Shift differential setup
Shift differential is configured to pay extra compensation for the employees who work on the odd hours like weekend shifts, night shifts, or holiday shifts. In Zoho Shifts, you can create multiple shift differentials in single pay rule.
Before you start
To configure the shift differential for payroll, you’ll need the Administrator access level or the Manage payroll settings permission enabled.
To configure shift differential:
- Navigate to the Settings menu in the top-right corner.
- Select Pay Rules under the Time & Attendance section.
- Select the pay rule you wanted to configure.
- Click the Shift Differential setting tab.
- Click the +Add Shift Differential button at the right.
- Select the Day Type as On Week Days or On Public Holidays for which you wanted to configure.
- Choose the days if you have selected Week Days day type.
- Select the Differential Amount from the list.
- Enter start and end time, pay percentage/amount, and minimum hours.
- Click Save button.
You can configure shift differential by:
Percentage of Hourly Rate (percentage & min hours):
A percentage per hour is added as extra compensation in addition to the employee’s regular wage.
For example, an employee earning a base hourly rate of $20 who works a night shift with a 10% shift differential will be paid at an adjusted hourly rate of $22 for that shift ($20 + 10% of $20).
Fixed Amount Per Hour (amount & min hours):
A fixed amount shift differential is an additional hourly payment added to an employee’s regular base wage for working specific shifts (such as weekends, nights, or holidays). This differential is paid for each hour worked during the eligible shift.
For example, an employee earns a base hourly rate of $10. If the fixed shift differential is $5 per hour and the employee works 7 hours on Sunday, their total hourly rate for that shift is $15. Total pay for the Sunday shift is ($10 + $5) × 7 hours = $105.
Fixed Amount Per Shift (amount & min hours):
A fixed amount is paid as additional compensation for an entire qualifying shift, regardless of the number of hours worked. This amount is added to the employee’s regular wages for that shift. When Fixed Amount Per Shift is chosen as Differential Amount type, Minimum hours must be specified.
For example, an employee earns a base hourly rate of $10 and works a 7-hour Sunday shift. If the fixed shift differential is $30 per shift, the employee’s total pay for that shift is ($10 × 7) + $30 = $100.
Note:
If both overtime and shift differential are configured, the shift differential rate is applied as the regular rate for the overtime calculation.
Scenario 1: How to configure shift differential for weekend shifts
Let's say the weekend shift differential is configured with extra pay of $15 per hour if they have worked at least for 4 hours.
Let's say an employee works on a Saturday with an hourly rate of $40. Here is how the differential amount calculation goes:
Total worked hours = 8 hours
Regular wage = 8 * 40 =$320
Weekend special pay = $15
Shift differential wage =8 x 15 = $120
Total pay = $320 + $120 =$440
Scenario 2: How to configure shift differential for holiday shifts
Let's say the public holiday shift differential is configured with a special pay of $30 per hour with a minimum hours as 3 hours.
Here is an employee working on a public holiday shift whose base hourly rate is $60 and the calculation goes for the pay based on the below worked hours.
Worked hours | Regular wage | Shift differential wage | Total pay |
7 hours | $60 x 7 =$420 | $15 x 7 = $105 | $420 + $105 = $525 |
Note: If the start time of a shift falls on a holiday and the minimum hours criteria is satisfied, the entire shift is eligible for the shift differential.
Scenario 3: How to configure shift differential for night shifts
Let's say special pay of $150 for night shift employees who work for a minimum of 4 hours between 9:00PM to 4:00AM.
The special pay goes as below for an employee working on the night shift with an hourly rate of $60.
Worked hours = 8 hours
Regular wage = 8 x 60 =$480
Shift differential wage = $50 x 8 = $400
Total pay = $480 + $400 =$880
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