As an employer, you may want to reward or pay your employees additional compensation apart from their gross salary. To add additional compensation on the platform, it is important to understand how ‘pay supplements’ and ‘additional pay items’ (during onboarding) work to ensure a smooth & timely payout experience for your employees.
What are Pay Supplements?
A pay supplement is a kind of monetary compensation given to the employee in addition to their regular base/gross salary. Pay supplements can be of different forms, such as sales commissions, allowances, bonuses or anything paid in addition to an employee’s regular earnings.
The ‘Pay Supplements’ module on the platform allows you to add and keep track of these additional payments given to the employee.
As an employer, you can choose from different types of pay supplements that best describe the compensation you want to provide.
Types of Pay Supplements
How to add Pay Supplements as an admin?
Adding pay supplements as an admin on the Multiplier platform is very easy. The following are the steps:
Step 1: Click on ‘Pay Supplements’ on the left sidebar.
Step 2: Click on ‘Add pay supplement’.
Step 3: Fill in the required details and click on ‘Add Supplement’.
The added pay supplement will be visible under the ‘Processing’ tab.
Pay supplements tabs
The pending tab shows pay supplements that are pending on the employer. The employer needs to input the amount.
The processing tab shows the pay supplements that have the amount entered by the employer and submitted. It is now on Multiplier to process the amount as per the defined dates of payment.
The completed tab shows the pay supplements that have been paid.
Pay supplement statuses and what they mean
Every time a pay supplement is created, status is allotted to it. Understanding these statuses will help you effectively manage and monitor the progress of pay supplements.
A pay supplement is in the "Pending" status when it has been initiated on the system but requires the admin to enter the amount and then submit the pay supplement.
In this status, you can still change the pay supplement details, such as the amount.
Once you have entered all the pay supplement details, you can proceed to submit it, and it will move to “Created” status.
The "Created" status indicates that a pay supplement has been submitted for processing but has not been processed yet.
In this status, the pay supplement can be edited before the cut-off date. After the cut-off date, the details are locked, and no further modifications can be made.
The pay supplement is now queued for processing.
When a pay supplement is in the "Processing" status, it means that it is currently being processed for payroll.
You cannot change the pay supplement while it is being processed.
Once the processing is complete, the pay supplement will move to the next applicable status.
The "Paid" status indicates that the pay supplement has been successfully processed and the payment will be made.
In this status, the recipient of the pay supplement will shortly receive the payment.
5. To be Paid:
When a pay supplement is in the "To be Paid" status, it means that the pay supplement is on hold and awaits further decisions and may likely be processed in the upcoming cycle or the next cycle or get revoked.
Once the final decision is made, the pay supplement will transition to the "Paid" or “Revoked” status or even the "Processing” status if considered for the next cycle.
The "Revoked" status indicates that a pay supplement has been cancelled or revoked before it was paid.
If a pay supplement is in this status, it means that it will not be processed or paid.
You may choose to revoke a pay supplement (before the cut-off date) if you notice an error or if the payment is no longer required.
Once a pay supplement is revoked, it cannot be reverted, and the pay supplement details will change to a read-only format.
What are ‘Additional Pay Items’ in the compensation section during employee onboarding?
While onboarding a new employee, you will find ‘Additional Pay Item’ in the compensation section of onboarding.
‘Additional Pay Item’ refers to any additional compensation given to the employee in addition to their regular base/gross salary. The frequency can be selected for the compensation. Frequencies to choose from include: monthly, bi-monthly, semi-monthly, annually, quarterly, tri-annually, and semi-annually, depending upon the type of compensation.
The following are the types of ‘Additional Pay Items’ that can be added during the onboarding of a new employee:
A joining bonus refers to the bonus given to the employee at the time of joining and will be mentioned in the contract. The actual payout of the joining bonus can be defined by setting the month and year with the amount that needs to be paid.
The below process must be followed for the joining bonus to be processed to the employee:
Steps the employer needs to perform during onboarding -
You can add the details of the joining bonus, such as the amount, the payout month, and any additional notes.
You can also add the joining bonus amount in installments. This means the employee will be paid the joining bonus in parts according to the payout months specified by you.
Steps Multiplier takes to process joining bonus after onboarding -
The joining bonus will be auto-created and added as a pay supplement in the month specified as the payout month by the employer during onboarding.
The pay supplement will appear under the ‘Processing’ tab with a ‘pending’ status in the pay supplement module on the platform.
The bonus will be processed to the employee in the specified month’s pay cycle.
If the employee has been activated before the cut-off date, the joining bonus will be processed in the same month; otherwise, the joining bonus will be processed in the upcoming pay cycle.
For semi-monthly employees, all additional pay components, including pay supplements, will be processed in the 2nd pay cycle.
2. Variable Performance Bonus
As the name suggests, a variable performance bonus refers to a bonus given to the employee for their performance. The frequency and payout month can be set during the onboarding. But the amount is not entered during onboarding as it depends on multiple factors such as the company's performance, the employee's performance, and other macro/micro conditions etc.
The below process is followed for the payment to be processed to the employee:
The variable performance bonus will be added as a pay supplement by Multiplier’s team in the month specified by the employer during onboarding.
The pay supplement will appear under the ‘Pending’ status in the pay supplement module on the platform.
Once the pay supplement has been added, an email will be sent to the admin(super/global/admin) asking to input the variable performance bonus amount in the pay supplement by editing it using the ‘pencil’ icon.
Once the admin fills in the amount, the pay supplement will move to the ‘Processing ’tab with the status as - ‘created’.
The bonus will be processed to the employee in the pay cycle after the admin has added the amount to the pay supplement.
In the case the admin doesn't add the amount to the pay supplement before the cut-off date, then the bonus will not be processed in the upcoming pay cycle.
Allowances refer to monetary benefits given to employees over and above the salary.
The following are the types of allowances you can choose from to add during onboarding :
Mobile and Phone Allowance
Other Allowances (title of allowance type can be added)
The amount given as an allowance can fall under 2 types:
Here the amount of allowance is fixed and will be automatically paid to the employee depending on the frequency set by the employer (monthly, bi-monthly, semi-monthly, annually, quarterly, tri-annually, semi-annually )
The below process is followed for the fixed allowance to be processed to the employee:
Once set during onboarding by the employer, the amount and frequency will be considered for processing during the pay cycle, and the amount will be paid out to the employee along with their salary.
Here the allowance amount is subject to expense approval by the admin before they are paid out.
For example: The employer gives a variable allowance for ‘internet expenses’ to the employee, this means the employer can decide the amount of allowance given every month. Let’s say in May the employer gives $50 but in June the amount need not be the same. It can be less or more depending on the company’s allowance policy. The employer also has the choice to only agree to pay the amount for the internet bill submitted. This is what is called variable allowance.
The frequency for variable allowance can be set as well. Frequencies to choose from include: monthly, bi-monthly, semi-monthly, annually, quarterly, tri-annually, and semi-annually.
The below process is followed for the variable allowance to be processed to the employee:
Currently, on the Multiplier platform, the agreement upon variable allowances is between the employer and employee.
Multiplier will process the payment according to the agreement.
The employee needs to claim expenses according to the instructions of the employer.
The employee can add an expense from the ‘Expense’ module on their platform and request approval from the admin. Based on the approval, Multiplier will process the amount.
The admin can also pay variable allowances by adding a pay supplement for the same in the month it will be given to the employee. This needs to be added under the pay supplements tab on the multiplier platform. The same will be processed in the upcoming pay cycle by Multiplier.
In case the admin doesn't add the amount to the pay supplement before the cut-off date then the bonus will not be processed in the upcoming pay cycle.
The employee news to claim expenses before the cut-off date.
Other additional pay items can be added based on the employer's requirements. The title of the pay type needs to be added. You can also add the frequency from any of the following - monthly, bi-monthly, semi-monthly, annually, quarterly, tri-annually, semi-annually, or even once. The month the additional pay item must be processed must also be set while onboarding.
The below process is followed for the payment to be processed to the employee:
The pay item falling under ‘Others’ will be added as a pay supplement by Multiplier in the month specified by the employer during onboarding.
The pay supplement will show up under the pending status in the pay supplement feature on the multiplier platform.
Once the pay supplement has been added, a mail will be sent to the admin asking to input the amount in the pay supplement by editing it using the ‘pencil’ icon.
Once the admin fills in the amount, the request is shifted to the ‘processing’ tab.
The amount will be processed to the employee in the pay cycle after the admin has added the amount to the pay supplement.