Definitiv ensures employees are paid their contracted hours even when actual hours fall short, supporting compliance with Modern Award minimum hour requirements. Top‑up hours are consistently paid at the base Pay Policy Rate, avoiding penalty rates or proportional adjustments. The system automatically calculates and distributes top‑up hours across the pay period and correctly applies pro‑rata calculations for employees who start or leave mid‑period, reducing manual effort and payroll risk.
Getting Started
Prerequisites
Before you can use Top Up to Contractual Hours, your system administrator must configure the appropriate award policy output rules. This feature is configured at the award policy level and applies to specific pay items within the policy.
For System Administrators:
Access to Award Policy configuration..
Understanding of Modern Award requirements for your organisation.
Knowledge of which pay items should count towards contractual hours.
A designated pay item for the top-up hours (Optional).
For Payroll Officers:
No additional permissions required.
Top Up to Contractual Hours is applied automatically when configured in the award policy.
Employees must have the Hours in a Working Week field populated in their Pay Policy.
Note: Top Up to Contractual Hours 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 Top Up to Contractual Hours
The Problem with Shortfall Hours
Certain employment arrangements and Modern Awards require that employees receive payment for a minimum number of contracted hours per pay period, regardless of whether they actually worked those hours. When an employee works fewer hours than their contracted amount, the shortfall must be made up.
Example: Weekly Contractual Hours Calculation
Scenario | Contracted Hours | Actual Hours Worked | Without Top Up | With Top Up |
Employee works 5 short days | 40 hours/week | 29 hours | 29 hours paid | 40 hours paid |
Employee works 3 full days | 40 hours/week | 24 hours | 24 hours paid | 40 hours paid |
Employee works full week | 40 hours/week | 42 hours | 42 hours paid | 42 hours paid |
How Top Up to Contractual Hours Works
Top Up to Contractual Hours automatically calculates the shortfall between actual hours worked and contracted hours, then creates additional transaction with the nomination pay item to make up the difference. The top-up hours are always paid at the Employees Pay Policy Rate as at the end of the calculation period.
Step-by-step calculation:
Determine the employee’s contractual hours for the pay period from their Pay Policy.
Multiplies against the pay calendar weekly factor if per Pay Cycle is configured.
Calculate the total actual hours worked from applicable pay items.
If actual hours are less than contractual hours, calculate the shortfall.
Distribute the shortfall across days where the employee worked under their daily average.
Create top-up pay items at the Pay Policy Rate (no rate multipliers applied).
Pay Policy Rate Behaviour
The key feature of this implementation is that top-up hours are always paid at the Pay Policy Rate:
Pay Policy Rate: The base hourly rate defined in the employee’s pay policy.
No Rate Multipliers: Penalty rates, overtime multipliers, and other rate adjustments are not applied to top-up hours.
Consistent Payment: All top-up hours are paid at the same base rate regardless of when the original shortfall occurred.
Example: Rate Application
Day | Actual Hours | Rate Applied | Top-Up Hours | Top-Up Rate |
Monday | 3 hours | $30/hr (penalty) | 5 hours | $26.55/hr (Pay Policy Rate) |
Tuesday | 6 hours | $26.55/hr (base) | 2 hours | $26.55/hr (Pay Policy Rate) |
Wednesday | 4 hours | $35/hr (overtime) | 4 hours | $26.55/hr (Pay Policy Rate) |
Distribution Rules
When calculating how to distribute top-up hours across the pay period, the system considers:
Days with longer hours: Days where the employee worked at or above the daily average are not topped up.
Days with shorter hours: The shortfall is distributed across days where hours were below average.
Pro-rata for partial periods: If an employee started or ended employment mid-period, contractual hours are pro-rated accordingly.
Complete Example:
Day | Actual Hours | Daily Target | Top-Up Required |
Monday | 3 hours | 8 hours | 5 hours |
Tuesday | 6 hours | 8 hours | 2 hours |
Wednesday | 4 hours | 8 hours | 4 hours |
Thursday | 8 hours | 8 hours | 0 hours |
Friday | 8 hours | 8 hours | 0 hours |
Total | 29 hours | 40 hours | 11 hours |
Configuring Top Up to Contractual Hours
Setting Up Employee Pay Policy
Before the top-up feature can work, employees must have the average weekly contractual hours defined in their Pay Policy.
Navigate to Employees > Employee Details.
Select the employee’s Pay Policy assignment.
Ensure the Hours in a Working Week field is populated with the contracted hours.
Save the Pay Policy assignment.
Important: If the field is left blank it will default to 100% of the FTE. If no top up is to occur, ensure you enter the Hours in a Working Week as 0
Period Option | Schedule | Hours in a Working Week Entry |
Fortnightly | 38hrs Per Week | 38 |
Fortnightly | 45.6hrs Week 1 30.4hrs Week 2 | 38 |
Fortnightly | 40hrs Week 1 30hrs Week 2 | 35 |
Enabling Top Up to Contractual Hours in Award Policies
Top Up to Contractual Hours is enabled through the Award Policy configuration using the Make Up Contractual Hours output rule.
Navigate to Payroll > Award Policies.
Select the award policy you wish to configure.
Go to the Output Rules section.
Add a new Make Up Contractual Hours output rule.
Configure the following settings:
Applicable Pay Items: Select the pay items that count towards contractual hours (e.g., Ordinary Hours).
Target Pay Item: Select the pay item to use for top-up hours.
Period: Choose either “Pay Calendar” or “Week Aligned to Pay Calendar”.
6. Save the award policy.
Period Options
The Make Up Contractual Hours rule supports two period calculation modes:
Period Option | Description | Use Case |
Pay Calendar | Calculates contractual hours based on the full pay period | Weekly, Fortnightly, or Four Weekly pay calendars |
Week Aligned to Pay Calendar | Calculates contractual hours on a weekly basis within the pay period | When weekly contractual hours must be met each week |
Supported Pay Calendars
Top Up to Contractual Hours is supported for the following pay calendar periods:
Weekly
Fortnightly
Four Weekly
Note: Monthly pay calendars are not supported. If a monthly pay calendar is used, a warning message will be displayed during pay run calculation.
Example Award Policy Structure
How Pay Runs Use Top Up to Contractual Hours
Automatic Application
Once Top Up to Contractual Hours 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 processes timesheets through the award policy rules.
After all regular pay items are calculated, the output rules are processed.
The Make Up Contractual Hours rule identifies employees with shortfall hours.
Top-up pay items are created at the Pay Policy Rate.
The final payment includes both actual hours and top-up hours.
Viewing Calculated Hours
When reviewing a pay run, you can verify the top-up hours by:
Opening the pay run.
Reviewing the employee’s pay details.
Looking for the designated top-up pay item (If utilised).
Checking the units (hours) and rate applied.
Note: The top-up pay item will show the Pay Policy Rate, not any penalty or overtime rates that may have been applied to the original hours.
Warning Messages
The system may display warning messages during pay run calculation if:
The employee does not have weekly hours defined in their Pay Policy.
The pay calendar is not supported (e.g., monthly).
Contractual hours cannot be resolved for the pay period.
Backward Compatibility
Existing Pay Policies
Implementation of Top Up to Contractual Hours at Pay Policy Rate does not affect existing pay policies or calculations that do not use this feature.
Key points:
Existing calculations continue to work unchanged
Top Up to Contractual Hours must be explicitly enabled for each award policy
There is a clear distinction between policies with and without the feature
No existing functionality is broken by the implementation
Migration Considerations
If you need to add Top Up to Contractual Hours to existing policies:
Review your current award policies.
Identify which employees have contractual hour requirements.
Ensure all affected employees have weekly hours defined in their Pay Policy.
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 to include the Make Up Contractual Hours output rule.
Test the updated policies in a non-production environment.
Deploy the changes during a suitable pay period transition.
Important: When adding Top Up to Contractual Hours, be aware that employees who previously received no top-up may now receive additional payment. Review and communicate any changes to affected employees as required.
Troubleshooting
Hours Not Being Topped Up
Problem: Employees are not receiving top-up hours when they work under their contractual hours.
Solution:
Verify that the Make Up Contractual Hours output rule is configured in the award policy.
Check that the employee has Weekly Hours defined in their Pay Policy.
Confirm the pay calendar is supported (Weekly, Fortnightly, or Four Weekly).
Ensure the applicable pay items in the rule match the pay items being generated.
Review the pay run messages for any warnings.
Top-Up Rate Incorrect
Problem: Top-up hours are being paid at an unexpected rate.
Solution:
Top-up hours are always paid at the Pay Policy Rate by design.
Verify the employee’s Pay Policy has the correct base hourly rate.
Check that the Pay Policy assignment is active for the pay period.
Review any pay item-specific rates that may override the Pay Policy Rate.
Warning: Unable to Resolve Contractual Hours
Problem: Pay run displays “Unable to resolve contractual hours for pay period” warning.
Solution:
Check that the employee has a Pay Policy assignment for the pay period.
Verify the Pay Policy has Weekly Hours defined.
Ensure the Pay Policy assignment dates cover the pay period.
Review the employee’s employment records for any gaps.
Warning: Invalid Pay Calendar
Problem: Pay run displays “Make up contractual hour is only supported for weekly, fortnightly and four weekly pay calendar periods” warning.
Solution:
This feature is not supported for monthly pay calendars.
Consider using a different pay calendar for affected employees.
Alternatively, manually calculate and add top-up hours for monthly employees.
Frequently Asked Questions
Q: Does Top Up to Contractual Hours apply to all employees automatically?
A: No, Top Up to Contractual Hours must be explicitly enabled in the award policy configuration. Only employees assigned to award policies with the Make Up Contractual Hours output rule will have their hours topped up.
Q: Why are top-up hours paid at the Pay Policy Rate instead of the rate from the original timesheet?
A: Top-up hours represent hours not actually worked, so they are paid at the base Pay Policy Rate without penalty or overtime multipliers. This ensures consistent and fair payment for guaranteed hours.
Q: Will enabling Top Up to Contractual Hours change my existing pay calculations? A: Only for employees where the feature is enabled and who work fewer than their contractual hours. Employees who meet or exceed their contractual hours will see no change.
Q: Can I use different pay items for top-up hours?
A: Yes, you can configure any payment pay item as the target for top-up hours. It’s recommended to use a dedicated pay item for clear reporting and audit purposes.
Q: What happens if an employee works more than their contractual hours?
A: No top-up is applied. The employee is paid for their actual hours worked, including any applicable penalty or overtime rates.
Q: Does Top Up to Contractual Hours work with leave?
A: Top Up to Contractual Hours applies to timesheet-based calculations. Leave is typically handled separately through leave policies and may count towards contractual hours depending on your configuration.
Q: What happens if an employee starts or ends employment mid-period?
A: The system automatically pro-rates the contractual hours based on the days the employee was employed during the pay period.
Q: How do I verify that Top Up to Contractual Hours is working correctly?
A: Review the pay run calculations and look for the designated top-up pay item. The units should represent the shortfall hours, and the rate should be the Pay Policy Rate.
Q: Is Top Up to Contractual Hours supported for all pay calendars?
A: No, the feature is only supported for Weekly, Fortnightly, and Four Weekly pay calendars. Monthly pay calendars are not supported.
Getting Help
If you experience issues or have questions about Top Up to Contractual Hours:
Review this guide for configuration and troubleshooting information.
Contact your system administrator for award policy configuration questions.
Check employee Pay Policy settings to ensure contractual hours are defined.
Review pay run messages for any warnings or errors.
Contact support if you need assistance with configuration or calculations by raising a case online.