How are weekly salaries calculated?

Question

How does 7shifts allocate weekly salaries for salaried employees across reports and payroll?

Answer

7shifts calculates and allocates weekly wage rates by distributing weekly salaries across all seven days of the week based on employee assignment settings, or across five days when using 7shifts Payroll.

Why This Happens

Labor Reports (Reporting page)

In 7shifts labor reports (i.e., Actuals report, Worked Hours and Wages report), wage allocation depends on the Locations and Departments assigned to the salaried employee.

• The daily salary amount applies regardless of whether the salaried employee is assigned a shift.
• As long as the salaried employee remains assigned to the Location, the daily salary amount applies each day regardless of whether the employee is set to appear on the schedule.

For example, when sorting labor reports (i.e., Actuals reports, Worked Hours and Wages report) by Location, the full salary allocation for the Location applies equally to each day of the week. 

This diagram illustrates the labor cost allocation for a manager earning a $1000 weekly salary. If a manager is assigned to only two departments under a single location, the labor cost for each department is allotted as $500.

A weekly salary of $1000 divided by 7 days equals $142.86 per day.

The Labor Budget Tool (Schedule page)

In the Labor Budget Tool on the Schedule page, wage allocation applies to salaried employees who have the Appear on schedule option enabled in assignment settings.

• If the "Appear on schedule" setting is disabled, the employee's salary will not reflect in actual or projected labor calculations.
• The employee's daily salary appears in previous actual labor values in the Labor Budget Tool.
• The employee's daily salary appears in future labor projections in the Labor Budget Tool.
• 7shifts does not break down salary hourly in the day view of the Labor Budget Tool.

When a salary is entered, 7shifts "slices" the total weekly amount to attribute labor costs to the correct areas of your business. The system follows this hierarchy:

1. Location Split: The weekly salary is divided evenly across all Locations the employee is assigned to.
2. Department Split: Within each location, the salary is divided evenly across only the departments where the employee is set to "Appear on schedule."
3. Daily Split: The resulting department amounts are spread evenly across all 7 days of the week.

Example 1: A Single Location Split 

Example 2: Multi-Location Split 

Example 3: $0 Reporting Logic 

The following diagram illustrates how salaries are distributed in more complex scenarios. Specifically how the "Appear on schedule" toggle can result in $0 salary reporting for specific departments. (One User at $1,500/week)

1. The Location Split (Filtering by Location)

In this example, the a user's $1,500 total is split three ways:

• Location A: $500
• Location B: $500
• Location C: $500
• Location D (Not Assigned): $0

2. The Department Split (Filtering by Department)

• Location A (Even Split): Dept A and Dept B are both set to Appear on Schedule. The $500 is split into $250 each.
• Location B (Single Allocation): Only Dept C is set to appear on schedule. Dept C receives the full $500, while Dept D reports $0.
• Location C (Full Allocation): Dept E is not set to appear on schedule. However, because it is the only department assigned in this location, Dept E receives the full $500. The salary must be allocated to an assigned department.

Note: As shown in Location B and Location C, if an employee is assigned to a department but the toggle is turned OFF, that department will surface $0 in the Worked Hours and Wages report to ensure labor data is accurate.

7shifts Payroll

When using 7shifts Payroll, the calculation for weekly salaries is based on 5 workdays to reflect standard workweeks. This behavior differs from the Labor Budget Tool and labor reporting, which distribute weekly salaries evenly across all 7 days of the week.

What To Do 

To configure how 7shifts allocates salaried wages across days and tracking tools, manage user assignments within employee profile settings:

1. Assign the salaried employee to the specific locations and departments where the weekly salary should be allocated.

2. Toggle the option to appear on the schedule within employee assignment settings to include or exclude the salaried employee from the Labor Budget Tool.