HRM-System/docs/PLAN-payroll-parallel-2.md

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.