• Travel: Traveling for work can be onerous, and flight delays or road work can sometimes push the travel time into night shift territory. Additionally, when employees are assigned to a normal shift that takes place during night hours, any holiday, vacation, or travel pay will be calculated based on their normal scheduled shift. We examine how well software options perform in the areas that matter most, including features, pricing, and support. Thank you for signing up. Get trustworthy advice to help your business grow. Enter your email to get this free report, “The Top 25 Tax Deductions Your Business Can Take – And 5 You Can’t.”. Alternatively, if you use an absolute amount per hour, like with Marty Martinson, you can simply multiply that amount by the night hours worked and add it to the salary for the pay period. Employees will receive either an absolute increase in pay per hour or additional money calculated as a percent of base pay in exchange for working graveyard shift hours. Are you paying employees late or have employees earning overtime? There is actually no night shift differential law in the U.S. for private companies. Check out these alternative options for popular software solutions. Let's explore what else is available. You’ll be getting our best advice soon! We’ve done the expert research, so you don’t have to. Night Differential. When you work hours in excess of the standard work period, you are due additional pay for working overtime. It is computed as a percentage of the employee's rate of basic pay (including any applicable locality payment or special rate supplement). Employees who always work third shift and are paid more receive what is called “night pay” because they do not have a different base pay that is increased during night hours. Let’s say that your employee’s hourly rate is Php 57.00 and they report for work during the hours covered by the Night Differential premium. 'p.m.' Here’s what his timecard looks like: Marty worked 16 total night shift hours, which added $80 to his paycheck. Find out what you need to look for in an applicant tracking system. For example, if an employee worked from 2 a.m. to 10 a.m., their entire pay for the shift would be increased by 10% because six of the eight hours they worked took place during night work hours. Step 5: Calculate. Our full review breaks down features, customer support, pricing, and other aspects of this platform. Their employees usually have shifts overnight and these shifts are affected by the Night Differential. Now let’s investigate what happens when Kate’s hourly rate changes. If they are scheduled for night work with no bump in pay, they may start looking for normal day shift work elsewhere. To calculate his night shift differential, first calculate his total base pay: Next, multiply the night shift hours by the night shift differential to find the total night shift pay: FInally, add the night differential to his base pay for the total pay: $1,000 base pay + $80 night differential = $1,080 total pay. Night pay is a 10 percent differential paid to an employee for regularly scheduled work performed at night. This process is fairly simple, and your payroll software should be able to calculate it automatically. Marty Martinson typically works from 9 a.m. to 5 p.m. for LP Security. The key is consistency. Payroll deductions are based on the total pay. In this article, we’ll go over how to do payroll for night shift work. Start by calculating the implied wage per hour by dividing the employee’s salary by 52 to get the salary per week and then by 40 to get the salary per hour. However, it can be difficult to recruit employees for these undesirable hours. Easily save this report to your computer or print it at any time. Night shift differential is premium pay paid to a GS employee at a rate equal to 10 percent of his or her hourly rate of basic pay. All rights reserved. 10to8 is a cloud-based appointment scheduling software that simplifies and automates the process of scheduling, managing, and following up with appointments. Please verify that the email is valid and try again. Determine if the night shift differential will increase holiday pay and if employees who are normally scheduled to work the night shift but get it off for a holiday will be paid their base pay or the night shift differential. If you don’t currently have a night shift differential policy, but you have night work planned, start thinking about instituting one. Instead it pays it for the whole shift if the majority of hours worked for the shift take place in the period. Here’s what his timecard looks like: Marty worked a total of 16 night shift hours for this week. Shift diff refers to 3-11p and 11p to 7a and is a per hour rate, no difference with overtime. Payroll software helps companies manage payroll and benefits processing. That’s why our editorial opinions and reviews are ours alone and aren’t inspired, endorsed, or sponsored by an advertiser. The U.S. Department of Labor requires that all non-exempt employees receive overtime pay for excess hours worked, even if the employee is on a fixed salary. For the past 25+ years, The Motley Fool has been serving individual investors who are looking to improve their investing results and make their financial lives easier. Additionally, make sure to schedule work empathetically. Make sure to develop an easy-to-understand policy for how payroll works with night differential and keep it consistent every time it’s applied. According to the U.S. Department of Labor, “Extra pay for working weekends or nights is a matter of agreement between the employer and the employee (or the employee's representative). A guard who … See how your choices perform when evaluated side-by-side. It might be time to outsource your payroll. Please try again. Additionally, make sure to schedule work empathetically. The jewelry store offers a 10% differential for second shift hours and a 20% differential for overnight hours (a night differential). Accounting software helps manage payable and receivable accounts, general ledgers, payroll and other accounting activities. Our 2021 GS Pay Calculator allows you to calculate the exact salary of any General Schedule employee by choosing the area in which you work, your GS Grade, and your GS Step. There was an error signing up. For a lot of people, that is several months of car payments or two months’ rent. There is actually no night shift differential law in the U.S. for private companies. Paying employees a shift differential is an effective way to overcome staffing challenges. If they are scheduled for night work with no bump in pay, they may start looking for normal day shift work elsewhere. Decide if this situation qualifies for night shift differential pay. Payroll deductions are based on the total pay. Compensation may impact where products are placed on our site, but editorial opinions, scores, and reviews are independent from, and never influenced by, any advertiser or partner. Choose the one that makes the most sense to you. 1) There is no need to enter time as 'a.m.' Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage. Instead it pays it for the whole shift if the majority of hours worked for the shift take place in the period. Night differential, on the other hand, goes to employees who only occasionally receive extra money for working shifts between certain hours. Looking to grow your skills? Timesheets for Night-shifts Excel Timesheets to calculate Nightshifts. Now you’re down to the final week, and there’s no way you can get everything done without some people working through the night. Eventually, you will only be able to schedule employees for night work if they couldn’t find a better job. Trump just signed off on a second COVID relief package, and it includes a lot -- such as simplified PPP loan forgiveness. That’s how we make money. Shift differential pay is different from the basic pay that goes to night shift workers. It includes tools to organize employee payment information, track vacation time, and assist with employee onboarding. in any of the boxes. Imagine working on a difficult project for a difficult customer. This review will help you understand what the software does and whether it’s right for you. Night differential is an increase in pay to compensate employees for working night shifts. Do you sometimes wonder why call center agents have salaries higher than some employees? Marty Martinson typically works from 9 a.m. to 5 p.m. for LP Security. A good example to go by is the federal government’s night differential pay program. No matter how well you plan ahead, you may sometimes need to hold employees over through the night shift. If you decide to use differential pay for night shift work, there are a few special situations to keep in mind: Let’s work through an example of night differential. Employees may be happy for extra hours, but they won’t be happy having to be at work at 10 p.m. How can you sweeten the pot for those who stay late? Night differential is an increase in pay to compensate employees for working night shifts. According to the Office of Personnel Management, federal employees earn an extra 7.5% for working between 3 p.m. and 11 p.m. and an extra 10% for working between 11 p.m. and 8 a.m. Step 2: Calculate your night differential as a two-year total. Night differential is an increase in pay to compensate employees for working night shifts. CoConstruct is easy-to-use yet feature-packed software for home builders and remodelers. Set strict policy guidelines for which hours earn the differential and stick to those hours. However, this can be abused if you're not careful. Editorial content from The Blueprint is separate from The Motley Fool editorial content and is created by a different analyst team. One of the reasons is the night shift differential pay. 12 hours over time is similar:12/day or 40/week, etc. This process is fairly simple, and your payroll software should be able to calculate it automatically. A Small Business Guide to the Second COVID Relief Package, What You Should Know About Payroll Advances. Weekends–Saturday and Sunday–are usually allotted as rest days. For salaried workers, use the same formula to calculate the differential pay. You can choose whichever hours and pay differential you think works for your company. How to calculate shift differential Shift differentials come in three forms: a percentage of basic hourly pay, a dollar amount per hour, or a dollar amount per shift. How to Calculate Night Shift Differential Pay. Night differential is an increase in pay to compensate employees for working night shifts. Our comprehensive guides serve as an introduction to basic concepts that you can incorporate into your larger business strategy. Even if you aren’t playing favorites, any hint that some employees earn different amounts because of careless application of differential pay can lead to malcontentment among your staff. In this article, we’ll go over how to do payroll for night shift work. Not sure how to use a particular tool in your software solution? This guide will help you find some of the best construction software platforms out there, and provide everything you need to know about which solutions are best suited for your business. Marty worked a total of 16 night shift hours for this week. The Author and/or The Motley Fool may have an interest in companies mentioned. In fact do not enter 'a.m.' The simplest formula to compute the night shift differential is: NSD = (Hourly rate * 10%) * number of hours worked from 10PM to 6AM It is to be emphasized that the Labor Code only provides the minimum required payments. This article would tell you how Night Differential work. 3) Shift Differential. Employees will receive either an absolute increase in pay per hour or additional money calculated as a percent of base pay in exchange for working graveyard shift hours. How to Calculate Overtime Differential. To determine the employee Night Differential pay: Ordinary Day Night Differential = (Hourly rate × 10% × 8 hours) Php 45.60 = (Php 57.00 × 0.10 × 8 hours) Rest day Night Shift In this 12-page report, we've outlined the top 25 business tax deductions you could be taking (and 5 to watch out for)! If you decide to use differential pay for night shift work, there are a few special situations to keep in mind: • Holiday pay: Holiday pay is generally 1.5 or 2 times normal pay. The Motley Fool has a Disclosure Policy. The employer or the union may have higher premium through an … The value of 2:30 is the start shift hours (1:00) plus the end shift hours (1:30) If you make an extra $80 for 20 weeks out of the year, that’s $1,600 straight into your bank account. Choosing the best applicant tracking system is crucial to having a smooth recruitment process that saves you time and money. Make sure to develop an easy-to-understand policy for how payroll works with night differential and keep it consistent every time it’s applied. The government does not pay the differential per hour worked in those time periods. However, all else being equal, the majority of your employees will see night shift work as more difficult to deal with. You can see that you arrive at the same number regardless of the method you use. Company executives use differential cost analysis to choose between options to make viable decisions to impact the company positively. Every employee is entitled to a Night Differential or Night shift pay of not less than 10% of his regular wage for each hour of work performed between 10pm and 6am. The $80 increase in the above example may not seem like much, but it adds up. We've tested, evaluated and curated the best software solutions for your specific business needs. Our experts take you through step-by-step processes, providing tips and tricks to help you avoid common pitfalls along the way. Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. We’ll discuss when a night differential is required, how much the pay increase should be, and how to calculate it. Businesses operating day and night need employees who are willing to work evening or late shifts. We may receive compensation from some partners and advertisers whose products appear here. A: No, the only thing to keep in mind is that when you work a regularly scheduled shift on Sunday night that is part of your basic 40-hour workweek each form of premium pay, that is the Sunday differential and the Night differential, is figured independently. 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