Use annual hours to tell FTE Tree how many hours make up one full-time year. Use pay grades to describe the salary ranges your organization uses for job classifications. These are separate setup tasks in Workforce Budgeting; a grade does not enter anyone’s pay.

Annual hours support labor budget and actual compensation calculations. Pay grades and ranges provide reference information for job classifications; they do not set employee pay. Position control can use ordinary Currency custom fields, but they do not receive actual compensation access protections or participate in compensation calculations.

Before you begin

Annual hours require the Manage position setup permission. Pay grades, ranges, and other global pay setup require the Manage labor budget setup permission. Actual employee compensation remains separate and requires the View actual compensation or Manage actual compensation permission.

Annual hours

Annual hours let FTE Tree compare or annualize an hourly amount. Enter the number of hours your organization uses for the applicable date; FTE Tree does not assume a value.

  1. Open Settings, then Compensation > Annual hours per FTE.
  2. Choose Add change for the first value or a genuine later policy change.
  3. Enter the effective date and approved annual hours, review the intended period, and save.
  4. Open the saved hours history. Check that the old hours apply the day before the change and the new hours apply on the start date. Correct a wrong value or date; use Void only for an entry that should never have existed.
  5. Verify an affected hourly calculation on the day before and on the effective date after results update.

For an hourly unit rate, the basic annual calculation is:

Hourly rate × annual hours per FTE × assignment FTE

Example: hourly conversion to a yearly amount

An employee earns $30 an hour. Annual hours for full-time work are 2,080, and the assignment is 1 FTE.

$30 × 2,080 × 1 = $62,400 yearly cost

At half time, or 0.5 FTE, the same hourly rate costs $30 × 2,080 × 0.5 = $31,200.

If annual hours are missing for the selected date, FTE Tree cannot complete this hourly calculation. It shows that the information is not available instead of assuming 2,080.

An hourly employee can have more than one assignment, but annual hours describe one full-time-equivalent year for the organization and date. FTE Tree multiplies the hourly rate by annual hours and then by each assignment’s FTE. Do not reduce annual hours to match a part-time assignment because assignment FTE performs that scaling.

Add a later dated value when the policy changes. Correct an existing value only when the recorded value or date was wrong. Work schedules can control adjustment eligibility; they do not replace the organization’s annual hours per FTE.

Example: a later policy change

The organization uses 2,080 annual hours through December 31 and 2,088 beginning January 1. Add a new value beginning January 1. Do not replace the earlier value, because past calculations must continue to use the hours that applied then.

When a value was entered incorrectly, use the correction action and record why. Remove a value only when it should never have existed.

Example: two part-time assignments

On a separate practice record, one employee earns $30 an hour and has two half-time assignments of 0.5 FTE each. Annual hours per FTE are 2,080.

Each assignment costs $30 × 2,080 × 0.5 = $31,200 before adjustments. Together they cost $62,400. Keep annual hours at 2,080; entering 1,040 and then multiplying by 0.5 would reduce the same hours twice.

Pay grades and ranges

Pay grades organize named compensation ranges. A range can include minimum, midpoint, maximum, basis, availability, and the date it begins. Attach the appropriate pay grade to the job classification history when your organization uses them.

Open Settings > Compensation > Pay grades, using your organization’s grade label. Choose Create pay grade, enter the grade’s identity and required setup, then open the saved grade to add its dated range and availability. Review the minimum, midpoint, maximum, and basis together before saving.

Add a later range for a real policy change; use correction or void for incorrect history. Select the grade on the intended job classification’s dated information and verify that reference there. Grade creation and range changes do not create employee-pay entries.

The minimum, midpoint, and maximum should be in ascending order and use the basis approved by your organization. A dated range allows a future policy to begin without rewriting an earlier range.

Example: dated pay range

The Coordinator II grade has a $60,000 minimum, $72,000 midpoint, and $84,000 maximum through June 30. A revised range begins July 1 at $63,000, $75,000, and $87,000.

Add the July 1 range as a new dated period. A June report continues to use the earlier policy, and a July review can use the later range.

Pay grades describe ranges. They do not set a position budget rate or replace an employee compensation record.

Keep compensation concepts separate

Information Where it belongs
Annual hours used to annualize an hourly amount Compensation setup
Named pay grade and dated range Compensation setup and the applicable job classification history
Budget rate for approved position capacity Labor budget
Protected amount for an employee or assignment Actual compensation
Reusable premium, stipend, or calculation policy Pay adjustment rules, then a dated applied adjustment for compensation
Position FTE, department, job classification, or work schedule Position control

Do not copy an employee’s amount into a pay grade, job classification note, position field, or labor budget rate. Those areas have different audiences and meanings.

Set up compensation safely

  1. Confirm the organization policy and first effective date.
  2. Add annual hours before calculating hourly labor budget rates or actual compensation.
  3. Create pay grade names that match the approved compensation program.
  4. Add dated ranges with the correct basis and ordered values.
  5. Make each grade available for the dates when it can be selected.
  6. Connect grades to job classification history when your organization uses that relationship.
  7. Test one hourly and one annual example.
  8. Review access before adding protected employee amounts.

Workforce setup administrators can maintain annual hours and general position setup. Managing pay grades and ranges requires Manage labor budget setup. Employee pay requires its separate compensation permission.

Review after a change

Confirm the new value on its effective date, review any message about affected labor budget and compensation results, and check activity when you need to confirm who changed setup.

Review a date before and after the change. For annual hours, recalculate one hourly assignment independently. For a pay grade, confirm the expected range and job classification connection. If results are updating, wait for the completed result before comparing totals.

Open Issues after an annual-hours change. If no annual-hours value has been recorded, enter the first value at your organization’s History start date, the earliest date it records. Saving a positive annual-hours value resolves missing-annual-hours issues for the dates covered by that value, until the next recorded change.

Earlier dates can still need an entry. Related budget and pay calculations update afterward. Then run a new Actual Compensation Snapshot for the affected date and verify the position result.

Form choices

Use this reference to choose form values. Available choices depend on the task, selected date, and your access.

Pay range basis

Use the same basis for the minimum, midpoint, and maximum amounts in a pay range.

Choice Meaning
Hourly The range amounts are amounts per hour.
Annual The range amounts are annual amounts for full-time work.

A range of $25, $30, and $35 means something very different from the same numbers entered as annual amounts. Check the basis before saving and keep the minimum, midpoint, and maximum in order. Changing a pay-grade range does not change employee pay or position budget rates.

Optional practice: know when these settings are needed

For exercises that change records, use a separate practice organization and complete the preparation below.

Practice steps and checks

The introductory walkthrough uses a $60,000 annual salary, so it does not need an hourly conversion.

If your team uses hourly pay, try this separate lesson:

  1. Open Settings > Compensation > Annual hours per FTE.
  2. Choose Add change.
  3. Enter your organization’s approved hours and start date.
  4. Save, then open an affected hourly calculation.
  5. Multiply the hourly rate by those annual hours to check the full-time yearly amount.

Do not reduce annual hours for a part-time person; assignment FTE handles their share.

For pay grades, create a practice grade and dated range, then choose it on a job classification. A grade describes an approved range; it does not enter an employee’s salary.