This article will explain how monthly paid employee calculations are made.

Firstly you change your employee type by editing employee information:

Then when setting up compensation:

Monthly Rate (35,000) over the year (12 months)   = The Yearly Salary 420,000

Yearly Salary (420,000) divided by days/year (260) = The Daily Rate 1,615.38 (InGreen)

Daily rate (1,615.39) divided by Hours a day (8)      = Hourly Rate 201.92 (In Blue)

And this shows up on a payslip as follows:

The Monthly Rate (In Red) is divided by two (As the payslip comes in Semi-Monthly) to give the Base Pay (In Orange).

The Regular Taken (In Yellow) is the amount of hours that was missed for that Pay-Period (Here the guy was late 12.76 hours in total) This is multiplied by the Hourly rate to give the amount to be deducted from the Base Pay for tardiness.