Set up pay conditions using rule sets in QuickBooks Advanced Payroll

To begin using pay conditions, you’ll first need to create a rule set. This is where you’ll define the conditions that determine how an employee is paid.

1. Select Payroll, then select Payroll Settings.
2. Under Pay Conditions, select Rule Sets.
3. Select Add.
4. Enter a name for the rule set and define the applicable period (e.g. weekly, monthly).
5. Select Save.

After creating your rule set, you can start defining the rules using the rules editor. Each rule specifies a condition and an action—for example, applying a specific pay category for work on a Sunday. Rules are evaluated in the order they appear, from top to bottom.

1. Select Create Rules next to your rule set
2. Select Add a rule
3. Define the rule by selecting a condition and assigning an action (e.g. apply the ‘Bank Holiday Overtime’ pay category to hours worked on a bank holiday)
4. Repeat this process to add as many rules as required
5. Use Reorder to drag and arrange rules in the order they should be applied
6. Select Save

Before applying the rule set, it's important to test it with sample shifts. This ensures the expected pay calculations are being applied correctly.

1. Select Test Rules next to your rule set
2. Choose a timesheet period and enter sample shifts
3. Select whether to cost the shifts using a pay rate template or a specific employee
4. Select Run Test to view the costed results
5. If needed, select Edit Rules to make adjustments
6. Once you're satisfied, select Activate Draft Rules

QuickBooks allows you to maintain both an active and a draft version of a rule set, so you can work on updates without affecting live pay runs. Once your changes are finalised, activate the updated draft again.

Once your rule set is ready, you’ll need to assign it to individual employees. This links the rule set with their timesheets for automatic processing.

1. Go to Employees, then select the employee’s name
2. Select Pay Run Defaults
3. In the Pay Condition Rule Set dropdown, choose your rule set
4. Select Save

When timesheets are imported into a pay run, the pay conditions engine will apply the assigned rule set to calculate shift costings. You’ll see an indicator in the pay run showing which rule set was used.

Conditions define when a rule should apply. Below is a list of all supported conditions and what they do:

• Always: Applies to the entire shift. Use for actions that should always happen (e.g. mandatory break every 5.5 hours).
• Or / And: Combines multiple conditions. ‘Or’ returns segments that match any condition, while ‘And’ returns only overlapping segments.
• Shift duration: Applies if the shift length exceeds a set time.
• Bank Holiday: Applies to shifts (or part of) that fall on a configured bank holiday.
• Day of the Week: Applies to shifts occurring on specific weekdays.
• Time of Day: Applies to shifts occurring during set times.
• Hours Worked: Applies to specific hours within a shift, such as the first 3 hours or after 8 hours.
• Time Period Worked: Applies once hours exceed a set amount in a defined period (e.g. 152 hours/month).
• Time Since Previous Shift: Applies based on the gap between shifts.
• First Shift of the Day: Applies only to the first shift in a day.
• Work Type / Location / Employment Type: Applies based on work type, location or employment classification.
• Pay Category: Applies to shift segments with a specific pay category (place these later in your rule set).
• Preferred Matches: Prioritises preferred or non-preferred shift features.
• Shift Spans Midnight: Applies to the part of a shift that occurs after midnight.
• Tags: Applies based on tags assigned to an employee.
• Higher Classification: Applies if part of a shift is worked at a higher employment classification.
• Time Worked: Applies based on time worked in a day, week or shift period.
• Split Shift: Applies if there are multiple shifts in one day separated by short breaks.
• Shift Start Time: Applies to shifts starting within a specific time range.

Actions define what happens when the condition is met. Some of the key actions include:

• Apply Pay Category: Assigns a specific pay category to the shift segment.
• Apply Minimum Time: Ensures minimum paid hours are met (e.g. minimum 3 hours for casuals).
• Apply Shift Breaks: Adds unpaid breaks to the shift (e.g. 30 min for every 5.5 hours worked).
• Stop Processing: Prevents further rules from applying to the shift. Useful for handling leave categories first.
• Add Allowance: Adds allowances with optional limits (per day or week).
• Add Leave Accrual: Allocates leave based on time worked (e.g. time in lieu).
• Multiple Actions: Allows more than one action to be triggered for the same condition.
• Set Rate Multiplier: Adjusts the rate multiplier for a shift segment (use sparingly; pay categories are preferred).
• Apply Tiered Overtime: Applies different pay categories at different overtime tiers.
• Apply Classification to Whole Shift: Elevates entire shift’s classification based on time spent at higher duties.
• Add Remaining Time: Fills in missing shift time to meet expected hours
• Conditional: Applies different actions based on sub-conditions (e.g. weekday vs weekend overtime).
• Add Split Shift Allowance: Adds an allowance for split shifts.
• Take Higher of Earnings or Ordinary Plus Loading: Compares shift value vs ordinary hours plus leave loading.
• Treat Breaks as Paid Time: Makes breaks part of paid time.
• Convert Units to Start/End Times: Converts time entry based on units to a full shift.
• No Break Recorded: Checks whether a break has already been added before enforcing one.