Wage Matrix Configuration

Introduction

The purpose of this document is to have a step by step guide for the configuration of the wage matrix in Compas. The wage matrix shall be considered as a collection of wage elements that form part of the wage matrix and how the different elements support each other in the final objective of assigning the right Contract to the seafarer to process successfully her / his payroll in Compas by the Payroll Team.

To provide the reader with an overview of how the different elements integrate in Compas, that will be discussed in this document, please see graphic below.

This document is aimed to demonstrate to the Compas Administrator and Compas authorized users the different elements, on how they are separately set up but eventually come together.

The elements may differ based on customer requirements, hence the steps described below should be a basic guideline rather than an exhaustive set of examples applicable across all Compas users.

Wage Elements

The wage elements are the core of the wage matrix. A wage matrix is a list of wage elements placed together under one umbrella. The number of wage elements and their nature change from one client to another, hence there is no limit with the number of wage elements that can be created, neither restriction in their nature and their applicability.

The system provides the following wage elements by default for every wage matrix and hence the client does not need to create them.

• Basic Wages
• Leave Pay (Amount) – Accrual functionality for this wage element is available as per the wage matrix Leave Pay type (explained further in this document)
• Fixed Overtime (Amount)
• Overtime Hours per Month (Number of Fixed Overtime Hours per month)
• Overtime per Hour / Extra OT – Overtime Rate per hour
• Overtime per Hour (Holiday) / Extra OT (Holiday) – Overtime Rate per hour on a designated Holiday
• Holiday Rate (per day) – Rate per day on a designated Holiday
• Individual wage elements for four seniority types in Compas: Company / Rank / Vessel Type / Owner
• Allotment / Special Allotment (MPO) – For payments made to crew members, mainly via bank transfers
• Cash Advance / Communications / Slopchest: For deductions from Onboard for respective items.

Note: For the Overtime per Hour (Holiday) and Holiday Rate, the list of holidays needs to be maintained under Admin | Matrixes | National Holidays.

The Wage Elements section can be found under Admin | Payroll | Wages Elements and here the clients can create additional wage elements as required:

For the purposes of illustration, let´s assume we need to create Gas Allowance as a new wage element in the system, as the Human Resources department has required that those officers serving on LNG ships are required to be paid an additional allowance.

Once checked that there is no such wage element that refer to this specific category, we will proceed to add the new Wage Element. To do that we click on the Green Plus icon on the top left corner of the screen.

After clicking , a new window opens, where we need to provide the necessary information:

• Name: Free text to add the name of the wage element. This will be visible on the Payslip and other sections in Compas.
• Type: Allowance or Deduction, based on the nature of the element.
• Include in wage scale: Selecting Yes, this element will be available as one of the elements to include when creating a wage matrix. Selecting No, means that the element will not be available to be part of the wage matrix, but still can be granted through other functionalities in the system such as personal elements.
• Applicability: When is this element applicable as earning / deduction for the crew member. There are several options here:
  • Prorated, based on number of payable salary days per month, generally, based as 30 days as a month, can be overwritten on wage matrix level.
  • Fixed each month, independent of the number of days the seafarer has been employed
  • Fixed on full month only, only if the seafarer has been employed (on payable movements) for the full month
  • Daily, as the name suggests, the allowance / deduction will be earned on daily basis
  • Fixed - one time only, earned by the crew member only once for every voyage, depending on the Payment option configuration
  • Prorated calendar days, an earning / deduction with this applicability will be prorated only if the crew member is not employed (on payable movements) for the full month and the proration will be based on the calendar days of the month and not the standard base 30 days as a month.
• Payment options: This configuration is for how will this wage element be paid (included as earning / deduction for the crew member), what is the frequency. There options are as follows:
  • Each month, independently & prorated based on the number of days the crew member has been employed (payable movements)
  • Each full month, only paid if seafarer has been employed full month
  • Upon joining
  • Upon joining – next contract (same owner) (can be configured to be approved)
  • Upon joining – next contract (can be configured to be approved)
  • Upon sign off (can be configured to be approved)
  • Never
  • Based on guaranteed days, conditional payment of wages based on guaranteed days in the contract of the crew member
  • Payable on leave, to be used for all wages that are earned and accrued when crew member is on board and are payable when crew member is on paid leave
  • Long tenure, conditional payment of wages if crew member spends more than X days on an payable movement
  • Employee contribution
• Debit account: This is the GL account code on your chart of accounts where the wage element should be debited to. Mainly used for booking of expenses. This value can be overwritten on the wage matrix and is used as default if the wage matrix is not configured for required G/L A/c code for the wage element.
• Credit account: this is the GL account code on your chart of accounts where the wage element should be credited from. Mainly used for provisioning of funds to be paid-out. This value can be overwritten on the wage matrix and is used as default if the wage matrix is not configured for required G/L A/c code for the wage element.
• Accrual account: This is available when payment option selected is of a type that requires accrual until the amount needs to be paid-out to the crew member. For e.g. Payable on Leave. This value can be overwritten on the wage matrix and is used as default if the wage matrix is not configured for required G/L A/c code for the wage element.
• Is time bound: This refers to those wage elements which are based on time & a vessel event, for example, war risk area.
• Is grantable: A wage element may be part of the wage matrix, but the manning team can determine if the same is applicable in the contract or not. This may apply to reward the crew having higher license and pay an extra allowance to those individuals.
• Is claimable: Only applies for allowances not included in wage scales, for example administrative expenditures which can be claimed by crew members as out-of-pocket expenses.
• Sorting: The order the wage element will be displayed. If no number is entered system will alphabetically ordered.
• Wage type: This is used to determine the wage type from Singapore Tax Regime perspective and computation of CPF & other statutory contributions.
• Is taxable: If marked as Yes, the earnings under this wage element will be considered for computation of statutory contributions as per the applicable Tax Regime.
• Applicable while on board: This wage element will be paid only while the seafarer is on board, but not while he is on leave or any other payable movement. This functionality is better controlled by the Movements > Payment rules as explained further in this document.
• Percent: This allows calculation of this specific wage element as a % of another wage element. For example, Gas Allowance, should be paid at a 25% of basic wages amount. This value is for the default configuration and can be overwritten on the wage matrix.
• Remarks: Free text field to describe the details of the wage element. This information is only for internal reference and is not displayed anywhere in the system / payslip.

Once we click on Insert, the wage element is part of the available list:

Note that the Red Cross is active as this wage element has not been used by any wage matrix. Once it is added as part of a wage matrix, the possibility of deletion will be disabled.

Payment Rules

In Compas all payroll processing is determined by the movements or activities that are updated in the crew profile. Each of these movements has an associated set of rules that determine the computation of the specific wage elements.

Each Compas customer may determine which are the payment rule that apply to their crew members through the creation of the specific payment rules. For example, while the officer is on board, we can determine that she / he will be paid 4 specific wage elements, and hence, can link this rule to the On-Board movement.

To create a Payment Rule, please go to Admin | Payroll | Payment Rules.

Once open, the user will be able to see the different set of rules that are applicable to the company. Note that a company can create as many payment rules as they require, although only one is applicable (can be linked) per movement type.

The description of the icons is as follows:

Green Plus, same as before, it allows the user to add a new payment rule.

Blue Pencil, it allows the user to edit the payment rule, meaning, addition or deletion of wage elements that are applicable to the payment rule.

Red Cross, it allows the user to delete a specific payment rule.

Notepad allows the user to see the wage elements that apply under that payment rule.

To create a new payment rule, upon clicking the Green Plus icon a new window opens as below.

Enter the name you want to assign to this payment rule.

By using the Inclusive / Exclusive configuration design, the user can either select the “All except the selected” option and move the unwanted (non-payable) wage elements under the “Selected wage elements” section.

Doing this would mean that all wage elements under the “Available wage elements” section will be payable under this payment rule. This would be the Inclusive design because any new wage element created will automatically be included in the “Available wage elements” section and hence will be payable under this payment rule.

Alternatively, the user can select the “None but the selected” option and only move the required (payable) wage elements to the “Selected wage elements” section. This would be the Exclusive design because only the exclusively selected wage elements are payable under the payment rule. New wage elements created will only appear in the “Available wage elements” section and will have to be moved to the “Selected wage elements” section exclusively to be included as payable under this payment rule.

Click Save and the new payment rule is available.

Linking Wage Elements, Payment Rules, and Movements

Once the wage element is linked to a payment rule, it is time to link the rules to a movement.

All “Payable” movements will require the movement to be linked to a payment rule, and be provided with a Pay Percentage that determines how much of each associated wage element will be earned (to be paid) to the crew member for whom the movement will be recorded and payroll will be processed for the period covered by the movement.

To configure the payment rule for the movement, the same can be done from Admin > General > Movement Type. For the case of a wage being payable only while On Board, we will modify the movement On Board movement to include this new payment rule.

In the list of movement types, we select on board and click on the Blue Pencil  to edit and go on the Pay Percentage box to enter the desired value, in this case 100% for full wages to be paid and on the From field, the user can select the applicable payment rule, so when we create the wage matrix and assign to the seafarer a contract based on the wage matrix, as soon as he goes on board the right series of wage elements will be paid to her / him when the payroll is processed for the crew member.

Wage Matrix

The Wage Matrix is the engine used by Compas to create the different wages applicable to the sea staff. The wage matrix can be found under Admin | Payroll | Wage Matrix.

Once the user clicks on it, the system will open the window where all existing wage matrix created for the company are available.

To create a new wage matrix, as before, user will need to click on the Green Plus.

Once clicked, a new window will open. Note that there are five tabs as follows:

• Details: This tab is for basic details for the wage matrix
• Companies: This tab defines the applicability of the wage matrix
• Accounts: This is to map the different components in the wage matrix to specific G/L account codes, for exporting the data to the financial system.
• Other Accounts: This tab is used to configure GL A/c codes of wage elements that are not included in the Wage Matrix, but might be used by the Crew Members (such as Claimable wage elements) if the client requires to override the default GL A/c codes for such wage elements.
• Payment Rules: Same like the Other Accounts tab, the client can override the default payment rules linked to movements on this section for specific payment rules applicable as per the Eligibility of this wage matrix.

Details (tab)

• Code: This is a code that helps user to identify the wage matrix
• Description: This is a short description what the wage matrix is about
• Currency: The currency the matrix will be created. All amounts entered in the wage matrix and the contract issued to the crew member will be in this currency.
• Active: To decide if this is a matrix that users can select or not when creating a contract.
• CBA: Collective Bargain Agreement that applies to the wage matrix, in terms of leave ratio, over time, union contribution etc are configured on the CBA.
• Travel Time: To determine the payment rule applicable during travel time. This is only for payroll simulations.
• Salary days: Possible Values = [1 / 30] where 1 implies a Daily Rated wage matrix and 30 implies a Monthly Rated wage matrix. The amounts of wages elements in the wage revisions to be configured for earnings of a crew member accordingly.
• Calculate prorate based on: This defines the time basis for how payroll will be prorated for a monthly rated wage matrix. If selected salary days, system will consider the number of days input earlier per month (30) for any prorations of earnings where required. If selected as calendar days, then system will consider the number of calendar days per month for the prorations.
• Leave days calculation based on: Same as before, this determines if the system will earn (accrue) / consume salary days or calendar days as leave days per month according to the movement / activity of the crew member when payroll is processed.
  • Clicking on adjust leave pay based on leave ratio ensures that all leave wages earned and consumed are according to the leave ratio of the crew member specified in the CBA. This option is to be used ONLY if the wage matrix (revision) is configured with full month amounts for crew members who have a leave ratio lower than 1:1 AND the company intends to compute Leave days calculation based on Calendar Days.
• Leave pay type: This selection is to configure the Leave Pay option as per the company policy and the available options are as follows:
• Carry forwarded: This option will accrue the Leave Pay until the crew member is onboard and reverse the accrual upon crew member sign-off to be paid to the crew member.
• Included in monthly earnings: This option will not accrue any Leave Pay and include the Leave Pay as normal earnings for the month to be paid to the crew member.
• Moved to earnings excess: This is a variant of Carry Forward, where the client can specify X months for which the system will accrue the Leave Pay and after than the leave wages will be included in monthly earnings. The accrued wages will be reversed to be paid upon crew member sign-off.
• Payable on Leave: As the name suggests, the Leave Pay and all wage elements with this payment option, will be accrued while the crew member is on an onboard (on vessel) type of movement and will be reverse accrued when the crew member is on a on Leave payable movement where the movement is configured to pay the Leave Wages.
• Is encashable: Here, depending of company policy, user must select if office users can encash unused leave or not, as per the request from crew members.
• Allow percentage wage elements: This will allow inclusion of percentage type wage elements in the wage matrix revision.
• Account code: This is optional input, and clients can maintain any code as required by their Financial System for interface of Payroll data. This code can be included in the interface built for the client and is already available in the existing API.
• Person in charge: Select a user that will be responsible to key in the wage scale amounts without granting access to administration zone for that user.

Once the user clicks save, the additional tabs will appear.

Companies (tab)

Here the user selects the companies that this wage matrix in going to apply by moving the required companies to the “Applicable companies” section.

Accounts (tab)

The Accounts section (like Chart of Accounts) can setup the debit and credit account codes for the wage components. This section will show the default Chart of Accounts configured for the Compas in the right top corner and can be used to pre-populate the values for this section. (Kindly refer to the Payroll GL Data manual for details on this configuration).

Accrual account for leave pay can be configured here if required (depending on the Leave Pay type configured on the wage matrix).

For all pre-defined (system provided) wage elements, the wage type and taxable (Yes / No) can be set-up here. These two values will be used for Statutory Contributions computation as per Tax Regime applicability.

Other Accounts

For specific wage elements that require a specific treatment in this wage matrix, user can define hereunder which G/L account are applicable. Select the type & wage element, the specific debit, credit & accrual (where applicable) account codes from the respective dropdown and click the green plus icon to save the configuration.

The system will allocate the G/L account codes for the earnings / deductions under the wage elements accordingly while generating the GL Data for payroll processed for crew having contract based on this wage matrix.

Payment Rules

It is possible that the individuals under this wage matrix have some differences as compared with the rest of seafarers in the company. In this case it is possible to set a specific payment rules for applicable movements only for this wage matrix and specify the percentile applicable.

For example, if travelling to home is generally paid at 50% of Basic wages, however, here we can specify that for the seafarers having a contract under this wage matrix they will get paid 85% of Basic wages with the help of above configuration. The user is required to select the applicable movement type, payment rule from the available dropdowns and specify the pay percentage and click the green plus icon to save the configuration.

Note: Setting payment rule in the movement type as explained earlier applies across the system, however setting up the payment rule here only applies to crew members who have a contract based on this specific wage matrix.

Wage Matrix Eligibility

The Wage Matrix Eligibility will help us configure the applicability of the Wage Matrix. That is to say, for which crew members is this wage matrix applicable for.

To determine the applicability of the wage matrix, click on the earth icon next to the wage matrix to open a new window.

The options available here are as follows:

• Owner Pool: Generally a collection of vessels, if same is applicable as per client’s setup.
• Vessel Type: This is the classification of the vessel as per StatCode 5 as updated for each vessel on the details.
• Nationality: This wage matrix applies to, here you can select as many as required.
• Vessels: According to the options selected in the Owner Pool & Vessel Type tabs, the applicable vessels will be added to the “Applicable to” list. If any exceptions are to be made, the required vessel will need to be moved to the “Exceptions” section. Any new vessel that is added to Compas, will automatically be added to the “Applicable to” list in accordance with the Owner Pool & Vessel Type applicability of the Wage Matrix.
• Manning Office: To be setup as applicable to crew members recruited from / managed by the respective crew source.

Once all the information is created and saved in the system, it is when we can proceed to add a new revision of the wage matrix.

Adding a New Wage Matrix Revision

The Wage Matrix Revision are the different versions of the wage matrix created under the previous conditions at different stages of time, or simply, what wages are applicable at a given time.

To create a new wage matrix revision, user should click on the expand icon besides the Wage Matrix name and then click on the green plus icon.

Once clicked a new window will open as follows.

Valid from indicates when this wage matrix can be selected when creating a contract for the crew members. The default date is from next month onwards when the revision is created, this can be changed as explained further.

• Default Wage Elements: These are the standard system provided wage elements that are available for all wage matrixes & revisions.
• Applicable Allowances: These are all the allowance type wage elements created under the Admin > Payroll > Wage Elements section. User can decide those that will be part of the wage matrix by selecting the required. Percentage type wage elements will provide the default configuration as set-up when wage element was created. This can be overwritten here as per wage matrix / revision requirements.
• Applicable Deductions: Same as applicable allowances, these are all deduction type wage elements created under the Admin | Payroll | Wage Elements section. User can decide those that will be part of the wage matrix by selecting the required.

Once this has been saved, an entry for the new version has been created. The revision is currently set as “Work in progress” status.

The three icons in the entry are as follow:

• The book on the left opens the screen for wages input.
• The notebook in the middle is the Edit Revision Elements (the same window as before to define allowances and deductions). This is available ONLY until the wage revision is un-used i.e. the status is “Work in progress” or “Approved” but no contracts are issued that are linked to this wage revision. Once the wage revision is used (contracts issued), the wage elements cannot be changed any further and hence the icon will not be visible any longer.
• The magnifying glass provides the audit trail for the wage revision with details on changes made along with details on Who & When made the changes.

Clicking on the first book icon, a new window opens as follows:

This window contains all ranks available in Compas and it is where wages are assigned per rank. To add the wages on a specific rank, in this case Master, click on the green plus icon besides the rank and a new window opens as follows:

Copy wage details from: It allows the user to copy the wage details from a different rank that has been updated already. This is useful in case that the COFF and 2ENG have same wages, so when entering the 2ENG, select copy from COFF and all details are auto filled

Rank: The selected applicable rank

Note that only the applicable allowances selected during wage revision creation will appear in the screen.

Once filled, this is how the windows should look like:

Once filled for all ranks, the wage revision screen looks like this:

Now, for those cases where seniority needs to be considered, this can be done from the rank itself.

If company decides that Master have special bonus for seniority in company, then user can click on the Blue pencil  besides the rank, and the wage information for the rank Master opens, now with a new additional section at the bottom as follows:

Here the client can setup the seniority for four different types:

• Company
• Rank
• Owner
• Vessel Type

Let´s assume we want to progressively assign the seniority for 5 years with gradual increase in wages per year. The system should be configured as follows:

In this case, the crew member will not receive any seniority until she / he has attained level 1. Once the crew member attains level 1, the crew members Basic Wages will be increased by $100 and the crew member will also receive an additional $50 towards Seniority in Company. These values increase gradually as the crew member attains new levels.

Please note, the values entered for each level are ADDED to the base values as configured on the wage revision details. So, in the screenshot above, the Basic wages were configured as USD 5,600, and assuming the crew member has attained level 1 seniority, his Basic wages will be upgraded by USD 100 i.e. USD 5,700.

For details on how does a crew member attain a seniority level, kindly refer to the Seniority Configuration manual.

Once all the configurations have been done the wage revision, it can be sent to for approval clicking on the send for approval button.

The wage matrix revision will then be under “Waiting for Approval” status.

Approval of Wage Matrix Revision

The approver will need to log in Compas to approve the wage revision. The approval screen requires special permissions. The approver can find the approval screen under System | Approve Wage Revisions.

To approve, click on the book icon besides the date of applicability, and a window opens with the wage details and the options for send back for review or approve.

Once approved, wage revision status will change to “Approved” and can be assigned to contracts for the seafarers.

Now that the Wage Revision has been approved, a new icon will appear, a blue pencil icon.

This pencil allows to change the revision date, as we said earlier any wage revision created, the default applicable date is always the first day of the next month from the date of wage revision creation.

This can be changed from the screen below in case the applicable date has to be postponed OR the wage revision must be made applicable with effect from any future date.

Select the new applicable date, all ongoing contracts can be updated with the new wage revision. Filters can be used to further filter the crew for whom the new revision will be applied, for example, to specific vessel, or to all crew etc.