HRM-System/docs/USER-GUIDE-payroll-automation.md

End-User Guide: DOLE-Compliant Payroll Automation

This guide explains how the HRIS system automatically manages employee timekeeping, premium holiday pays, and statutory deductions during a payroll run.

How the System Works

The payroll process is designed to be fully automated. The system computes exact legal payouts without requiring you to manually check calendars or deduction tables.

1. ✅ Timekeeping Synchronization — Employees clock in and out. The system automatically calculates their exact late minutes, early outs, night differentials, and overtime based on their assigned shift.
2. ✅ Leave & Holiday Engine — The system automatically detects if an employee was absent but had a paid leave. It also checks the system calendar to see if the date was a Regular Holiday, Special Non-Working Holiday, or Rest Day.
3. ✅ DOLE Matrix Compounding — The engine applies Philippine Labor Law multipliers. For example, if an employee works overtime on a Regular Holiday that falls on their Rest Day, the system automatically compounds their rate up to 338%.
4. ✅ Statutory Deductions — When generating the final payroll, the system cross-references the employee's gross pay against the active Statutory Brackets (SSS, PhilHealth, Pag-IBIG) and deducts the exact legal amount for both employee and employer shares.

Tip

Manual Overrides Available: Need to give a fixed bonus or manual overtime amount? You can edit an employee's Salary Profile and switch their Calculation Type to "Manual Override". The system will use your exact typed amount instead of the automatic calculation for that specific component!

Payroll Automation Flow

flowchart TD
    A["Daily Timekeeping <br/> (Clock In / Clock Out)"] --> B["Calculate Actual Hours <br/> (Lates, ND, Overtime)"]
    B --> C["Generate Payroll Run"]
    
    C --> D{"Day Classification"}
    
    D -->|Ordinary Day| E["Base Rate (100%)"]
    D -->|Rest Day / Special| F["Premium Rate (130%)"]
    D -->|Regular Holiday| G["Premium Rate (200%)"]
    D -->|Regular + Rest| H["Premium Rate (260%)"]
    
    E --> I["Compute Gross Pay"]
    F --> I
    G --> I
    H --> I
    
    I --> J["Apply Statutory Brackets <br/> (SSS, PhilHealth, Pag-IBIG)"]
    J --> K["✅ Final Net Pay Ready"]
    
    style I fill:#f9a826,color:#fff,stroke:#e69500
    style J fill:#44bb44,color:#fff,stroke:#008800
    style K fill:#4488ff,color:#fff,stroke:#0044cc

---

Verification Guide

If you want to verify that the automated DOLE calculations and statutory deductions are working correctly, follow these simple steps:

How to Check the DOLE Computations

1. Go to Attendance > Attendance Records and find a log where an employee worked on a Regular Holiday or Rest Day. Note their total hours and overtime.
2. Go to Payroll Management > Payroll Runs and generate a new payroll for that specific period.
3. Open the Payslip for that employee:
   • Holiday Pay: You will see the premium amount automatically added to their basic salary. ✅
   • Overtime: If they worked OT, you will see the rate correctly compounded (e.g., 2.60 x 1.30 = 3.38 multiplier applied). ✅
4. Check the Deductions section:
   • Verify the SSS, PhilHealth, and Pag-IBIG amounts.
   • Go to Payroll Management > Statutory Brackets and cross-reference their Gross Pay against the table ranges. You will see the deduction exactly matches the bracket! ✅

Important

System Safety Guarantee: The Statutory Brackets are completely dynamic. When the government announces new rate hikes (like the recent PhilHealth increase), you do NOT need a developer. Simply go to the Statutory Brackets menu and update the percentages yourself!