Compensation components define the types of pay your company uses. Instead of selecting a generic compensation type and configuring its payout rules separately every time, you can create reusable components with predefined categories, payout types, and frequencies.
For example, you can create components for:
monthly base salary;
hourly base pay;
one-time referral bonus;
monthly fixed allowance;
quarterly variable bonus;
recurring insurance deduction.
When a component is assigned to an employee, its category, payout type, and frequency are inherited from the component. The administrator only provides the employee-specific details supported by that component, such as an amount, currency, dates, or earning period.
This approach helps maintain consistent compensation structures and prevents unsupported payout and frequency combinations from being assigned to employees.
Understand compensation components
Every component belongs to one of four categories:
Base compensation: an employee’s core salary or wage.
Additional compensation: bonuses, allowances, commissions, and other pay provided in addition to base compensation.
Adjustment — addition: an amount added to an employee’s pay, such as a salary advance or correction.
Adjustment — deduction: an amount deducted from an employee’s pay, such as repayment of an advance or an insurance contribution.
All components are managed from one page, allowing administrators and payroll managers to review the complete company compensation structure in one place.
Understand payout types
The payout type determines how a compensation component is assigned and paid:
A once-off component represents a single payment. For example, a referral bonus, a project-completion bonus, a one-time salary correction, etc.; No recurring schedule is configured for a once-off component.
A recurring-fixed component represents the same amount paid or deducted on a defined schedule. For example, a monthly salary, a monthly transport allowance, a quarterly fixed bonus, a monthly insurance deduction, etc. The frequency is configured in the component and inherited when the component is assigned to an employee.
A recurring-variable component (available only for additional compensation) represents compensation where an employee is eligible to receive a payment regularly, but the actual amount varies between periods. For example, a monthly sales commission, a performance bonus, an entitlement-based variable allowance, etc. Instead of adding an amount when assigning the component, the administrator first creates an entitlement in the employee profile. The actual amount is then recorded as a separate entry for each applicable period.
Create a compensation component
Go to Settings > Compensation components.
Click Add.
In the Parent group field, choose one of the available categories: Base compensation, Additional compensation, Addition, Deduction. The selected category determines which payout types and configuration fields are available.
Enter a clear name that identifies the pay element.
Enter an optional internal code used to identify the component in reports, exports, or integrations.
Optionally add a description that explains when and how the component should be used.
Select the payout type. The available payout types depend on the selected component category:
Base compensation uses the recurring fixed type only.
For additional compensation, select once-off, recurring fixed or recurring variable
For adjustments, select the supported once-off or recurring-fixed option.
For a recurring-fixed or recurring-variable component, select how often it applies. Available frequencies may include options such as hourly, daily, weekly, monthly, quarterly, half-yearly, yearly.
For a once-off component, no recurring frequency is required.
When creating a base-compensation component, select the compensation calculation method for how the employee’s base-pay amount should be calculated.
Click Save. To create another compensation component immediately after saving the current one, enable Create more, and PeopleForce opens a new component form after saving, so you can continue creating components without returning to the list.
Edit a compensation component
Open a component from the Compensation components page to update it.
After a component has been created, you can edit:
Name
Code
Description
These restrictions protect existing employee records from being changed into a different compensation structure after the component has already been used.
To use another category, payout type, or frequency, create a new component instead.
Assign compensation to an employee
The process is similar for base compensation, once-off and recurring fixed additional compensation, and adjustments. To add a compensation component to an employee:
Open the employee profile.
Go to the Compensation tab.
Click the + Add action and select a compensation component or open the relevant compensation section and click + for the required payout type.
Select the compensation component. The category, payout type, frequency, and other structural settings are inherited from the component and cannot be changed in the employee record.
Enter the employee-specific details, such as the amount, currency, dates, or earning period. The fields depend on the selected component:
Base compensation - enter the employee’s amount, currency, and effective date.
Once-off additional compensation - enter the amount, currency, and payment date.
Recurring fixed additional compensation - enter the amount, currency, start date, and, when applicable, an end date.
Once-off adjustment - select type, enter the amount, currency, and past earning period.
Recurring fixed adjustment - select type, enter the recurring amount, currency, and applicable period.
Save the record.
Add recurring-variable compensation
Recurring-variable compensation uses a different process from once-off and recurring-fixed compensation.
First, create an entitlement that confirms the employee qualifies for the component. Then add the actual payment amount as an entry for each applicable earning period.
Create the entitlement
Open the employee profile.
Go to Compensation → Additional compensation.
Open the Recurring variable payout type section and click the +.
Select a recurring-variable compensation component.
Set the entitlement dates. For example, an employee may be entitled to a monthly sales commission beginning on January 1. The entitlement does not contain an amount. It records that the employee is eligible to receive this compensation during the specified period.
Save the entitlement.
Add an entry
After the actual amount is known:
Open the created recurring-variable compensation item.
Click + Add.
Provide the earning period. The earning period must fall within the entitlement period. PeopleForce prevents entries that do not match the entitlement dates.
Recurring-variable entries are recorded for past earning periods because the amount is normally determined after the employee’s performance for that period is known.
Enter the amount and currency.
Save the entry.
You can also open the recurring-variable compensation item to review all entries recorded against the entitlement. The history provides a complete record of the actual amounts earned in each period.
