payroll variables;
- Integration of the specifics of your collective agreement;
- Summary of all overtime hours;
- Summary of absences during the payroll collection period;
- Summary of bonuses, advances, and deposits granted to employees;
- Transmission of data to the accountant in the form of an Excel table for payroll variables;
- Possibility of connecting to the most widely used accounting software;
- Smoothing of overtime hours over the month or year;
- Generation of HR schedules;
- Real-time communication with your employees;
- Generation of your employees' documents;
- Electronic signature of documents;
