Blog Article:
Payroll systems’ importance to shift planning

Article written by Thomas Aagaard,
Head of Business Development at PDC.

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Business development manager of workforce management solutions


Working with shift planning, I have generally come across two types of payroll systems into which our shift planning system must integrate.

  • Clocking-based payroll systems: The payroll system receives your time registrations and calculates your pay. The advanced salary system handles rules and interpretations of the applicable agreements and calculates the correct salary based on this.
  • Counter-based payroll systems: The payroll system receives calculated shift values from external source. In other words, the shifts must be interpreted and valued before they can be transferred to the payroll system. This interpretation can be done manually – or by means of our shift planning system.

Calculating salaries for hourly workers and employees without a collective agreement is a relatively easy task and you can therefore use both types of payroll systems. If, on the other hand, the rules for calculating overtime and allowances are complex, it requires in-depth knowledge of rules and collective agreements. Here, a clocking-based payroll system will be a good choice since it ensures uniform interpretation. Individual interpretations are avoided, and IT calculations are usually very fast, online, and less flawed.

Manual routines

Unfortunately, only few payroll and financial systems have collective agreements and interpretations built in and therefore the calculated values must be transferred through manual entry. It places a significant and often tedious workload on salary staff. It also involves a high degree of risk of errors since there is a lot of data to keep track of, and there are often many ways to report changes such as post-its, spreadsheets, timesheets, etc., which can be difficult to understand. Confusion can also easily arise about e.g. the chronology.

Automatic salary calculation in shift planning system

The salary calculations can advantageously be automated and done in the shift planning system and preferably at the same time as the plans are rolled out and published. Wage costs can then be included as a factor in shift planning. In addition, changes can be calculated, and you can make sure that the data available is always updated.

Simple shift planning systems can easily calculate the hours and handle simple overtime rules, keep track of illness and holidays, and make sure that data is sent to the payroll system. But more complex calculations can rarely be handled. The specific and complicated rules for allowances, e.g. weekend/evening/night, overtime in different degrees, availability, and rules for time off, require special configuration in the shift planning system.

As an employer – in larger shift planning systems – you are able to offer your employees transparency in the calculations by giving them access to see how their allowance is calculated – both when the shift schedule is published and when changes are made.

Calculation of future wage costs

Since a payroll system by nature is always retrospective, it is difficult to say anything sensible about the costs in a future period. But it is possible in the larger shift planning systems.

The shift planning system calculates the cost of a shift the moment it is entered into the schedule. The salary is based on the rules applied to the employee in question, and the planner quickly and easily gets an overview of the upcoming period’s hourly pool and salary costs. In other words, you are able to see both how much can be produced and what the cost will be. This applies in cases where the plans are relatively stable, but also in the fluctuating cases where the starting point for the planning is “what is to be produced”. The latter can provide greater variation in staffing needs, distribution of tasks and ultimately wage costs for the period.

PDC Plan is able to integrate with both types of payroll systems and send both clocking data and calculated payroll data. PDC Plan calculates all changes online and therefore everyone with access to the system will always have the correct, accurate data available for decisions – also in the future.

Thomas Aagard,
Head of Business Development

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