Create Custom Award Rules

Learn to create award rules in Tanda: Ordinary Hours, Overtime rules, minimum engagement, TOIL, Allowances and more

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Written by Jye
Updated this week

This guide details how to create custom award rules in Tanda. Custom award rules are used when:
(a) an employee is not covered by a Tanda modern award template, or;
(b) an employee is covered by a Tanda modern award template but has additional or slightly different conditions to those contained in the award template

How Tanda applies custom award rules

Tanda knows which award rule to apply at any point in time by applying the rule which contains the most specific conditions to the relevant point in time.

For example, if you created two award rules: one that applies at all times every day of the week, while the other applies only on Saturdays. Technically, both rules could apply on a Saturday, but the rule which only applies on Saturdays would be the most specific at this point in time, so would apply when the employee works on a Saturday.

If you then added a third award rule which applied only after 4pm on Saturdays, technically all three rules could apply at this point in time, but the rule which only applies after 4pm would be the most specific at this point in time and would apply when the employee works after 4pm on a Saturday.

Best Practice for Creating Rules

If you pay different rates on different days of the week, create separate rules for each different day. For example:

  • Monday to Friday

  • Saturday

  • Sunday

  • Public Holiday

Create a separate rule for each scenario

If the same rate of pay can apply to a few different scenarios, it often makes sense to break these down into multiple rules to ensure in each scenario, the rule is the most specific at that point in time, meaning it will apply over other rules.

For example, if Overtime x1.5 applies when an employee works past 7pm, or when working more than 8 hours in a day, or when working more than 38 hours in a week.

Each scenario should be built as its own rule to ensure the most specific overtime rule applies in each scenario.

(optional)- Use a numbering system to organize your rules:

If you require a long list of rules, it can be easier to organize them with a numbering system at the beginning of each rule name.

For example, you could use:

  • A starting number based on employment type: E.g. 1 for Full Time, 2 Part Time, 3 Casual, and so forth.

  • The second number for day of the week, e.g. 1 for Weekdays, 2 for Saturday, 3 for Sunday, 4 for Public Holidays.

  • The third number refers to how specific the rule is. 1 will typically be your base rule (i.e ordinary hours). As the larger the number, the more specific the rule. For example, 2 may be Ordinary hours after 7pm, which is more specific than 1 as it can only apply after 7pm.

Use multipliers

When creating rules, you'll see there is the option to use multipliers or flat hourly rates. We recommend using multipliers where possible. This is because multipliers tend to remain consistent across employee classifications and over time, whereas rates change more frequently (ie EOFY, birthdays, promotions). Multipliers typically won't require as much updating, and from a payroll perspective, this means fewer pay items are required in your payroll software.

Creating and Updating rules via CSV

If you need to bulk manage rules, doing this via csv may be the easier and more efficient option.

Ordinary Hours

Ordinary hours are an employee's normal and regular hours or work, which do not attract overtime rates.

  • maximum ordinary hours in a day, week, fortnight or month.

  • minimum ordinary hours in a day.

  • times of the day ordinary hours can be worked (eg. between 7am - 7pm).

When entering this information into Tanda as custom rules, best practice is to create generic rules for Ordinary hours that do not specify any times or hours. This way, you can build the rest of your rules, knowing that any time a more specific rule is not apply, Tanda will always fall back to this ordinary hours rule.

In the pictured example above, a set of rules have been created or Full Time employees. Apart from breaking down the rules by day and to apply 'Full Time' employees as per best practice, the only information on this rules is that is considered ordinary hours.

By building generic rules for our ordinary hours, we've created a foundation we can then build our overtime rules on top of.


Overtime Rules

Overtime rules can be set to apply after a number of hours per day or pay period.

For example: "Hours worked in excess of the 38 hours per week are to be paid at time and a half for the first three hours and double time thereafter".

This example requires two rules to be created:

  1. Overtime after 38 ordinary hours, paid at 1.5x.

  2. Overtime after 3 hours of overtime, paid at 2.0x.

Overtime (1.5x) after 38hours

To build the first overtime rule:

  • Select Overtime as your rule type.

  • Conditions are set to apply after ordinary hours have elapsed, based on hours worked in a pay period, and hours in the overtime period is set to 38.

Overtime (2.0x) after 3 hours of overtime (1.5x)

To create the second rule:

  • Select 'Overtime' as your rule type.

  • Set conditions to apply after overtime hours have elapsed, based on hours worked in a pay period of 38 hours, and after 3 hours of overtime.

In this specific example, we looked at overtime (1.5) after 38 hours and overtime (2.0) after 3 hours of overtime. However, you can change the conditions to suit your specific arrangement.


Allowances

  1. To create a custom allowance, navigate to

    Compliance > Customise Your Setup > Allowances > Manage.

2. Click on the green + New allowance button in the top right corner:

3. First, set a Name for the Allowance and link this to your Payroll & Accounting System.

4. Next, select what type of allowance it is - Manual or Automatic:

Manual allowances require detail on who it will apply to and the rate to be paid. This will only apply when you add it to the timesheet. A common example is the travel allowance where the distance traveled (i.e. kilometers) is manually entered on the timesheet.

Automatic allowances apply whenever the conditions specified on the form are met, including factors such as the day, time and type of shift. For example, an employee can receive a laundry allowance for every shift they work.

5. Set whether you want all staff to be eligible for the allowance or whether this will only apply to specific staff with specific tags (ie, Part Time/ Casual, a specific grade of pay, etc).

6. Then, under ‘What rate is it paid at?’, select the either the ‘multiplier’ option or the ‘specific cost’ option.

Both manual and automatic allowances require a rate to be specified, which can either be a specific cost (e.g. dollar amount) or multiplier (calculated with the employee's base hourly rate).

6. When you're finished, just click Create Allowance at the bottom to save.

7. If the allowance was automatic, it should apply to the corresponding timesheet automatically should the required conditions be met. If the allowance was manual, head to the necessary timesheet and select the allowance from the blue ‘+Add’ option next to ‘No Allowances Applying’. Then, select the allowance you’ve just created from the list, enter the required number of units and hit 'Save Allowances'.


Minimum Engagement

The minimum engagement is the minimum amount of time an employee can be paid for when engaged to work a shift.

For example, if the modern award states 'The minimum daily engagement of a casual is three hours', the employee is entitled to be paid for 3 hours even if they work less than 3 hours.

If you're using a Tanda Managed Award Template, this will likely be pre-configured for you. If you need to build this rule into your account, navigate to Compliance > Custom rules > New rule.

Under Conditions, tick Minimum Shift Length and specify (a) Minimum shift length employees should be paid for.

After creating this rule, eligible staff will receive payment for 3 hours on shifts that are less than 3 hours. For example, the employee below worked 3:30-5:30pm (two hours) and this is reflected in the start and finish times. However, they are paid as if they had worked 3:30pm-6:30pm (three hours).


TOIL

Some awards and agreements allow for an employee and an employer to agree for time off to be taken instead of being paid overtime pay. This is known as 'time in lieu', 'time off in lieu', or 'TOIL'.

When TOIL can apply and how it is calculated will depend on the award or agreement. This guide will go through how to create 'time for time' rules, where the period of time off that an employee is entitled to take is the same as the number of overtime hours worked.

TOIL Accrued - Time for time

TOIL accrued is tracked through award rules. Head to https://my.tanda.co/awards to create your award rules, keeping in mind best practices for creating award rules.

When building the rules, enter the conditions that trigger TOIL accrual (e.g. after 38 hours in a week, or after 8 hours in a day). If overriding a template, the conditions will need to either be the same or more specific than the overtime rules currently applying to the staff member.

Tip: If systematic TOIL accrual is not desired, the best approach would be to set the rule to apply to 'Specific Shifts' with an Award tag that represents TOIL Accrued. Staff profiles and shifts on the timesheet would then need to be tagged to be calculated as TOIL Accrued.

The Award tag drop-down is only visible when enabled under Settings > All Settings > View all timesheet settings > Advanced.

Then, under outcomes, ensure the rate has been entered as '0' and 'Export this time as a TOIL or RDO accrual' has been ticked. This will ensure the hours are considered an accrual and will not be paid. Hours will be paid when TOIL is taken.

TOIL Taken

When accrued TOIL is taken, this would be treated like any other leave in that you'd have a Leave Type created and a leave request submitted.

A 'TOIL Taken' leave type can be created at https://my.tanda.co/awards/leave. Generally, this leave would be considered 'ordinary' hours and cost at a 1.0 pay rate multiplier.

Integrate with Payroll

How to integrate TOIL recorded in Tanda with your payroll will depend on the system. For how to integrate TOIL with Xero, see this article. For how to integrate TOIL with MYOB, see this article.


Overtime for Hours Outside of Roster

One scenario where an employee may be entitled to overtime is when they work hours outside of their rostered hours.

Using the example picture above, an employee who works beyond their rostered hours is entitled to Overtime at 1.5x for the first three hours and Overtime 2.0x after that. Two rules need to be created under Compliance > Rules to cater for this.

First three hours beyond Roster

Under Conditions, select 'After number of hours worked'. Specify here that the rule will kick in After ordinary hours have elapsed and Rostered hours.

3+ hours beyond Roster

For the second rule, under Conditions select 'After number of hours worked' again. This time, specify After overtime hours have been elapsed, Rostered hours, and enter how many overtime hours need to have passed. For the above example, we'd enter 3.

Then, on timesheets, hours worked will be compared to the roster. Hours outside the rostered hours will be paid according to the rules above.

Overtime for Hours Outside of Contract

One scenario where an employee may be entitled to overtime is when they work hours outside of the hours specified in their contract. These contracted hours typically include a start and finish time per day. These are set in the regular hours of work tab on an employee profile. See this article for more information.

Using the example picture above, an employee who works beyond their contracted times is entitled to the relevant overtime rate for the day the hours are worked.

First three hours beyond Hours in contract

Under Conditions, select 'After number of hours worked'. Specify here that the rule will kick in After ordinary hours have elapsed and Contracted hours.

3+ hours beyond Roster

For the second rule, under Conditions select 'After number of hours worked' again. This time, specify After overtime hours have been elapsed, Contracted hours, and enter how many overtime hours need to have passed. For the above example, we'd enter 3.

Then, on timesheets, hours worked will be compared to the regular hours entered into the employee's profile. Hours outside the regular hours will be paid according to the rules above.

Worked hours elapse the number of scheduled/rostered hours

An additional scenario is where an employee works hours outside of a scheduled shift, but only receives overtime when total worked hours elapse the number of scheduled/rostered hours.

Example 1

Scheduled hours: 9am - 5pm (8 hours)

Worked hours: 8am - 5pm (9 hours)

Total OT = 1 hour

Example 2

Scheduled hours: 9am - 5pm (8 hours)

Worked hours: 8am - 3pm (7 hours)

OT not applied as total hours worked is less than scheduled hours

To apply this setting, select 'Scheduled Hours' > 'Worked hours outside of rostered times' on Condition 3.a:


Setting up rules to apply to specific public holidays

You can create rules that apply to specific public holidays only. For example, the Restaurant Industry Award 2010 specifies that a 225% penalty rather than 250% penalty should apply when Christmas Day falls on a weekend.

Please note that if you are on a Managed Template in Tanda, double-check if this condition has been built in with Tanda's support team.

1. Start to create your award rule using our award rules page

You will need to:

  • name your award rule;

  • pick who is entitled to the award rule; and

  • select if it is ordinary hours or overtime hours.

See this article for guidance on creating award rules.

2. Go to 'specific day(s)' under the conditions section of the award rules page

3. Select the public holiday option

4. Specify the public holiday by starting to type the name of the public holiday

You will need to create it with the exact wording specified in your Tanda accounts pre-built holidays. You can find the exact name to tag the public holiday under General Settings.

  • Make sure you are on the 'General' tab page under Settings.

  • Select Show Pre-Built Holidays to see a full list of public holidays specified for your Tanda account.

  • Start to type the specific public holiday name that you are creating an award rule for and select the green '+ Create' button.

4. Finish creating your award rule

5. Check the award rules summary page

On the award rules summary page, you should see Specific Public Holidays show up under the Applies On column.

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