This article explains how to set up and manage pay groups in Personio Payroll.

What are pay groups?

Pay groups are organizational units within a company that make it possible to define and make more flexible the payroll process for different employee groups. This allows you to separate employees with a fixed salary from those paid hourly and, if necessary, release and pay groups at different times within the same payroll month. 

All employees must belong to exactly one pay group. The groups must be mutually exclusive and complete. Employees for whom no suitable group criterion applies, such as no stored basic salary, are automatically assigned to a separate group, so that no employee is excluded from payroll. 

Before you begin

Make sure you have the necessary permissions and are registered as an administrator to manage the payroll settings.

Please note:
The pay groups in the Manage tab under Payroll are exclusively available for German payroll accounting and can only be configured within a company. 

Product limitations

• Access rights management: Different access rights per pay group are not currently supported. All Personio payroll managers with access to the company can see all groups.
• Grouping criterion : Pay groups currently only support grouping by remuneration type. Grouping by other attributes (e.g., department, cost center, location) is currently not possible.
• Different payroll periods: Pay groups do not support different payroll periods (example: July 15 to August 14). Only calendar months are supported.
• Scope (legal entity): All employees in a pay group must belong to the same legal entity (company). Extended scenarios (example: multiple company numbers within one company) are not currently supported.
• Switching between groups : An employee cannot be moved to a different group after the contribution estimate has been sent. Changes will only take effect retroactively in the next payroll period. 

Setting up pay groups in Personio Payroll 

General

To set up and manage pay groups, the following three steps must be performed: 

1. Create a pay group: Specify whether you want to use pay groups and allow the groups to be created automatically based on the basic remuneration stored in the profile. 
2. Set release date: Define a release date for each pay group. 
3. Set up contribution estimation and complete setup: Check and confirm the contribution estimationsettings, review all configurations in the overview, and complete the setup.

Please note:
Settings for pay groups cannot be changed as long as individual groups have already been approved for payroll. The settings can only be adjusted again once all pay groups have been released.

Create pay groups 

To set up a pay group for a company in Personio Payroll, proceed as follows:

1. Click on Payrollin the main navigation menu. 
2. Switch to the Manage tab > Payroll Processing . 
3. Under Pay Groups, click Edit . 
4. In the pay group configuration options, select whether 
   • no pay groups used or 
   • whether payroll runs should be created according to the type of remuneration .
5. Click on Next.

The pay groups are now automatically formed based on the basic remuneration. You can adjust the base salary accordinglyin the employee profile under Salary > Base Salary . Once the pay groups have been successfully created, you can proceed with the configuration. 

Please note:
If no base salary has been entered for an employee, they will appear in the group "no base salary". 

Set release date

To set up individual release dates for each pay group, proceed as follows: 

1. After creating the pay groups, you will be automatically redirected to the approval reminder .
2. Choose a separate release date for each pay group or use the latest possible release date.
3. Confirm the settings by clicking Next. 

Please note:
For compliance reasons, Personio Payroll cannot recommend a specific release date. Choose a date that fits your payroll processes.

Setting up contribution estimation

Should you use pay groups for a company:

1. Read the settings for contribution estimation and select how they should be submitted.
2. Confirm the settings and complete the setup. 

Important information regarding automatic contribution estimation:

• Contribution estimates are always sent for the entire legal entity at once. They are not sent per pay group.
• If there are still open blockers for a particular employee, either the last known value is used or 0 is set. This will be offset again at the beginning of the following month with the next contribution estimate.

For information on how to manage contribution estimates in Personio Payroll, please see our article on the topic.

Manage pay groups

Payroll run view

With the introduction of pay groups, a new, uniform payroll run view is also available to you. This consolidates employees, tasks, and documents into an overview per pay group.

• Month-based navigation: Month-based navigation: First, select the current payroll month and then navigate to the relevant group.
• Overview of all payroll runs : An overview shows the status of all pay groups for the entire month.
• Historical payroll runs : You can access past periods via the month-based navigation.
• Widget status: Shows the payroll status at a glance, at group and monthly level.

Documents and approval

The following documents will be available to you after the payroll runs have been released:

• Amount certificates and SEPA files are generated for each pay group at the respective time of release and are available in the Documents tab of the group view.
• Company-level documents, such as gross-net reports, are only available after all groups have been released. In the Documents tab of the parent view, you can download them using the Download All button after they have been fully released.

FAQ

Who can use pay groups? 

Pay groups are available to all Personio Payroll (Germany) customers. This function is optional and can be set up in the Manage tab under Payroll.

Do I need to use pay groups? 

No. Pay groups are optional. If you do not set up groups, all employees will be processed together in a single payroll run, as before.

What is the fallback group? 

The fallback group automatically includes all employees who cannot be assigned to a defined pay group. This includes, for example, people without a specified remuneration type. This ensures that no employee is excluded from the payroll.

Can an employee belong to multiple pay groups? 

No. The groups are mutually exclusive. Each employee belongs to exactly one pay group.

Can I create groups based on criteria other than the type of compensation (e.g., department or cost center)?

No, that's not possible in this version. Grouping by additional attributes is planned for future releases.

Do I need to activate pay groups to use automatic contribution estimates? 

No. The automatic sending of contribution estimates is available to all customers who use contribution estimates – regardless of whether pay groups are set up.

Can I download documents for a single group before all groups are released? 

Yes, group-specific documents (payroll statements, SEPA files) are available from the moment of group release. Company-level documents (e.g., gross-net, SVBA, contribution statement) are only available after all groups have been fully released.