Constraints

If you decide to include OWP Ord in the configuration to determine the highest weekly rate at which annual leave will be paid, it's important that you understand the following constraints of the Affinity system:

OWP Ord is not currently stored as a calculated value anywhere in the system.
OWP Ord does not yet include enduring payment values. If you have employees with enduring payments, you'll need a manual process to check those payments whenever those employees are paid annual leave rates.

OWP Ord Affinity calculation

If you've chosen to include OWP Ord in the configuration to determine the highest weekly rate at which annual leave will be paid, this is how Affinity calculates the OWP Ord weekly value every time a pay run is processed:

Employee's rate 1 * employee's standard hours per week

Both data points are what was in the system at the time the pay run was processed (the value is not stored).

When a manual process is needed

If any of the following scenarios arise, you'll need a manual process to determine if an employee is paid annual leave and if they should be paid using OWP Ord in the compared weekly rates. This involves calculating the OWP Ord value manually and if necessary, overriding the system-calculated rate.

The employee has enduring payments that are not included in the current version of the calculation.
The employee's rate 1 changes, this is back-dated, and the effective date is prior to the leave starting or the employee terminating.
The employee's standard hours per week change, this is back-dated, and the effective date is prior to the leave starting or the employee terminating.
Any enduring payments that form part of OWP Ord have changed (added, updated, ceased), and the effective date is prior to the leave starting or the employee terminating.
The employee is waged, and their standard hours per week and rate 1 are based on average hours over multiple cycles. Here, the employee's OWP Ord would be based on their average hours over multiple schedules. If no agreement has been made with the employee, you may need a manual process to calculate the OWP Ord value.
The employee is salaried and their standard hours per week are based on the longest week in the cycle. In this scenario, the employee's OWP Ord would be based on the longest week in their work pattern. If no agreement has been made with the employee, you may need a manual process to calculate the OWP Ord value.

OWP Ord manual calculation

Now you know what OWP Ord includes under the Act and how to determine whether OWP Ord or OWP4 should be used — and you've decided to do manual calcs — your next task is to do the manual calculation for OWP Ord and work out the payments to be included.

Because of the many different payment types that can be included in OWP Ord — each with varying payment and calculation rules — there are just too many calculations to show you. Instead, we suggest that you get familiar with the basic formula, bearing in minds that the payments included in any OWP Ord calculation will impact the end result.

The calculation

To manually calculate OWP Ord:

Determine what the leave start date is.
Get the employee's rate 1 and standard hours per week that were in effect when the leave started.
Multiply rate 1 by standard hours per week from step 2.
For every enduring payment that needs to be included in OWP Ord, calculate the equivalent weekly payment value that was in effect when the employee's leave started.

Example

John gets paid $35 for every ordinary hour worked and his contracted/agreed standard hours per week are 40. His OWP Ord base is $35 * 40 = $1,400
John is on a monthly pay cycle and receives a payment for the same $500 value each month. This needs to be recalculated to be a weekly amount. The most accepted method is to take the amount paid per pay cycle, multiply it by the total number of pay cycles in a year, then divide that value by 52: ($500 * 12) / 52 = $115.38461
John receives a payment that is paid based on the number of hours worked. His standard hours per week are 40 and the payment is $0.90 per hour. You need to multiply the per-hour value by the standard hours per week: $0.90 * 40 = $36
John receives a payment of $15 that is paid for every day worked. He normally works 3 days per week. You need to multiply the per-day value by his agreed/contracted days worked in an ordinary week: $15 * 3 = $45
Once you have calculated the value of OWP Ord base (covered in step 1), and the value of all the other payments to be included in OWP Ord (steps 2 to 4), you need to add these values up to get the value of OWP Ord: 1,400 + 115.38461 + 36 + 45 = 1,596.3846
The result in step 5 is what is compared to the other weekly rates depending on what you have configured, but this is not the rate the employee will be paid for the leave taken. More about that here.

Where to next

From here, you can do one of the following:

Continue with your annual leave payment calculations.
Learn about OWP Ord that is not configured.
Learn all about OWP4.
Learn more about AWE.

Calculating OWP

Table of contents

Introduction