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This article explains how to create and manage premiums for your employees in the Salary tab of the employee profile.

What are premiums in Personio Payroll?

Personio Payroll allows you to automatically determine premiums and process them in payroll. Premiums in Personio Payroll are added payments for special work conditions like working on public holidays or night shifts. SFN premiums for working at these times are (partially) tax-exempt and not subject to social security contributions. Different premium rates apply depending on the times worked. The premiums feature in Personio Payroll:

• Calculates the hourly rate based on the effective salary for employees who do not receive an hourly salary.
• Calculates SFN premiums based on recorded and approved working hours and public holiday calendars.
• Allows you to add SFN premiums manually.
• Automates the payroll of SFN premiums.
• Lists SFN premiums in payroll and payroll documents.

You can review and manage SFN premiums in the employee profile's Salary tab. 

• Under Balances, you will see an overview of an employee's premiums per month. 
• Under Settings, you can view the calculated hourly rate and activate automatic calculation based on working hours.

Product limitations

The automatic premiums management feature does not currently support the following:

• Daylight saving time: Daylight saving time is currently not considered when working hours are recorded. Therefore, automatically generated bonus payments whose working hours overlap with a change from summer to winter or vice versa could be calculated incorrectly. Please check such premiums separately and adjust them if necessary. option.
• Custom public holiday calendars : This function checks public holidays against the public holiday calendars stored in Personio. For custom public holiday calendars, ensure that public holidays are set up as public holidays and custom holidays as custom holidays.
• Night shift: Time tracking does not currently support multi-day attendance periods, for example, B. Night shifts. The employee has to enter two attendance periods: one on day one, ending at 12:00 AM, and one on day two, starting at 12:00 AM.
• Imported breaks: Breaks with fixed start and end times are required for the calculation of premiums. Imported breaks without these times cannot be considered for the automatic calculation of premiums. We recommend that you check the imported working hours for premiums on break times and edit them if necessary. relevant information.
• Show premiums in other features: Premiums are shown in the Salary tab of the employee profile, in payroll, on payslips, and on payroll documents . They are currently not available for reports.

Possible premium types

The following table shows a list of the predefined premium rates for Sundays, public holidays, and night work:

Premium types	Description
Night (category 1)	25% premium from 8:00 PM to 6:00 AM and from 8:00 PM to 11:59 PM
Night (category 2)	40% premium from 12:00 AM to 4:00 AM (applies if work started before 12:00 AM)
Sunday	50% premium from 6:00 AM to 8:00 PM
Sunday + night 1	75% premium from 12:00 AM to 06:00 AM and 8:00 PM to 11:59 PM on Sundays
Sunday + night 2	90% premium on Sundays or Mondays from 12:00 AM to 4:00 AM  (applies if work started before 12:00 AM)
Public holiday (category 1)	125% premium on public holidays from 6:00 AM to 8:00 PM and on 31 December from 2:00 PM to 8:00 PM
Public holiday (category 2)	150% premium on 25 and 26 December, 1 May, and 24 December from 2:00 PM to 8:00 PM
Public holiday 1 + night 1	150% premium on public holidays and on 31 December from 12:00 AM to 6:00 AM and from 8:00 PM to 11:59 PM
Public holiday 1 + night 2	165% premium on public holidays, the day following a public holiday, and 31 December from 12:00 AM to 4:00 AM (applicable if work started before 12:00 AM on the previous day)
Public holiday 2 + night 1	175% premium on 25 and 26 December, 1 May from 8:00 PM to 6:00 AM, and 24 December from 8:00 PM to 12:00 AM
Public holiday 2 + night 2	190% premium on 25 and 26 December, 1 May, and the day following a public holiday from 12:00 AM to 4:00 AM (applies if work started before 12:00 AM)

How are premiums calculated?

Premiums calculated automatically by Personio are based on an employee's hourly rate. The respective premiums rate is added to these. If an employee is paid an hourly salary, this is the applicable hourly rate. If they receive a fixed salary, the hourly rate is calculated from the effective salary as follows:

• (Monthly effective salary) / (4.35 * weekly working hours of the employee) = hourly rate

You can view the hourly rate in the Premiums settings.

Manage premiums in the Salary tab

Options to create premiums

In the Salary tab of the employee profile, you can manage premiums for individual employees. You can choose between manually created premiums and automatically calculated based on attendance data. You can also use both options. The options differ as follows:

Manage premiums based on time tracking

Enable calculations based on time tracking

To use automatically calculated premiums based on recorded and approved working hours, you first need to activate the feature for the employee. This involves the following steps:

1. Go to Employee profile > Salary > Premiums.
2. Open the widget and go to the configuration page.
3. Enable the calculation of premiums based on time tracking.
4. The setting is saved automatically, and the date from which the setting is effective is displayed.

Automatically add extra premiums based on time tracking

If the calculation of SFN premiums based on time tracking is enabled, the feature automatically creates premiums based on approved attendance periods. You can:

• Enter manually in Personio.
• Import in bulk.
• Use via the API.

Edit and delete a premium

Premiums that are based on tracked working hours cannot be edited or deleted in the Salary tab. To edit or delete them, you need to either edit or delete the tracked working hours in the Attendance tab. The automatically calculated premium payment only changes if the time on which the premium is based is changed. 

Manage manually created premiums

Add a premium

To add a premium for an employee, follow these steps:

1. Go to Employee profile > Salary > Premiums.
2. Open the widget and go to Balances.
3. Click on Add premium and fill in the window with the required information. In the premiums window, enter the following information:
4. Add the new premium.

Edit a premium

Note
Note that changing a premium after the payroll has been approved will trigger a correction in the next open payroll period.

To edit an employee's premium, follow these steps:

1. Go to Employee profile > Salary.
2. Under Salary Components in the Premiums widget, click Manage.
3. Under Premium records, select the premium you want to edit or delete.
4. Click the pencil icon.
5. Make the required changes. Note that the premium type cannot be adjusted.
6. Save your entry.

Delete a premium

Note
Note that deleting a premium after the payroll has been approved will trigger a correction in the next open payroll period.

To delete an employee's premium, follow these steps:

1. Go to Employee profile > Salary.
2. Under Salary Components in the Premiums widget, click Manage.
3. Under Premium records, select the premium you want to delete.
4. Click the bin icon.
5. Delete the premium.

Premiums in payroll

Display premiums in payroll

If premiums have been added for an employee, this is also reflected in the payroll. You'll find:

• People tab: The total of the premiums added to the gross salary column. You also have the option to add the total premiums as a separate column to the payroll table.
• the employee's detail view: The premiums for one-time compensations are listed under Gross salary . The total is also shown there. From here, navigate directly to the Salary tab for more information.
• The payslip preview: Check it either in the detail view or in the Documents tab. The premiums are listed individually here.