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:

To create a formula for a custom item:

1. Enter a Formula by starting with an “=”.
2. 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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