About pay categories

V1 pay categories enable you to define simple and static payments.

For example, you can use a V1 pay category to define the following, and more:

• Fixed components of employee salaries, such as basic salary and living allowances.

• Standard allowances or benefits with a financial component provided to employees as a salary addition or deduction, such as a monthly telephone allowance or annual gym membership allowance.

V1 pay categories are legacy features of the platform and are very simple to configure and implement. However, they have limitations; you cannot use them to define payments that involve conditions or customized calculations.

V2 pay categories enable you to define payments that involve conditions and complex customized calculations. When using a V2 pay category, you can specify when, whom, and how much to pay, with fine-grained control.

For example, you can use a V2 pay category to define the following, and more:

• An annual airfare allowance that depends on destination (home country) and years of service. A V2 pay category enables you to calculate and automate the amount that needs to be paid to different employees.

• Approved expense reimbursements. A V2 pay category enables you to include approved reimbursement amounts in employee salaries.

You can use scripting to implement the conditions that determine how pay amounts are calculated in different cases. When configuring V2 pay categories, you can enter scripts in the relevant fields. The platform supports industry-standard scripting languages such as JavaScript and Python.

The ability to add scripts is the main difference between configuring V1 and V2 pay categories.