Salary grades and step rates

Salary Grades establish the minimum and maximum salary for a job according to the job's pay frequency. You select a salary grade when you set up a job code. You can set two types of salary grades:

  • Range is used to determine the salary range for employees based on the job they perform. If you select to validate the salary grade (on the HR setup page when you set up your employer), the system verifies that the salary you enter for a employee's job does not fall below the minimum or exceed the maximum salary set for that employee's salary grade.

  • Steps can be used in conjunction with salary grades. A salary grade range can consist of several steps, which indicate job service (number of months) and the pay rate for an employee when they reach a step in the salary grade range. The combination of job service and an associated pay rate is called a Step Rate. Step rates are used to provide pay equity; employees are paid according to the job and their seniority; not according to their specific performance. Step rates are often used in union organizations and government entities.

    Step rate increases are not automatic. To increase an employee's pay when they reach a step, you must manually run the Mass Update Step Rate Service and then the Mass Update Pay Step Rate process.

  1. Select Setup > Codes > Employees > Jobs > Salary Grades or Setup > Codes > Canadian Employees > Jobs > Salary Grades.
  2. On the Salary Grades page, click Add.

  3. On the Salary Grades Detail page:

    1. Enter a Code and a Description (such as "Exempt-$33.6-52.2K/yr.")
    2. Select the Pay Frequency.
    3. For Grade Type, select whether the salary grade uses a Range or a Step.
    4. If the salary grade is a step type, enter the number of Steps in Grade. For example, an hourly salary grade might have four steps when an employee's pay will increase. The rate for each step is specified in the Step Rates code table.
    5. Enter the minimum and maximum pay rate for the salary grade.
    6. Click OK to save the code.
  4. On the Salary Grades page, notice that the new code is now included in the code table.
  1. Select Setup > Codes > Employees > Jobs > Step Rates or Setup > Codes > Canadian Employees > Jobs > Step Rates.
  2. On the Step Rates page, click Add.

  3. On the Step Rates Detail page:

    1. Select the Salary Grade for the step you are adding. The Steps in Grade displays the number of steps for that salary grade.
    2. For Step, enter the number of the step you are adding. For example, if the salary grade has four steps, you will first add step 1. After setting up that step, you will add step 2, and so forth.
    3. Enter the number of Months employees must perform in the job that uses this salary grade before they can receive a pay increase (to the next step). This is often called job service.
    4. Enter the pay Rate employees receive when they are on this step of the salary grade.
    5. Select the pay frequency for the pay rate.
    6. Click OK to save the step.

  4. On the Step Rates page, notice that the new code is now included in the code table.

    Repeat steps 2 and 3 for each step for the salary grade.