Payroll: Organization
Introduction
The first step in setting up your Payroll system starts with the configuration of Organization under Setup -> Organization Structure -> Company/Vessel Properties.
Here you enable and configure the Payroll Module for the selected organization.
The configuration covers different areas: calculation logic, reporting, accounting, allotment, etc.
Setup -> Organization Structure
Company/Vessel Properties
National Payroll System
When you create the Organization structure in APM, you need to consider the National Payroll System.
For the crew that has a specific national payroll, you need to create separate organization units (Norwegian, US, Philippines, etc.)
This is necessary only if you calculate and report taxes for such crew from APM.
All the crew should be accordingly liked to those organizations in Personal Details.
Let’s take as an example an imaginable company and call it Aqua AS. Aqua has 3 different sub-companies for the employees that are resident in Norway, the USA, and the Philippines.
If we want to process taxes directly from the APM, we need to create three different companies for the employees resident in Norway, the USA, and the Philippines.
If we don’t want to process taxes from the APM, then we can link all the people under one unit - Aqua AS (crew pool).
Tabs Overview
Under each organization unit, there are different configuration sections. Their number varies depending on the type of organization unit (top-level/company/vessel/department).
Each section is logically subdivided into smaller tabs containing various setup options.
Note: Not all the payroll-related tabs are located under the Payroll section.
Please see the below table describing all the sections that have some relation to Payroll.
Top-level (Concern)
General - here you can define the logo to be used for the entire organization. It will be picked up on certain reports (e.g. payslips).
Rates - under this tab, we can add the global rates that will be relevant for the entire organization.
Company (Crew Pool/ Vessel Pool)
Properties tab
Rates - under this tab, we can add rates specific to this company unit (e.g. to be used for Malta reporting, etc.) Here we also define personal rate names/values to be used for the employees linked to this organization in Person Details.
Misc - under this tab, we set up additional fields that will be available in the activity details. Those fields can be used for various payroll purposes - e.g. to set the rate override on a single activity etc.
Payscale - here we can filter off the payscales that will be available for the crew employed under the selected company.
Payroll tab
General - contains a generic set of options related to the Payroll module.
Tax - used for the configuration of tax reporting (Norwegian, US, Philippine, etc.)
Payment - under this tab, we configure the payment details of this organization such as payment method, bank account info, and logic for the generation of net entry.
Accounting - used for the definition of accounts on the organization level.
Period - under this tab, we define periods for the Payroll and Time Cards.
By default, the periods correspond to the beginning and end of each calendar month.
Reports tab
Is used for configuration of the standard/ in-build reports.
Additional tabs may be added under this section depending on the National Payroll Code.
Vessel
Payroll tab
General - contains a generic set of options related to the Payroll module.
Pension - used for the definition of the vessel-related pension information: Pension No/Class etc. Norway specific.
Period - under this tab, we define customized periods by Voyage.
Rates - under this tab, we can add rates specific to this vessel.
Payscales - used for the feature called "Automatic Pascale Assignment"
Department
Rates - under this tab, we can add rates specific to this department on the selected vessel.
Accounting Code - a field where we can add the accounting code specific to that department.
Each of those sections contains various options that have a direct impact on the Payroll.
In this course, we will not talk about all of them but highlight only the required and most frequently used ones.
Setup by employer
The setup “by Employer” is used to split the payments and accumulators of a person by the employer (vessel owner).
It is most frequently required by the companies that perform HR operations for numerous companies/agencies.
This setup is usually required for reporting purposes (payslips, accounting lists, etc.)
e.g. If a person worked for 2 different employers within the same payroll period, there would be different reporting for each of them.By default, the setup "by Employer" is inactive, and all the accumulators are linked to the single unit - top organization level (Concern).
If this setup is something you require, follow the below steps to activate it.
Otherwise, skip this chapter and move on to the next one.
Organization settings
1) Enable the option “Is Employer” for all the organization units that are considered employers.
It can be a Vessel, Vessel Pool, or Crew Pool (organization to which a person is linked in Personal Details > Employment). Usually, we recommend adding all the vessels under a separate organization - Vessel Pool - and then grouping them under the proper Employer sub-organization (see example below).
2) Enable the option "Mother company" for this Employer. When the option is on, the name and address of this organization will be displayed on the standard Payslip by Employer.
If the option "Mother company" is not set on any suitable organization unit, the company name, and address will not be displayed on the Pay-slip by Employer.
Global Options
Go to the Setup > Global Options > Modules > Payroll tab and enable the option called "Split Year To End Values By Employer".
Entry code scripts
When setting up Entry Codes, L990=L992 should be added to all the entry codes if the employer is a Vessel or a Vessel pool.
If the employer is a Crew Pool (Organization in Personal Details), the correct value will be fetched by default. No need to add L990=L991 in the script.
Field | Description |
L991 | Is a unique Id (Numorgid) of the Employer of person's organization in Personal Details. |
L992 | Is a unique Id (Numorgid) of the Employer of the Vessel selected in DIM2 (L32 field on the Entry Code ). |
L990 | Is a value stored in the "Employer field" on the Entry Code. By default equals to L991. |
Standard Payslip
With the setup “by Employer” we use a standard payslip report called Laser Layout by Employer.
When a person works for two different employers within the same payroll period, there will be two separate payslips for each of them.
Minimum required setup
When you start using the Payroll Module, there is a list of options in the Organization that should be configured first. Please follow the below steps to make the minimum required setup:
Payroll → General
Turn ON the “Payroll Enabled” option.
Select the default "Currency Code" to be used for the calculation of payments.
Select the “National Payroll Code”.
This step is required only if you make payments and report specific to certain countries.Define "Payroll Period (Year and Month)" for your first payroll calculation.
By default, the period start and end dates correspond to the beginning and end of each calendar month. However, it is possible to set the user-defined periods when the option "From Period Register" is ON (see next chapter).
Payroll → Periods
Now we need to configure the payroll "calculation calendar" or "payment period".
By default, the system calculates payroll based on the calendar month (12 periods in all), where the start/end of each period corresponds to the beginning/end of the corresponding month:
e.g. 202101 - January, 202102 - February, 202103 - March, etc.
However, this logic is only applicable when payments are performed monthly.
In cases, when the payments are submitted twice a month, or the start/end of each period is rather specific, it is necessary to define the customized periods.
Defining customized periods
To define the customized periods, first of all, you need to turn
On the option "From Period Register" under Payroll > General.
Then, under the Payroll > Period, we can define our customized periods list.
Here you can define periods both for the Payroll and Time Cards Modules.
New button adds a single period.
Wizard button on the contrary allows adding multiple periods in a batch.
Open button allows you to view the details on the selected period and adjust it.
✖ Delete button is used to remove the selected period.
Only possible if the period is not in use, meaning that there are no payroll entries linked to it.
When you click the New, the following window opens up.
The most important and frequently used fields are:
Period - is a period number. It has the following pattern yyyypp, where yyyy is year, pp is period (01-99).
Period Name – the name of the period (January, February, etc.)
First/ Last Date - start/end dates of the period.
All the other fields are rather specific and seldom used.
Most of them do not affect the workflow of the system and can only be used as a reference in some customized reporting.
Responsible Payroll Manager – is a free input field that contains information about the main payroll user (if applicable).
Reports Completed - free input field where you can add a due date for the reporting.
Payment Date - the date when the final payments are supposed to be processed.
Advance Payment Date - the date when the advanced payments are supposed to be processed.
Time Card Finish Date - the date when the Timecards should be finalized.
Leave Days Balance Date
When the date is set the leave days in the Activities > Leave Account will be calculated up to that date set in the current period of a person.Use payroll period dates for timecard
Allows setting the same Start/End dates for the timecard period as you have for the corresponding payroll period.Holiday dates - allows you to define the national public holidays list.
The common practice is not to set Holidays in the Organization, but to set them in the Payscales (see next chapters).
If you use the Wizard to create periods, the dialogue window will look slightly different.
Additional fields will be available for input:
Number of Years - identifies for how many years forward you are going to create periods.
Start year - identifies from which year the periods should be created.
Add holidays - this option automatically sets each Saturday or Sunday within the selected period as a holiday.
Common text – a common text to be added to the name of each period.
Limiting total days calculation
Once the periods are defined, it is also possible to limit the days' calculation with the following options.
Real Calendar for Payroll - the application calculates payroll based on the actual number of days in the current month (28/29 days in February, 30 days in June, etc.).
30 Days Calendar for Payroll - the payroll period always consists of not more than 30 days. Thus in February, if the person worked the whole month - 29 days, the system would add +1 extra day to make it 30 in total. In July the 31st day of the month is ignored and not included during the calculation.
15 Days Calendar for Payroll - the payroll period always consists of not more than 15 days. It is only applicable if you have a customized periods’ definition (2 periods per month, etc.). Thus in May, you would probably have periods from 01/05/2021 - 15/01/2021 and 16/01/2021 - 31/01/2021. With this option, the 16th day of the second period will be reduced.
If none of the above options is selected, the system considers that a 30-day payroll is in use.
Note: Whether the option 30 Days Calendar for Payroll is ON/OFF the system always uses 30 days rule regardless of the real calendar month. The difference between when the options is ON or OFF is in the following:
If the option is OFF, the system uses regular 30 days rule and adds up additional days only if the person works the entire month.
When the option is ON, the system calculates based on a different 30s days rule. It adds additional days even if the person didn't work the entire month.
Payroll → Payment
Select the "Generate payment entry" option.
Set the option "Multiple Payments in Period" if you process payments to the bank several times within one period.
The "Generate payment entry" option choice greatly depends on the way your company operates (payment procedures, reporting, etc.) Let's check how each of those options works.
None
When this option is set, the “Net Entry” will not be generated in Payroll at all (default option).
During calculation
When this option is set, the "Net Entry" will be generated after you calculate a person.
The system will generate only one "Net Entry" per person.
Note: This option cannot be used if you have the "setup by employer".
By employer
When this option is set, the “Net Entry” will be generated based on the vessel employer (a company that owns the vessel) after you calculate the person.
If the person worked for two different employer companies or vessels within one payment period, the system will split the amounts and generate two different "Net Entries" - one per employer.
Note: This option can only be used if you have the "setup by employer".
Separate vessels
When this option is set the net entry will be generated after you calculate a person.
If the person worked for two different vessels within one payment period the system will split the amounts and generate two different “Net Entries”.
Note: This option can be used regardless of the setup by employer.
When producing payment list
The “Net Entry” will only be produced once you run a standard payment list report.
Note: This option cannot be used if you have the setup by employer. It is also not recommended and is seldom used.
Payroll → Reports
Payslip
Under this tab, we configure the output for the standard/ in-build payslip report.
Here we can:
Define the language used on the Payslip (English, Norwegian, French).
If none is selected, Norwegian is used by default.Remove some of the default information from the payslip (employer's address, logo, pay-scale name).
Collapse payment entries of the same type into one on the payslip.
e.g. if a person worked on two different vessels within one payment period, he/she is most likely to have two “Basic Wage” entries in Payroll for each onboard period. With this setting, it is possible to collapse those entries into one line in the Payslip report.Input a default text to be displayed in the Payslip for all the employees under this org. unit.
Define the accumulators to be displayed in the Payslip.
This feature works only with the standard payslip report "Laser layout by Employer" or customized payslips.
Documents
Under this tab, we add a logo that will be displayed on the payslip for the selected company and set the default text for the report header and footer.
Setting up a logo on the company level is only required when you have different logos for different companies. Otherwise, it is enough to set the logo only on the top-level organization (CONCERN).
Norwegian customers
Additional setup required for Norwegian customers:
This chapter is relevant only for Norwegian customers or those who run Payroll for Norwegian sailors. If you are not one of them, you can skip it.
For the companies with the National Payroll Code set to NO (Norway), a few mandatory fields should be defined in Organization: Tax Region and Employers Fee Zone.
To define Tax Region, go to Payroll -> Tax tab and add the Region code and Post address for your company.
To define Employers Fee Zone, go to Properties -> Rates tab -> System 4 and add Employer Fee Zone under rate line 90.
If the information is missing, the system will give the following warnings.
The message says that you need to define the Tax Region code before saving the changes.
The message says that you need to add Employers Fee Zone before saving the changes.