Losing $1.63M on Manual Payroll? Generate Shift-Based Payslips in Odoo 18

Manufacturing company with 847 shift workers. HR manually calculates payslips: Day shift × 8 hrs × $27/hr + Night shift × 8 hrs × $34.50/hr (27.5% premium) + Weekend × 10 hrs × $40.50/hr (50% premium). Spreadsheet has 847 rows. Employee #237 worked: 3 day shifts, 2 night shifts, 1 weekend. HR calculates: (3×8×$27) + (2×8×$34.50) + (1×10×$40.50) = $648 + $552 + $405 = $1,605. Pays employee. Employee contests: "I worked 4 night shifts, not 2." HR checks paper timesheets—employee correct. Recalculates: +2 night shifts = +$552. Owes $552. Happens 127 times monthly. Cost: $552 avg error × 127 disputes × 12 = $841,392 yearly underpayments + legal risk. Manual calculation time: 23 minutes per employee × 847 × 12 = 234,372 minutes = $1,627,604 HR cost.

Your payroll disaster: Manual shift tracking (paper timesheets = errors, disputes). Spreadsheet calculations (wrong formulas, copy-paste errors). No shift differential automation (day vs night vs weekend rates). Overtime miscalculated (forget 1.5× after 40 hrs). Can't verify actual hours worked (he-said-she-said conflicts). Payslip generation takes 23 minutes per employee (847 employees = 325 hours monthly). Late payments (calculation delays = unhappy employees). No audit trail (can't prove calculations correct). Tax withholding errors (shift premiums taxed wrong). Compliance violations (labor law requires accurate time tracking).

Cost: Manual payroll processing = 325 hours monthly × $87/hr × 12 = $339,300 yearly. Calculation errors = 127 disputes × $552 avg × 12 = $841,392 underpayments. Legal penalties (labor violations) = $47,000 yearly fines. Employee turnover (payment disputes) = 23 employees quit × $8,700 replacement cost = $200,100. Overtime miscalculations = 847 employees × $127 avg yearly = $107,569. Tax withholding errors = $23,400 IRS penalties. Audit costs (proving compliance) = $87,000 yearly external auditors. Lost productivity (HR doing math instead of strategy) = $127,000 opportunity cost.

Odoo 18 Payroll with Shift Planning fixes this: Define shift types (day, night, weekend) with rates. Link employee contracts to shifts. Planning module tracks actual shifts worked. Payroll auto-calculates based on shift records (day shift × 8 × $27, night × 8 × $34.50). Overtime rules automatic (>40 hrs = 1.5×). Generate payslips in 30 seconds per employee (vs 23 minutes manual). Work entries from Planning = zero data entry. Audit trail complete (every shift logged, timestamped). Shift differentials configured once, applied forever. Here's how to generate shift-based payslips so you stop losing $1.77M annually to manual chaos.

What Shift-Based Payslips Do

Automated payroll from shift records: Define shifts → Assign employees → Track in Planning → Generate work entries → Auto-calculate pay → Create payslips instantly.

Step 1: Install Required Modules

Three modules work together for shift-based payroll.

1. Go to Apps
2. Search and install:
   • Employees: Core HR management
   • Payroll: Salary calculations and payslips
   • Planning: Shift scheduling and tracking
3. All three modules required (they integrate automatically)

Step 2: Create Employee Record

Set up employee with all necessary details for payroll.

1. Go to Employees → Employees
2. Click New
3. Fill basic information:
   • Name: Employee full name
   • Job Title: Position (e.g., "Production Worker")
   • Work Email: Company email
   • Work Phone/Mobile: Contact numbers
   • Company: Which company employs them
   • Department: e.g., "Manufacturing"
   • Job Position: Specific role
   • Manager: Direct supervisor

Configure Work Information Tab

1. Go to Work Information tab
2. Set work details:
   • Work Address: Primary work location
   • Working Hours: Default schedule (e.g., "40 Hours/Week")
   • Timezone: Employee's timezone
3. Under Planning section:
   • Roles: Shift roles (e.g., "Production", "Quality Check")
   • Default Role: Primary role for scheduling

Configure Payroll Tab

1. Go to Payroll tab
2. Set payroll details:
   • Legal Name: Full legal name
   • Payslip Language: Language for payslip generation
   • Registration Number: Employee ID number
   • Tax Filing Status: Federal and state tax status

Step 3: Create Employee Contract

Critical: Contract defines pay rates and links to shift planning.

1. From employee form, click Contracts tab
2. Click New to create contract
3. Configure contract basics:
   • Contract Name: e.g., "John Doe - Production 2024"
   • Contract Start Date: When employment begins
   • Contract End Date: Leave blank for permanent
   • Working Schedule: Standard hours (for OT calculation)
   • Work Entry Source: Select "Planning" (CRITICAL for shift-based)
   • Salary Structure Type: Choose appropriate structure
   • Department: Employee's department
   • Job Position: Specific role

Configure Salary Information

1. Go to Salary Information tab
2. Set wage type:
   • Wage Type: Select "Hourly Wage"
   • Hourly Wage: Enter base rate (e.g., $27.00)
3. This base rate used for day shift calculations
4. Shift differentials configured separately in salary rules

Set Contract to Running

1. After saving contract, change status dropdown to "Running"
2. Contract now active for payroll processing

Step 4: Configure Shift Types & Rates

Define different shifts with premium rates (night, weekend, etc.).

1. Go to Payroll → Configuration → Salary Rules
2. Create shift differential rules:
   • Day Shift: Base rate ($27/hr × hours worked)
   • Night Shift: Base + 27.5% premium ($34.50/hr)
   • Weekend Shift: Base + 50% premium ($40.50/hr)
3. Example Night Shift rule:
   • Name: "Night Shift Premium"
   • Code: NIGHT
   • Condition: worked_days.NIGHT (checks if night shift hours exist)
   • Computation: contract.hourly_wage * 1.275 * worked_days.NIGHT.number_of_hours

Step 5: Schedule Employee Shifts

Use Planning module to assign shifts to employees.

1. Go to Planning app
2. Select employee from list (or click New for new shift)
3. Click Edit on calendar view
4. Configure shift:
   • Employee: Select employee
   • Role: Shift type (Day, Night, Weekend)
   • Start Time: Shift begins
   • End Time: Shift ends
   • Duration: Auto-calculated (e.g., 8 hours)
5. Click Publish & Send to notify employee
6. Repeat for all shifts in pay period

Step 6: Generate Payslip from Shifts

Payroll automatically pulls shift data and calculates pay.

1. Go to Payroll → Payslips → To Pay
2. Click New
3. Select employee from dropdown
4. System auto-fills:
   • Contract: Active contract
   • Structure: Salary structure
   • Period: Pay period (e.g., January 2024)
5. Click Work Entries tab
6. View shift breakdown:
   • Day shifts: 24 hours (3 shifts × 8 hrs)
   • Night shifts: 16 hours (2 shifts × 8 hrs)
   • Weekend shifts: 10 hours (1 shift × 10 hrs)
   • Total: 50 hours
7. Click Planning tab to verify shift schedule
8. Click Compute Sheet button
9. System calculates:
   • Day: 24 hrs × $27 = $648
   • Night: 16 hrs × $34.50 = $552
   • Weekend: 10 hrs × $40.50 = $405
   • Total Gross: $1,605
   • Deductions (taxes, benefits): Auto-calculated
   • Net Pay: Displayed
10. Click Generate Payslip
11. Payslip created in 30 seconds (vs 23 minutes manual)

Step 7: Review & Approve Payslip

1. Payslip shows detailed breakdown:
   • Each shift type with hours and rate
   • Overtime calculations (if applicable)
   • Gross pay
   • Deductions (taxes, insurance, etc.)
   • Net pay
2. Verify accuracy (should match Planning records exactly)
3. Click Confirm to finalize
4. Generate PDF for employee download
5. Process payment via Accounting module

Advanced: Batch Payslip Generation

Process all employees at once (e.g., 847 employees in 5 minutes).

1. Go to Payroll → Payslips → Batches
2. Click New
3. Configure batch:
   • Batch Name: e.g., "January 2024 Payroll"
   • Period: Pay period
   • Date From/To: Pay period dates
4. Click Generate Payslips
5. Select department or all employees
6. System generates all payslips automatically from Planning data
7. Review batch → Click Confirm All
8. 847 payslips generated in ~5 minutes (vs 325 hours manual)

Real-World Impact

Best Practices

FAQs