This feature helps organisations stay compliant with Modern Award requirements by accurately managing overtime and penalty payments. It automatically identifies hours worked before, during, or after scheduled work times, supports both start/finish and duration‑based schedules, and simplifies award policy configuration. By reducing manual calculations and minimising errors, it also ensures accurate record‑keeping to support audit requirements.
Getting Started
Prerequisites
Before you can use Hours Outside/Inside of Schedule, your system administrator must configure the appropriate award policy rules and ensure employees have work schedules assigned.
For System Administrators:
Access to Award Policy configuration.
Understanding of Modern Award requirements for your organisation.
Knowledge of which employment types require different payments for scheduled vs unscheduled hours.
Employees must have work schedules configured.
For Payroll Officers:
No additional permissions required.
Hours Outside/Inside of Schedule is applied automatically when configured in the award policy.
Employees must have work schedules assigned for the feature to function.
Note: Hours Outside/Inside of Schedule is an optional feature that must be explicitly enabled in your award policy configuration. Existing calculations continue to work unchanged unless the feature is enabled.
Understanding Hours Outside/Inside of Schedule
The Problem with Unscheduled Work
Certain Modern Awards, such as the General Retail (MA000004), require that hours worked outside of an employee’s scheduled work times be paid differently from regular hours. When an employee works before or after their scheduled shift, those hours may need to be paid as overtime or attract penalty rates.
The Is Scheduled condition would only detect whether there was a scheduled entry for the day and not any hours outside of that schedule.
Example: Overtime Calculation
Scenario | Schedule | Timesheet | Inside Hours | Outside Hours |
Early start, late finish | 9am - 5pm | 8am - 6pm | 8 hours (9am-5pm) | 2 hours (8-9am, 5-6pm) |
Early start only | 9am - 5pm | 7am - 3pm | 6 hours (9am-3pm) | 2 hours (7-9am) |
Late finish only | 9am - 5pm | 11am - 7pm | 6 hours (11am-5pm) | 2 hours (5-7pm) |
Entirely outside schedule | 9am - 5pm | 5pm - 8pm | 0 hours | 3 hours |
Entirely within schedule | 9am - 5pm | 10am - 4pm | 6 hours | 0 hours |
How Hours Outside/Inside of Schedule Works
The Hours Outside/Inside of Schedule condition compares an employee’s timesheet entries against their assigned work schedule/roster entry to determine which portions of work fall inside or outside of scheduled hours.
Step-by-step calculation:
Retrieve the employee’s work schedule/roster for the applicable date(s).
Compare the timesheet start and end times against the schedule.
Calculate the overlap (inside) or non-overlap (outside) portions.
Pass the applicable hours to child rules for further processing.
Calculation Modes
The condition supports two modes:
Mode | Description | Hours Passed to Child Rules |
Inside | Identifies hours worked within the scheduled work period | Only the portion of the timesheet that overlaps with the schedule |
Outside | Identifies hours worked before or after the scheduled work period | Only the portion of the timesheet that falls outside the schedule |
Complete Examples:
Given a work schedule of 9 am - 5 pm:
Timesheet | Mode: Inside | Mode: Outside |
8 am - 6 pm | 9 am - 5 pm (8 hours) | 8 am - 9 am, 5 pm - 6 pm (2 hours) |
8 am - 10 am | 9 am - 10 am (1 hour) | 8 am - 9 am (1 hour) |
6 am - 8 am | No hours | 6 am - 8 am (2 hours) |
10 am - 11 am | 10 am - 11 am (1 hour) | No hours |
5 pm - 9 pm | No hours | 5 pm - 9 pm (4 hours) |
Configuring Hours Outside/Inside of Schedule
Enabling Hours Outside/Inside of Schedule in Award Policies
Hours Outside/Inside of Schedule is enabled through the Award Policy configuration using the Hours outside/inside of schedule condition.
Navigate to Policies > Award Policies.
Select the award policy you wish to configure.
Add a new rule or edit an existing rule.
Select Hours outside/inside of schedule from the condition list.
Choose the mode: Inside or Outside.
Add sub-rules within the condition (such as Add Pay Item actions).
Save the award policy.
Important: The Hours Outside/Inside of Schedule condition wraps other rules (sub-rules). All sub-rules within this condition will only receive the hours that match the selected mode (inside or outside of schedule).
Using with Other Conditions
Hours Outside/Inside of Schedule is commonly used in combination with other conditions to create comprehensive award policies.
Configuration Example:
When configuring an award policy for overtime payments:
Create a rule with the Hours outside/inside of schedule condition set to Outside.
Within this condition, add an Add Pay Item action for your overtime pay item.
Create another rule with the Hours outside/inside of schedule condition set to Inside.
Within this condition, add an Add Pay Item action for your ordinary time pay item.
Example Award Policy Structure
Inside
Outside
Work Schedule Requirements
For the Hours Outside/Inside of Schedule condition to function correctly, employees must have work schedules configured. The system supports two types of work schedules:
Start/Finish Time Schedules: - Define specific start and end times for each day - Provide precise hour calculations based on exact time overlaps - Recommended for most use cases
Duration-Based Schedules: - Define only the total hours expected per day - Use proportional calculations when comparing against timesheets - Suitable when specific start/end times are not relevant
Note: When using duration-based schedules, the system will fall back to a proportional calculation method and display a warning message in the pay run. For the most accurate results, use start/finish time schedules.
How Pay Runs Use Hours Outside/Inside of Schedule
Automatic Application
Once Hours Outside/Inside of Schedule is configured in an award policy, it is automatically applied during pay run processing. No additional steps are required by payroll officers.
During pay run calculation:
The system retrieves the employee’s scheduled entries for the timesheet date(s)
For each timesheet, the condition compares work times against the schedule
Hours are separated into inside or outside portions based on the mode
The applicable hours are passed to child rules for pay item calculations
The final payment reflects the correct amounts for each category
Viewing Calculated Hours
When reviewing a pay run, the calculated hours will reflect the Hours Outside/Inside of Schedule separation. You can verify the hours by:
Opening the pay run.
Reviewing the employee’s pay details.
Checking the units column for pay items affected by the condition.
Note: The displayed units represent the hours after the inside/outside separation has been applied.
Handling Multiple Schedules
If an employee has multiple scheduled shifts on the same day (e.g., a split shift), the system will correctly handle timesheets that overlap with multiple schedule periods.
Example: - Schedule: 9 am - 1 pm and 6 pm - 10 pm - Timesheet: 11 am - 7 pm - Inside hours: 11 am - 1 pm (2 hours) and 6 pm - 7 pm (1 hour) = 3 hours total - Outside hours: 1 pm - 6 pm = 5 hours
Handling Midnight-Crossing Shifts
The system correctly handles timesheets that span across midnight by considering the work schedules for both the starting and ending dates.
Backward Compatibility
Existing Pay Policies
Implementation of Hours Outside/Inside of Schedule does not affect existing pay policies or calculations that do not use this feature.
Key points:
Existing calculations continue to work unchanged.
Hours Outside/Inside of Schedule must be explicitly enabled for each award policy rule.
There is a clear distinction between rules with and without this condition.
No existing functionality is broken by the implementation.
Migration Considerations
If you need to add Hours Outside/Inside of Schedule to existing policies:
Review your current award policies.
Identify which Modern Awards require different treatment for scheduled vs unscheduled hours.
Ensure all affected employees have work schedules configured.
Cease the current version of your award (Recommend ending to coincide with a pay period end date).
Create a new version of your award (Recommend starting to coincide with a pay period start date).
Update the relevant award policy rules to include the Hours Outside/Inside of Schedule condition.
Test the updated policies in a non-production environment.
Deploy the changes during a suitable pay period transition.
Important: When adding Hours Outside/Inside of Schedule, be aware that calculated hours may be distributed differently between pay items compared to previous calculations. Review and communicate any changes to affected employees as required.
Troubleshooting
Hours Not Being Separated Correctly
Problem: Hours are not being separated into inside/outside portions as expected
Solution:
Verify that the employee has a work schedule configured for the applicable date(s)
Check that the work schedule has the correct start and end times
Confirm the Hours outside/inside of schedule condition is configured in the award policy rule
Verify the correct mode (Inside or Outside) is selected
Review the timesheet times to ensure they are correct
No Hours Passed to Child Rules
Problem: The condition is not passing any hours to child rules
Solution:
For Inside mode: Check if the timesheet falls entirely outside the scheduled hours
For Outside mode: Check if the timesheet falls entirely within the scheduled hours
Verify the employee has a work schedule for the timesheet date
Check that the work schedule is active and not expired
Warning Messages About Duration-Based Calculation
Problem: Pay run shows warning about falling back to duration-based calculation
Solution:
This occurs when either the timesheet or work schedule uses duration-only mode (no start/end times).
The calculation will still work but uses proportional distribution.
For more precise calculations, configure work schedules with specific start and end times.
Hours Changed After Enabling Hours Outside/Inside of Schedule
Problem: Pay calculations changed after enabling the condition
Solution:
This is expected behaviour when enabling Hours Outside/Inside of Schedule.
The difference reflects the separation of hours into inside and outside portions.
Review the Modern Award requirements to confirm the new calculations are correct.
Document the changes for audit purposes.
Frequently Asked Questions
Q: Does Hours Outside/Inside of Schedule apply to all pay items automatically?
A: No, Hours Outside/Inside of Schedule must be explicitly enabled in the award policy configuration. Only pay items processed through rules with this condition will have their hours separated.
Q: Will enabling Hours Outside/Inside of Schedule change my existing pay calculations?
A: Only for pay items where the feature is enabled. Existing calculations without the condition continue to use actual hours without separation.
Q: What happens if an employee doesn’t have a work schedule?
A: If no work schedule is configured for the employee on the timesheet date, the condition cannot determine inside/outside hours. Ensure all employees have work schedules assigned.
Q: Can I use both Inside and Outside modes in the same award policy?
A: Yes, this is the recommended approach. Use one rule with Inside mode for ordinary hours and another rule with Outside mode for overtime or penalty hours.
Q: Does Hours Outside/Inside of Schedule work with duration-based timesheets? A: Yes, but the system will use a proportional calculation method and display a warning. For the most accurate results, use start/finish time-based timesheets and schedules.
Q: What happens if an employee works exactly within their scheduled hours?
A: If an employee works exactly within their scheduled hours, the Inside mode will pass all hours to child rules, and the Outside mode will pass no hours.
Q: How does the system handle split shifts?
A: The system correctly handles multiple scheduled shifts per day by comparing the timesheet against all scheduled periods and calculating the appropriate inside/outside portions.
Q: Is Hours Outside/Inside of Schedule required for all Modern Awards?
A: No, this feature is required only for specific Modern Awards that mandate different treatment for hours worked outside of scheduled times. Check your specific Modern Award requirements to determine if this feature should be enabled.
Getting Help
If you experience issues or have questions about Hours Outside/Inside of Schedule:
Review this guide for configuration and troubleshooting information
Contact your system administrator for award policy configuration questions
Refer to Fair Work Commission documentation for official Modern Award requirements
Check the online help within Definitiv for additional guidance
Contact support if you need assistance with configuration or calculations by raising a case online.