Setup Considerations: eligibility rules

What this achieves

An eligibility rule moves an allowance out of individual employee records and into one piece of configuration that is re-resolved at every run. That is the right tool when many people get the same thing for the same reason, and the wrong one when an amount is genuinely personal.

Decision 1: a rule, or a figure on the employee

Option	Description
An eligibility rule	The amount lives once, on the rule. New joiners who match are picked up automatically; leavers stop automatically. Best when the reason for the payment is a property of the job, not the person.
A figure on the employee	The amount lives on one record. Nothing is inferred. Best when the amount is negotiated individually.

The test is whether you can state the reason without naming anyone. If you can, it is a rule.

Example: “everyone based in London gets a travel allowance” is a rule. “James Whitfield has a retention arrangement agreed at his last review” is not — it belongs on his record.

Decision 2: how narrow to make the criteria

Criteria combine with AND, so each filter you add makes the rule reach fewer people. Two narrow rules are usually clearer than one rule with five conditions, because a rule nobody matches looks identical to a rule that is switched off.

Use the live preview as part of the decision, not as a check at the end. If the matched count is not what you expected, the criteria are wrong.

Example: a London travel allowance at HC Corp UK Ltd needs a location filter. Adding a grade filter as well quietly excludes anyone promoted out of that grade, which is a change nobody will notice until a payslip is short.

Decision 3: entity scope

A rule can name a legal entity or apply to all of them. Naming an entity beats an all-entities rule for the same pay element inside that entity, which is the intended way to vary an allowance by country.

Where your entities do not share a currency, a fixed amount carries none — the same number is paid in each entity’s own currency. Scope such rules to an entity to make them unambiguous.

Example: HC Corp UK Ltd pays in GBP and HC Corp Inc. in USD. A fixed all-entities amount of 250 would mean £250 in one and $250 in the other. Two entity-scoped rules say what you mean.

Decision 4: fixed amount or percentage

A percentage is applied to base salary normalized to a month, so it means the same at every pay frequency. It also moves automatically when someone’s salary changes, which is either exactly what you want or a surprise at the next pay review.

An employee with no usable base salary receives nothing from a percentage rule. Check the preview for that warning before relying on one.

Decision 5: retiring rather than deleting

Setting Effective to retires a rule without erasing what it has already paid. Deleting it also leaves prior payslips intact — they keep their own record of what they paid — but it removes the configuration that explains them.

Prefer retiring. The question “why did this allowance appear on payslips last year” is much easier to answer when the rule still exists with an end date.

What is expensive to change later

Decision	Cost of changing later
The pay element a rule grants	High. The element carries the tax treatment, so changing it changes how the amount is taxed for everyone the rule reaches.
Criteria on a live rule	Medium. People join or leave the rule at the next run, and their pay changes without anything on their record changing.
Amount or percentage	Medium. It takes effect at the next run for everyone matched.
Rule name	Low, but employees see it on their payslip, so keep it meaningful.
Effective-to date	Low. This is the intended way to retire a rule.

What happens next

Rules are resolved at each run, so the effect of anything you change here appears on the next payslip rather than immediately. After a change worth checking, review the resulting run before it is approved — that is the point at which a mis-scoped rule is still cheap to fix.