Salaries

In Odoo, salaries are calculated and determined by five factors: salary structure types, salary structures, rules, rule parameters, and other input types. Together, these determine how each employee’s pay is calculated.

Each structure type contains one or more structures within it. Each structure contains a set of rules, and every rule uses parameters to define how specific amounts are calculated. Additional inputs, (such as bonuses or deductions) can also be included to adjust the final salary.

When payslips are calculated, Odoo calculates the employee’s worked time from their work entries, then applies the relevant structure, rules, and parameters from the employee’s assigned structure type to determine their total pay.

Structure types

In Odoo, a structure type groups related salary structures. When a contract specifies a structure type, only the structures within that type are used to calculate the employee’s pay. Each structure type houses individual structures within them, each containing a set of rules for processing a timesheet entry.

Structure types define key aspects of payroll configuration, including how often employees are paid, their working hours, the default salary structure, and whether wages are fixed (salary-based) or variable (hourly-based).

Example

A structure type called Employee contains two different structures within it: a Regular Pay structure which includes all the separate rules for processing regular pay, and an End of Year Bonus structure, which includes the rules only for the end of year bonus. Both belong to the same Employee structure type.

View existing structure types by navigating to Payroll app ‣ Configuration ‣ Structure Types.

Two default structure types are preconfigured in Odoo: Employee and Worker.

Typically, Employee is used for salaried employees, which is why the Default Wage Type is a Fixed Wage, and Worker is typically used for employees paid by the hour, so the wage type is Hourly Wage.

Note

If using a country-specific payroll localizations, it is recommended to use the structure in the corresponding country localization document.

New structure type

If the default structure types do not meet the company’s needs, go to Payroll app ‣ Configuration ‣ Structure Types and click New to create a custom structure type.

Warning

When creating a new salary structure type, ensure all local and national laws are accounted for. Confirm with the accounting department when configuring payroll structures, to ensure all requirements are met.

Proceed to enter the following information in the fields:

• Structure Type: Enter the name for the new structure type, such as Employee or Worker.

• Country: Select the country that the new structure type applies to from the drop-down menu.

• Wage Type: Select the wage type for the structure:

  • Fixed Wage: For salaried employees who receive the same wage every pay period.

  • Hourly Wage: For employees paid based on hours worked during a pay period.

• Default Scheduled Pay: Select the typical pay schedule for the new structure type from the drop-down menu. This indicates how often this specific type of structure is paid out.

• Default Working Hours: Select the default working hours for the new structure type from the drop-down menu. All available working hours for the currently selected company appear in the drop-down menu. The default working hours are the Standard 40 hours/week option. If the needed working hours do not appear in the list, a new set of default working hours can be created.

• Regular Pay Structure: Type in the name for the regular pay structure. It is used as the default option when generating payslips.

• Default Work Entry Type: Select the default work entry type which is used to create all work entries for the employee.

New default working hours

To make new default working hours, type the name for the new working hours in the Default Working Hours field on the new structure type form. Click Create and edit. A default working hours form pops up. The default working hours form has two sections: a general information section, and a tab listing all the individual working hours by day and time. When the form is completed, click Save & Close.

• Name: Type in the name for the new default working hours. This should be descriptive and clear to understand, such as Standard 20 Hours/Week.

• Flexible Hours: Tick the checkbox to let employees adjust their start and end times while maintaining the same total daily hours.

• Company Full Time: Enter the number of hours per week an employee needs to work to be considered a full-time employee. Typically, this is approximately 40 hours, and this number affects what types of benefits an employee can receive, based on their employment status (full-time vs part-time).

• Average Hour Per Day: Auto-populated based on the working hours in the Working Hours tab. This entry affects resource planning by determining how many resources can be used per workday.

• Work Time Rate: This percentage is auto-generated based on the entry for the Company Full Time and the working hours configured in the Working Hours tab. This number should be between 0.00% and 100%, so if the percentage is above 100%, it is an indication that the working times and/or Company Full Time hours need adjustment.

• Company: Select the company that can use these new default working hours from the drop-down menu. Leave this field blank if the hours are available for all companies.

• Timezone: Select the time zone to be used for the new default working hours from the drop-down menu.

• Working Hours Tab: This tab is where each day’s specific working hours are listed. When a new default working hour form is created, the Working Hours tab is pre-populated with a default 40-hour week, with each day divided into three timed sections.

  Each day includes morning (8:00–12:00), lunch (12:00–13:00), and afternoon (13:00–17:00) periods, configured using the 24-hour time format.

  To adjust any of these hours, click the field and modify the time using the drop-down menus, or type the desired time directly.

  Note

  Working hours are company-specific, and cannot be shared between companies.

  Tip

  If the working hours are not consistent each week, and the hours are on a bi-weekly schedule instead, click the Switch to 2 week calendar button at the top of the new default working hours form. This changes the Working Hours tab to display two weeks of working times that can be adjusted.

Structures

Salary structures are the different situations in which an employee could be paid within a specific structure, and are specifically defined by various rules.

The number of structures a company needs for each structure type depends on how many different ways employees are paid, and how their pay is calculated. A common example of an additional structure is a Bonus.

To view all the various structures for each structure type, go to Payroll app ‣ Configuration ‣ Structures.

Each structure type lists the various structures associated with it. Each structure contains a set of rules that define it.

Click on a structure to view its Salary Rules. These rules define how the payslip will be computed for the employee.

Note

After installing a payroll localization, relevant structures are installed and appear in this list.

Salary rules

Each structure has a set of salary rules used to compute the various amounts considered in the pay. These rules are configured by the localization and affect the computation of the salaries.

Warning

Modification or creation of rules should only be done when necessary.

To view all the rules, go to Payroll app ‣ Configuration ‣ Rules. Click on a structure (such as Regular Pay) to view all the rules.

To make a new rule, click New. A new rule form appears. Enter the following information in the fields.

Top section

• Rule Name: Enter a name for the rule. This field is required.

• Category: Select a category the rule applies to from the drop-down menu, or enter a new one. This field is required.

• Code: Enter a code to be used for this new rule. This field is required.

• Sequence: Enter a number indicating when this rule is calculated in the sequence of all other rules.

• Salary Structure: Select a salary structure the rule applies to from the drop-down menu, or enter a new one. This field is required.

• Active: Enable this toggle so the rule is available for use. Disable the toggle to continue to show it on the payslip, but skip the computation.

• Appears on payslip: Disabling the toggle will still show the rule on the payslip, it will just not be computed.

• View on Employer Cost Dashboard: Tick the checkbox to have the rule appear on the Employer Cost report, located on the Payroll app dashboard.

• View on Payroll Reporting: Tick the checkbox to have the rule appear on payroll reports.

General tab

Conditions

• Condition Based on: Select from the drop-down menu whether the rule is Always True (always applies), a Range (applies to a specific range, which is entered beneath the selection), Other Input (the condition is entered beneath the field), or a Python Expression (the code is entered beneath the selection). This field is required.

Computation

• Amount Type: Select from the drop-down menu whether the amount is a Fixed Amount, a Percentage (%), Other Input, or a Python Code. Depending on what is selected, the fixed amount, percentage, other input, or Python code needs to be entered next. This field is required.

Company contribution

• Partner: If another company financially contributes to this rule, select the company from the drop-down menu.

Description tab

Provide any additional information in this tab to help clarify the rule. This tab only appears in the rule form.

Accounting tab

• Debit Account: Select the debit account from the drop-down menu the rule affects.

• Credit Account: Select the credit account from the drop-down menu the rule affects.

• Split account line based on name: Tick the checkbox to split the accounting entry according to the payslip line name.

• Not computed in net accountability: If checked, the amount of the rule is shown independently from the net salary, to allow for better reporting in the Accounting app.

Rule parameters

Rule parameters inform Odoo how to calculate each line of a payslip. To view the configured rule parameters, navigate to Payroll app ‣ Configuration ‣ Rule Parameters.

All rule parameters are displayed. Click on an individual rule parameter to view the details.

Each rule parameter displays the name of the rule, the code, when the rule is active, and the parameter value.

Example

The rule parameters for overtime pay inform Odoo that employees receive time and a half when working over 40 hours.

Other input types

When creating payslips, it is sometimes necessary to add other entries for specific circumstances, like tips, commissions, expenses, or deductions. These other inputs can be found by navigating to Payroll app ‣ Configuration ‣ Other Input Types.

If a new input type is needed that does not appear on the list, click the New button to create a new input type. Enter the Description, the Code, and select which structure it applies to in the Availability in Structure field.

Tick the Available in attachments checkbox if the input should be a salary attachment.

Important

The Code is used in the salary rules to compute payslips. If the Availability in Structure field is left blank, it indicates that the new input type is available for all payslips and is not exclusive to a specific structure.