Hourly Wages and Salaries Overview

Updated February 19, 2026 15:22

Choosing the right wage type ensures accurate labor budgeting, and precise reporting. Whether managing payroll, forecasting expenses, or analyzing labor through dashboards, proper wage setup keeps your team’s finances transparent and well organized.

In 7shifts, there are three types of pay rates that can be used to calculate labor costs for employees and managers: hourly wages, weekly salaries, and annual salaries.

Choosing a Wage Type

Under an employee’s profile, you can select one of the following wage types:

Hourly Wage: The employee earns a set amount for each hour worked. Labor costs are based on scheduled or actual hours worked.
Weekly Salary: The employee earns a consistent weekly amount. Their salary is distributed across locations and departments in the Worked Hours & Wages report based on specific assignment rules. When filtered to a department where they do not appear on schedule, the Worked Hours and Wages report will explicitly show $0 salary for that employee.
Annual Salary: The employee earns a fixed yearly amount. 7shifts automatically divides this by 52 to determine the weekly distribution.

How Salary is Calculated

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:

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

Example 1: A Single Location Split

In this standard scenario, one salaried employee is assigned to two departments under a single location. (One User at $1,000/weekly)

The Results: Because there is only one location, the full $1,000 is allocated there and then split evenly between the two departments, resulting in $500 per department.
If you disable Appear on schedule for a department they were previously assigned to, that department’s past labor costs will be recalculated to reflect the new configuration:

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Example 2: Multi-Location Split

In this example, one user is assigned to multiple locations and departments. (One User at $1000/weekly)

Location A: The user is assigned to FOH and BOH departments and set to "Appear on Schedule" for both.
Location B: The user is assigned only to the FOH department and set to "Appear on Schedule".
The Results: The $1,000 salary is first split evenly between the two locations ($500 each). At Location A, it is split further between FOH and BOH ($250 each). Location B’s FOH receives the remaining $500.

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)

Flowchart showing a single user's $1500 weekly salary distribution. The salary is split evenly into $500 blocks across three assigned locations (A, B, and C), while an unassigned Location D shows $0.

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 (Total Exclusion): Dept E is not set to appear on schedule. Dept E reports $0 when filtering.

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.

Setting Weekly Salaries

Important: If you change an employee’s Appear on schedule settings after a salary has been entered, this update will retroactively adjust how their salary is distributed in historical labor data and reports.

Go to Team > [Employee Name] > Edit.
Under Wage Type, select Weekly Salary.
Set a new wage, or click Save. When saving new wage settings, be sure to re-enter the wage.

Go to Team > [Employee Name] > Wages and payment.
Under Wage Type, select Weekly Salary. When saving new wage settings, be sure to re-enter the wage.
Set the Salary amount and Effective date and click Save.

Pro Tip! You can exclude a department from receiving salary allocation by disabling Appear on schedule for that department in the employee’s profile.

Setting Annual Salaries

Go to More > My Team > [Employee Name] > Edit.
Under Wage Type, select Annual Salary.
Set a new wage, or click Save.

Go to Team > Employees > [Employee Name] > Wages and payment.
Select Change Pay
Under Wage Type, select Annual Salary.
Set the Salary amount and Effective date and click Save.

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An annual salary allows you to enter an employee’s total yearly compensation. Once entered:

The salary is automatically divided by 52 weeks.
The weekly amount follows the Location and Department Split logic defined above. That is, the amount is evenly divided across the employee's assigned Locations. Within those locations, the salary is further split between any Departments where the employee is set to Appear on schedule.
You can exclude departments from allocation by disabling Appear on schedule for that department.

Example: An employee with a $52,000 annual salary will have $1,000 distributed each week. If they are assigned to two locations, each location is attributed $500 in weekly labor costs.

Once you’ve selected the appropriate wage type, you can learn how to Update Employee Wages and Salaries