Defining the Types of Rates


After completing this lesson, you will be able to:

  • Explain how a Rate Type is used to determine how Workers and Suppliers get paid.
  • List and describe the Rate Types available in SAP Fieldglass and explain why organizations may require multiple Rate Types.

Rate, Bill Rate, and Pay Rate Types

Considering the intricacies of doing business in the world today, it’s probably not surprising that SAP Fieldglass identifies 15 different methods of determining a final bill rate. These methods are called Rate Types.

Rate Types define the different approaches to determining the final bill rate, based upon particular business drivers. It is required that you select a rate type when creating a rate in SAP Fieldglass.

To help explain why there are so many rate types we’ll concentrate for the moment on just three of them:

  • The Rate,
  • Bill Rate Based, and
  • Pay Rate Based.

The Rate Rate

The Rate rate type is, well, the rate!

It’s sort of the "what-you-see-is-what-you-get" rate used by Buyers who don’t need to see the Supplier’s fees or Worker’s wages that ultimately make up the final Bill Rate.

So since it doesn’t contain any rate components, the Supplier’s rate of 100 equals the 100 Bill Rate presented to the Buyer.

For instance, in a job posting WorkingNet may simply set a maximum rate that they will pay the supplier for Joe, and reCrewIt then presents that rate as the final Bill Rate as agreed.

In this case, WorkingNet has chosen not to capture the Pay Rate or any applicable Rate Components in the SAP Fieldglass application.

With the basic Rate rate type, the Pay Rate equals the Bill Rate.

Image illustrating that with a basic Rate, the Pay Rate = Bill Rate

The Bill Rate Based Rate

With Bill Rate Based, the Buyer is given insights into how the Supplier arrives at a Pay Rate from a negotiated Bill Rate.

So the final Bill Rate is static, but the Rate Components are visible, showing how the rate is allocated, and what the resulting Pay Rate will be.

For example, reCrewIT has negotiated that WorkingNet will be billed a rate of 100, with 80 promised to Joe and the remaining 20 comprising reCrewIT’s fee.

This allows WorkingNet visibility into reCrewIT’s costs and determine whether the final bill rate has been arrived at fairly.

With the Bill Rate Based rate, the Bill Rate is determined first and the Pay Rate and Rate Components are derived from it.

Image illustrating with a Bill Rate Based rate, the Bill Rate = the Pay Rate + Rate Components.

The Pay Rate Based Rate

Pay Rate Based results from a negotiated Pay Rate, so the Bill Rate is variable, based upon the Pay Rate plus the Rate Components. Again, this shows how the components are allocated, but specifies up front how much is to be allocated to the worker’s pay.

So in this case, WorkingNet and reCrewIT have negotiated that Joe will be paid 80. The remaining amount will be reCrewIT’s fee. Based on this approach, the final bill rate can change based upon reCrewIT’s fee.

Several countries dictate that worker pay be a static amount, so this approach is often the result of regional regulations.

With the Pay Rate Based rate, the Pay Rate is defined first, and the Bill Rate is derived from it plus any Rate Components.

Image illustrating with a Pay Rate Based rate, the Pay Rate + Rate Components = Bill Rate.

Rate Types

Again, the reasons why an organization might use these three rates types varies, but whatever the case, SAP Fieldglass recognizes 15 different rate types so that Buyers can gain whatever insights into the costs of their temporary workforce that they may need.

And some of them are a bit complex, so we’re not going to go into detail about each of them here.

But there are a few things about some of them that should be pointed out that may allow you to understand them a little better.

Play the video to learn more about the various rate configurations in SAP Fieldglass.

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