AAR Calculation

Payroll | AAR Calculation command

Overview

Employees covered by an Award are not all paid at the same rate. The Advanced Award Rate (AAR) Calculation flags employees who are eligible for a rate increase according to the details set by their Award. You can use the AAR Calculation command to update employee rates.

An Award can contain several pay rates in its Rates makeup table. When you pay an employee, PayGlobal checks the employee’s Rate Override in their employee record.

The AAR Calculation is often used when an employee is not eligible for the adult award rate. For example, the employee is under eighteen years old and on a youth rate. However, when they turn eighteen, the employee’s pay rate will increase to the adult award rate. The AAR Calculation works with Award tables to identify employees who are eligible for a rate increase based on their award or apprentice hours.

Function

You can set it up the AAR Calculation to:

Add the new rate to the employee record so the employee is paid correctly.
Prevent the employee being paid at the old rate by entering an end date.

Who is it suited to?

Organisations use the AAR Calculation to ensure that their payroll complies with current legislation. This command is most suited to businesses with employees who:

Are on minimum wage
Are under the minimum wage age
Accumulate apprentice hours
Are eligible for a pay increase depending on length of service.

Advanced Rates

The AAR Calculation uses the rates that you set up on the Award Advanced Rates | Rates tab. These rates are usually based on age, length of service or position classification. Run the AAR Calculation command regularly (for example, once a week) to see which employees are entitled for a rate increase.

Advantages

The AAR Calculation has the following advantages over manual editing of employee rates:

All calculations are performed in the one area.
The AAR Calculation does not impact on pay processing time.
PayGlobal creates an audit log of changes to employee rates for the user to reconcile.
The Award Interpreter sets stringent rules that are not open to user interpretation or memory.

Exceptions

To prevent an employee's rate from increasing, you need to edit the rate in the employee file.

Advanced Award Rate Calculation form

When you access the AAR Calculation command, PayGlobal displays the Advanced Award Rate Calculation form. The fields on the Detail tab are explained in AAR Calculation - Details.