Create a shift premium pay code

Create a shift premium pay code

Shift premiums are a great way to compensate your employees for working particularly challenging or high-demand shifts or for when employees have extra qualifications or take on additional responsibilities. Common examples of shift premiums include:

  • Night or Graveyard Shift Premium for people working odd hours.

  • First Aid Premium for employees who are first-aid certified.

  • Team Lead Premium for employees who take on additional leadership duties.

  • Event Premium is for hospitality employees who might work a hectic event, like a birthday party.

Shift premiums can motivate employees to take on work that’s otherwise less popular, get them excited about additional responsibilities, and reward them for stepping up when it matters.

In Rise, you can add an unlimited number of shift premiums as new Earnings payroll instructions. Here’s how.

Create a new Earnings payroll instruction

Important: Rise is not accountable for custom payroll instructions you’ve configured for your organization. We always recommend you seek advice from a Payroll Certified Professional or consult official federal and provincial government guidelines.
Some settings will be custom to your organization, while others will apply universally based on federal and provincial treatment rules. If you need more general guidance on how to add new earnings, please refer to this article.

Details, Application Policy

These areas are mostly up to you. However, there’s one important thing to consider, and that is Instruction Type:

  • If your shift premium is calculated relative to the employee’s Pay Rate (for example, “pay 10% more than employee’s pay rate per hour”), select the Hourly Earning option.

  • If the standard pay rate doesn’t matter (for example, “pay $1.50 more per hour”), then select Earning.

Payroll Input Sheet

If you selected Earning as the Instruction Type, then the Input value type for a shift premium should be set to Units. If you went with Hourly Earnings, then your only option is Hours.

Why not Hours?

If you use Hours as the Input value type and the instruction is Insurable, the hours will be picked up as additional hours worked. So, 40 hours worked with 20 hours of premiums will add up to 60 total insurable hours. This then causes errors on the ROEs later.

For Hourly Earnings pay codes, where the pay rate is part of the calculation, selecting Hours is necessary. This will require other changes to your configuration, which you can discuss with our support or onboarding team.

Check the Allow input/modification box so you can enter and modify the shift premium amounts when running payroll.

Instruction Value

Assuming you want the shift premium to be calculated automatically based on hours worked or other inputs, you want the Instruction Value to be Determined using a formula.

Let’s look at some options for what that formula should be using a couple of common examples:

Type of premium
Instruction Type / Input Value Type
Formula & How this works
Pay an extra $1.50 per hour
Earning / Units
[InputValue] * 1.50

The formula pays $1.50 for each hour classified towards this shift premium.
Pay 10% more per hour
Hourly Earning / Hours
[InputValue] * ([PayRate] * 0.10)

The formula pays the hours at 10% of the employee’s pay rate. 

Instruction Behaviour

Typically, shift premiums would be considered enhancements to regular earnings, so their payroll treatment would be the same as for regular pay. Therefore, the following settings can be applied:

Setting Name
Taxable - Federal and Provincial
Taxable - Quebec Provincial
Periodic or Non Periodic
Pensionable - Canada Pension Plan (CPP)
Yes (Check)
Pensionable - Quebec Pension Plan (QPP)
Yes (Check)
Insurable - Employment Insurance (EI)
Yes (Check)
Insurable - Quebec Parental Insurance Plan (QPIP)
Yes (Check)
On the record of employment
Do not map to any box on the ROE
Is Vacationable
Yes (Check)
Statutory Pay Eligible
Yes (Check)
WCB Eligible
Yes (Check)
EHT Eligible
Yes (Check)

There might be exceptions to these heuristics, so please don’t hesitate to contact our support team if you need help. We’re also happy to set these up for you — just ask!

Once you’ve set up all your settings, click Save. If the instruction only applies to some departments or employees, remember to enable it for those departments and people.

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