# Project Plan: Payroll Parallel 2 Fixes

## Context & Recommendations
1. **Daily Wage Configuration Recommendation:**
   - **Pay Frequency:** `daily`
   - **Payroll Type:** `automatic`
   - **Statutory Contributions:** Encode their **Full Monthly Amount** in the Salary Components tab. Our new logic will automatically divide this by the Payroll Run frequency (e.g., divide by 2 for semi-monthly runs). This prevents double-deductions.
2. **Overtime Logic:** Overtime will be strictly tied to an approved record in `overtime_applications`. Automatic calculation from late clock-outs will be disabled for payroll generation.
3. **Night Differential:** ND will revert to standard computation (10% of the employee's standard hourly rate) without being inflated by phantom OT.

## Phase 1: Statutory Deductions Divisor (Double Deductions Fix)
- Modify `PayrollService.php` to derive the `$divisor` from `$payrollRun->payroll_frequency` instead of `$employee->pay_frequency`.
- Ensure a `semi-monthly` payroll run correctly applies a divisor of `2` regardless of whether the employee is `daily` or `monthly`.

## Phase 2: Overtime Approval Enforcement
- Update `PayrollService.php` to fetch `overtime_applications` for the date range where `status = 'approved'`.
- Calculate Overtime Earnings *only* using the `approved_hours` from these explicit applications.
- Ignore the raw `overtime_hours` tally stored in `AttendanceRecord`.

## Phase 3: Night Differential & Leave Reflection Fix
- Verify Night Differential multiplier correctly targets the base hourly rate.
- Update UI template or API responses if necessary to ensure the custom `Paid Leaves` earnings array item correctly displays on the payslip PDF.

## Phase X: Verification
- Regenerate a test payroll run for Dinh Chavez and verify SSS/PH/PI deduct exactly half of the encoded monthly amount.
- Verify Dinh Chavez receives 0 Overtime pay since no approved application exists.
- Verify Night Differential calculates perfectly at `(Hourly Rate × 10%) × ND Hours`.
- Verify Birthday/Vacation leave appears explicitly in Earnings.