This article will introduce you to the basic setup of ADW and how Workstem achieves the calculation of vacation pay through ADW. It includes specific explanations for these items to help users/users distinguish them: Average Daily Rate, ADW Income Current Month, AND ADW Workdays Current Month.

1. Enter "Payroll" > "Settings" > "Average Daily Wage(ADW)" > "Settings"

2. Edit New ADW Settings

Choose whether "public holidays" or "statutory holidays within 3 months of employment" are included in the calculation of average wages

Add income items (income increase and income decrease) that are included in [ADW average Wage]

Please refer to the relevant information on wages in the Employment Ordinance:

Wages means all remuneration, receipts, allowances (including transport allowances, work-hours allowances, commissions, overtime pay), tips and service charges paid by an employer to an employee in the form of money for work done or to be done by him, regardless of the name or method of calculation, but excluding:

1. The value of shelter, education, food, fuel, water, electricity or medical care provided by the employer;

2. Employer's contribution to employee Retirement Schemes;

3. Commission, Labour allowance or Labour bonus in the nature of a gift or at the discretion of the employer;

4. Non-recurrent travel allowance, the value of any travel concessions or the actual cost of the employee's work-related travel expenses;

5. Payments made by an employee to an employee for special expenses arising out of the nature of his work;

6. Year-end gratuity or annual bonus in the nature of a gift or at the discretion of the employer;

7. Gratuity payable upon completion or termination of an employment contract. The end of year payment, maternity pay, paternity pay, severance pay, long service payment, sickness allowance, holiday pay, annual leave pay and payment in lieu of notice payable to an employee are calculated according to the above definition of wages.

Generally, the Average Daily Rate is calculated by dividing the total salary earned by the employee in the past 12 months by the number of working days in the past 12 months (based on ADW Average salary income setting). If the historical salary data of the user is less than 12 months or if the historical salary data is not provided, How will Workstem be evaluated and calculated?

Case 1:

The user's salary record is more than 12 months old; Average Daily Rate = total ADW Income Current Month of the past 12 months before the Current Month (excluding the Current Month)/total ADW Workdays Current Month

Case 2:

The user's salary records are less than 12 months old, assuming that there are X months of salary records; Average Daily Rate = total ADW Income Current Month of the past X months before the Current Month (excluding the Current Month)/total ADW Workdays Current Month

Case 3:

Users do not have historical salary records; The Specified ADW () function was used to process this by returning the Specified ADW on the first day of the Specified holiday, in conjunction with the current Specified pay item, normally used in the calculation of 4/5 continuous sick leave pay.

Among them, the Specified ADW () function also exists in three cases, in which the compensation record prior to the leave application date has been 12 months; Less than 12 months; No record of remuneration; The calculation rules and methods are the same as above, but the time range of the value is the salary record before the day of leave application. If there is no salary record, the ADW Income Current Month/ADW Workdays Current Month of the Current Month (excluding the day of leave application) is used. Example:

4/5 Pay Sick Leave Addition formula

Var a = SpecifiedADW()value = a * 0.8

4/5 Pay Sick Leave Deduction formula

value = BasicSalary/MonthlyPayrollBaseDays()*SickLeaveConsecutive4Days

(Basic salary/monthly paid days * 4/5 continuous sick leave days)

As for the calculation method of 4/5 Pay, the logic of the system is as follows: first, the salary of the days of Leave shall be fully deducted by 4/5 Pay Sick Leave; then, 4/5 Pay Sick Leave Addition shall be used to give the employee 4/5 of ADW's vacation Pay.

Note ❗ :

After setting the formula, the "Adjust the order of items" can be seen in the upper right corner of the Pay Item setting interface. Click the "Adjust the order of items" to see the list of all Pay items.

The order of all Pay items is based on ADW. Var a = SpecifiedADW(); Pay Sick Leave Payment 4/5 Pay Sick Leave Payment. Therefore, the system values of Pay items in the first order need to be obtained first. If you are not sure whether the order of Pay items in the list is correct, click "Smart Sort" to adjust. Otherwise, the Pay item value may be 0.

First-time Payroll Setup
​Pay Run: One-time/Add new
​How to Add Different Fixed Pay Items to Employees Included in Same Payroll Policy?