Pay Group

What is Pay Group?

A pay group is defined as a set of employees who are grouped together for payroll processing. Such groups could be departments, or separate entities from the company. The groups can include different types of employees, such as hourly employees, salaried employees, part-time and full-time, and the goal of having pay groups is to provide cost savings, work efficiencies, and flexibility for the company.

How does Pay Group work?

It is a logical grouping based on shared characteristics that facilitate payroll processing because of common requirements like employee type, pay frequency, same country location, same state or province location, same bank, etc. An employee may only belong to one pay group, and each group is assigned a group code in the company’s payroll system.

Changes to pay groups are allowed and are typically applied at the next pay run.

Conclusion

Processing an employee’s pay correctly can be challenging without the latest information and the right experts who continue to monitor ever-changing regulations. Therefore, when it comes to employees’ pay, it’s important to be well-versed on all payroll terms and to explain how they work, while having a full understanding of the rules around them.

For additional information, see the terms entitled Payroll, Pay Period.