Define Salary Policies

Configure Salary Policies

Purpose

This article explains how to configure Salary Policies within the Compensation Packs module.
Salary Policies define the structure, currency, and calculation rules used to determine fixed remuneration amounts across functions, categories, and contracts.

Goal: Define standard salary rules and structures to ensure consistency and transparency in employee remuneration.

Overview

Salary Policies determine how base salaries and related allowances are calculated within the organization.
They include both policy-level configuration (currency, allowance months, etc.) and salary value details (monthly and annual ranges by function, area, and level).

A new Salary Policy can be created from scratch or based on an existing one to replicate predefined configurations.

✅ This setup ensures standardization of pay scales across all business areas and career levels.

Access Path

People Management → Compensation Packs → Salary Policies

Step 1 – Create or Import a Salary Policy

To create a new Salary Policy:

Click Add Salary Policy.
In the pop-up form, choose whether to:
- Import Salary Policy – Copy data from an existing policy.
- Or start a new policy manually.
Complete the required fields:

Field	Description
Name*	Enter a unique name for the policy (e.g., Standard Salary Policy).
Currency*	Select the currency for salary values (e.g., EUR, USD).
Vacation Allowance Month	Select the month when vacation allowance is paid (e.g., July).
Christmas Allowance Month	Select the month when the Christmas allowance is paid (e.g., November).
Twelfths Options	Check if these allowances are divided into twelfths across the year.
Company	Select the applicable company or choose Tenant-Wide if the policy applies globally.

Click Save or Save and New to continue adding more policies.

💡 Tip: Use the “Import Salary Policy” option to duplicate existing configurations and save setup time.

Step 2 – Define Salary Values

Once the Salary Policy is created, you can add the salary scales for each area, function, or category.

To add a Salary Value:

Open the relevant Salary Policy.
Click Add Salary Value.
In the Salary Value Details pop-up, complete the following fields:

Field	Description
Name*	Name for this salary configuration (e.g., Salary Standard).
Areas / Functions / Categories	Define the scope of the salary rule.
Period	Number of months in the salary cycle (typically 12/14).
Monthly Base / Max / Avg	Enter monthly salary range values.
Annual Base / Max / Avg	Automatically calculated from monthly values.
Work Hours Exemption	Tick if exempt from standard work-hour calculations.
Shift Allowance	Select if shift pay applies.
Meal Allowance / Long-Service Bonuses	Check if included in salary structure.

Click Edit to save and confirm.

✅ Each salary value defines the pay range and conditions for a specific role or function.

Important Notes

⚠️ Editing an active Salary Policy or Salary Value don't affects linked employees and contracts.

Keep separate policies for different companies or regions to maintain currency consistency.
Avoid duplicate policy names — they may cause confusion during contract setup.

Best Practices

💡 Recommendations for maintaining salary policies:

Standardize salary ranges to support fair compensation and reporting consistency.
Align salary policies with Career Categories to reflect employee progression.
Update policies annually to reflect inflation or organizational changes.
Keep a record of all modifications for auditing and traceability.

📋 Summary

Action	Description	Outcome
Add Salary Policy	Create or import a new salary policy.	Base policy available for configuration.
Add Salary Value	Define salary levels by area, function, or category.	Structured salary data ready for linkage.
Edit Policy or Value	Adjust amounts or parameters.	Updates reflected across linked records.

About Compensation Packs
Contract – Payroll (cross-link)
Contract – Cost Management (for rate and billing alignment)
Configure Areas, Functions & Categories (to define salary scales per function or category)
Contract – Career (for alignment with roles and levels)

✅ Salary Policies create a consistent foundation for compensation, ensuring equitable remuneration and smooth integration with contracts and HR processes.