What is a Paygrade?
A Paygrade is a specific compensation level used to group employees with the same earnings. It simplifies managing salaries by creating standardized pay levels. For example, if a Paygrade has a net breakdown of 100,000 naira, all employee(s) assigned to this Paygrade will earn that amount.
This system helps streamline payroll management and ensures consistency in compensation across similar roles or experience levels.
Follow these steps to set up a new Paygrade:
Head to the Menu on the left side of the screen and scroll down to find Compensation.
Scroll to Payroll and click the downward arrow.
Select Configuration.
Click Paygrades at the top of your screen.
Choose Create new Paygrade.
Enter the following details to create a Paygrade:
Select Payband: choose the appropriate payband from the list if it applies to this paygrade. If no payband fits or you're not using paybands, simply leave this field blank.
Paygrade name: assign a name to your paygrade. Don't worry if you're unsure - Pade can generate a default name (e.g., Paygrade 16) which you can edit later.
Alias: an optional, employee-friendly name that will appear on their profiles. Leave this blank if it doesn't apply.
Currency: select the currency used for salaries in this paygrade.
Annual pay:
Select Gross if this amount includes taxes and statutory deductions.
Select Net if this paygrade will have zero deductions.
Taxable status: choose whether to apply standard tax calculations or input your tax calculation method, such as a percentage of gross earnings or a specific tax amount.
Click the search bar to select allowances linked to the paygrade.
Customize each allowance and establish calculations (percentage or specific amount).
Choose the pay schedule for allowance distribution
Click the search bar to select the tax relief to be attached to this paygrade.
Customize each tax relief.
Select the statutory benefits linked to the paygrade.
Customize each statutory benefit, including employee deduction and employer contribution.
Specify if the deduction applies to the entire gross or specific allowance.
Click Next to save your new paygrade.