Additional compensation

Additional Compensation is any added pay given to the employee in addition to their regular base/gross salary.

Additional pay is broadly categorised into two types of allowances - 1. Fixed allowances - Multiplier offers 100 different types of fixed allowances to choose from.

2. Variable allowances - Multiplier offers 10+ types of variable allowances.

This additional compensation is billed to the employee as per the billing frequency selected by you, and subsequently, the payout to your employee is released as per the pay schedule selected by you.

Billing frequency - The frequency at which the amount is billed to the employee. The options for billing frequency may differ as per the local laws of a country.

Pay schedule - The frequency at which the amount is paid to the employee. The pay schedule depends on the type of billing frequency selected by you.

Learn more about the various combinations of billing frequency and pay schedule here.

Fixed allowance

Here, the amount of allowance is fixed and will be automatically paid to the employee depending on the frequency set by the employer (monthly, semi-monthly, annually, quarterly, semi-annually, one time)

Note: 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.

Types of fixed allowances

You can add about 100 different types of allowances for your employees on the Multiplier platform. Refer to Types of fixed allowances available on Multiplier for more info.

Variable allowance

The current process for variable allowances involves displaying these amounts in the Pay supplement module, allowing users to verify the final figure before payroll processing. For instance, if an employee has a target bonus of $1000 per month, but their actual performance warrants a bonus of $800, the employer will adjust this amount directly within the Pay supplements module. This revised amount will then be seamlessly integrated into the payroll system for final processing and disbursement. This ensures transparency and allows for necessary adjustments based on performance or other relevant factors before the employee receives their compensation.

• 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 employer's instructions.

• 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.

Note -

• If the admin doesn't add the amount to the pay supplement before the cut-off date, the bonus will not be processed in the upcoming pay cycle.
• The employee will also need to claim expenses before the cut-off date.

Types of variable allowances

Refer to Types of variable allowances available on Multiplier for more information.

Payment in a fixed number of recurring payments

This allows you to specify whether the additional pay should be distributed over a set number of payments or paid between a specific start and end date.

• Yes: Requires a "Start date" and "Number of instalments". A disclaimer will indicate that the amount will not be pro-rated for allowances.

• No: Requires a "Start date" and "End date". A disclaimer will indicate that the amount will be pro-rated for allowances based on the start and end dates.

Important considerations

• If the Billing frequency is One-time, the Pay schedule will automatically be set to One-time, and the Fixed number of instalments will default to Yes with Number of instalments as 1.

• Variable additional pay amounts have a Target amount that can be adjusted in the Pay supplements module.

• Generally, all allowances are prorated based on the compensation schema. However, if additional pay is set up to be paid in instalments, this pro-rata will be overridden.

This framework provides a comprehensive way to manage and understand various types of additional compensation for employees, ensuring flexibility and accuracy in payroll processing.