Setting up employees on an IFA, above-award pay, or an unsupported award
Most employees in Australia are covered by a Modern Award, which sets out the minimum pay rates, overtime rules, and entitlements that apply to their role. Some employees fall outside this standard setup - because they're on an Individual Flexibility Agreement (IFA), paid above their award, covered by an award PaySauce doesn't yet support, or not covered by any award at all.
PaySauce supports all of these situations through settings in the Award details section of the employee record.
Note: If an employee is covered by an award that PaySauce doesn't yet support officially, you can use the IFA settings to configure their pay rules manually.
What is an Individual Flexibility Agreement?
An IFA is a written agreement between an employer and an individual employee that varies certain terms of a Modern Award or Enterprise Agreement. IFAs must leave the employee better off overall than if the award applied, but they can change things like penalty rates, overtime, allowances, and leave arrangements to suit both parties.
IFAs are common where an employee works non-standard hours, receives a higher base rate in lieu of penalties, or has agreed to a salary arrangement in place of hourly pay.
⚠️ If an employee is not covered by any award, the same settings apply. The key difference is that PaySauce will not run an Award Comparison Test for employees with no award selected - see below for more on that.
The Award Comparison Test
For employees covered by an award - including those paid above it or on an IFA - PaySauce automatically runs an Award Comparison Test each pay run. This compares what the employee earned paid against what they would have earned under the award, to confirm they are better off overall. If the amount they are being paid differs, this is indicated next to their name in a pay run and also on their pay run details.
⚠️ If an employee has no award selected, the Award Comparison Test is not conducted and will not appear for that employee.
Overriding the award hourly rate
If an employee is covered by an award but is paid at a different hourly rate than the award default, you can set a custom rate that PaySauce will use in place of the award rate.
Open the employee record and go to the Award details section.
Select Override award hourly rate
Enter the custom hourly rate.
PaySauce will use this rate when calculating the employee's pay, while still running the Award Comparison Test against the award minimum.
Configuring IFA settings
The settings below apply to employees who are covered by an award, but are on an IFA. They allow you to configure pay rules once per employee so they are applied automatically each pay run, reducing manual processing.
Setting a default hourly rate and custom rates
Enter the employee's base hourly rate in the Default hourly rate field. This rate is used for timesheet hours with no special classification.
To add custom rates, select the + button to add a row.
Enter a name for the rate (eg. "overtime" or "public holiday") and the hourly rate value.
Note: When that name is used on a timesheet, PaySauce classifies those hours accordingly and applies the custom rate.
Leave accrual
By default, leave accrues on ordinary hours only. The following settings adjust this where the IFA requires it.
Apply annual leave loading
Select this if the employee's IFA entitles them to annual leave loading.
Accrue leave for overtime hours
Select this if the IFA requires leave to accrue on overtime hours as well as ordinary hours.
Cap leave accrual hours
Sets a maximum number of hours for which leave will accrue in each pay period. This is usually only relevant if leave is accruing for overtime hours as well as ordinary hours.
Superannuation
By default, superannuation accrues on ordinary hours only.
Accrue superannuation for overtime hours
Select this if the IFA requires superannuation to be calculated on overtime hours as well as ordinary hours.
Annual salary
Annual salary
Select this to pay the employee's ordinary hours via an annual salary rather than timesheet hours. You can still add custom rates to timesheets for any payments above the base salary.
Overtime
PaySauce can trigger overtime automatically based on rules you configure once for each employee.
Cumulative hours overtime
Select Trigger automatic overtime based on cumulative hours to automatically classify hours as overtime once the employee has worked beyond the threshold set in the Overtime threshold field under Employment details.
Enter the default overtime multiplier - for example, 1.5 for time and a half.
Daily hours overtime
Select Trigger automatic overtime based on daily work limits to automatically classify hours as overtime once an employee exceeds a set number of hours in a single day.
Enter the maximum hours per day before overtime applies.
Tiered overtime
Select Use tiered overtime if the IFA specifies a higher overtime rate after a certain number of overtime hours have been worked - for example, time and a half for the first two hours, then double time after that.
Enter the Tier 2 overtime multiplier and the number of overtime hours before the higher rate applies.
Penalty rates
PaySauce can apply penalty rate multipliers automatically based on when hours are worked. You can configure separate rules for weekdays, Saturdays, and Sundays.
For each day type you want to configure, select the relevant option and enter:
Rate multiplier
For example, 1.25 for 125%.
Apply to whole day
Select this to apply the penalty for the entire day.
Start and end time options will be removed if this is selected
Start and end time
The hours the penalty applies to
Hour inclusion/exclusion
Apply penalty inside these hours
Ticked = Penalty applies to hours worked between the start and end times.
Unticked = Penalty applies to hours worked outside those times. Before the start time or after the end time.
Note: You can specify penalty rates for
Monday to Friday penalty rate
Saturday penalty rate
Sunday penalty rate
Common questions
Does PaySauce run the Award Comparison Test for employees on with No Award selected?
Does PaySauce run the Award Comparison Test for employees on with No Award selected?
No. If the employee has an award selected and is on an IFA, PaySauce compares what they were actually paid against what they would have earned under the award, to confirm they are better off overall. If no award is selected, the test is not run.
What's the difference between cumulative and daily overtime?
What's the difference between cumulative and daily overtime?
Cumulative overtime triggers once an employee has worked more than a set total number of hours in a pay period. Daily overtime triggers once they exceed a set number of hours in a single day. You can use one or both depending on what the IFA requires.
Can I use these settings for an employee with no award?
Can I use these settings for an employee with no award?
Yes. All IFA settings are available for employees with no award selected. The only difference is that the Award Comparison Test will not be conducted for those employees.
What happens if I don't configure penalty rates or overtime?
What happens if I don't configure penalty rates or overtime?
PaySauce cannot apply them automatically. You would need to manually classify hours or add adjustments when processing each pay run. Configuring these settings upfront is the most efficient approach for employees with non-standard arrangements.