*Payroll Setup > Company Setup > Formulas*

# Basic Formulas

This page provides more information about the use of formulas when creating custom items. To learn more about custom items, go to:

Payroll Setup > Company Setup > Custom Items

To create a formula for a custom item:

- Enter a
by starting with an “=”.**Formula** - You can then also enter variables, numbers and basic mathematical operators such as +, -, *, /, and ( ).

Examples of basic formulas that could be entered in the * Formula *field are the following:

- = normal_rate * 40 * 25
- = (basic_salary + normal_pay) / 4.3333 * 0.3333

Variables which can be used when creating formulas are:

- basic_salary: Basic Salary (salaried employees)
- normal_pay: Basic Hourly Rate (hourly paid employees)
- normal_rate: Hourly Rate
- shifts_worked: Number of shifts worked
- total_income: Total income
- min: Used to select the lowest of the values in the list provided to it
- max: Used to select the highest of the values in the list provided to it

Example 1: Levy An employer must make a contribution that is 0.32% of the employee’s hourly pay, with a maximum contribution of $4.26. Since there is a maximum, the formula must select the lowest of option (1) which is $4.26 and option (2) which is the employee’s pay multiplied by 0.32% = min(4.26, (normal_pay*0.0032)) Example 2: Trade Union deduction An employee must make a contribution of 1% of their hourly pay, plus $1.80. The minimum contribution is $9.13 and the maximum contribution is $16.73. = min(16.73, (max(9.13, (normal_pay*0.01)))) + 1.80 |

# “IF” Statements

## General IF statements

The **IF** function returns one value if the specified condition is true and another **IF** false. The **IF statement** is also known as a logical formula: If, then, else. If** **something is true, then do this, else/otherwise do that.

The **IF** statement works as follows:

`if (condition, true statement, false statement) `

**For example:** Suppose that the company deducts a staff social fund contribution based on how much an employee earns. If the employee’s salary is greater than $1 000, then the contribution is $10, but if the employees earns less than $1 000, then the contribution is $8.

The formula will be written as:

= if (basic_salary>1000, 10, 8)

This means that if the basic salary is greater than 1 000, the result will be 10 and if it’s less it will be 8.

## Nested IF statements

A **nested IF statement** is an **IF** **statement** within an **IF statement**. It works as follows:

`if ( condition, true statement , ( if ( condition, true statement, false statement) ) `

**For example:** Suppose that the company deducts a staff social fund contribution based on how much an employee earns. If the employee’s salary is greater than $1 000, then the contribution is $10, but if the employees earns between $500 and $1 000, then the contribution is $8, and if they earn less than $500 it is $6.

The formula will be written as follows:

= if (basic_salary>1000, 10, if (basic_salary<500, 6, 8)

This means that if the basic_salary is greater than 1 000, the result will be 10. Otherwise, if the salary is less than 500, the result will be 6, otherwise it will be 8.

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