There are four rules that can be used for penalties:
Change hourly rate
Use this rule to penalise employees with a change to their hourly basic pay rate. This is not available on penalties of Type: Target Attendance.
Use this rule to deduct a fixed amount of pay from an employee’s pay.
Treat absence as leave
Use this rule to deduct leave from an employee as a result of their absence.
Deduct allowance (formula)
Use this rule to deduct a calculable amount from an employee as a result of their absence.
Follow the below explanation, which is available by clicking on the tooltip, when using this rule.