diff --git a/Instructor-Guide--Assignments--Late-Submission-Policies.md b/Instructor-Guide--Assignments--Late-Submission-Policies.md
index 1823d4b..46efc3e 100644
--- a/Instructor-Guide--Assignments--Late-Submission-Policies.md
+++ b/Instructor-Guide--Assignments--Late-Submission-Policies.md
@@ -29,19 +29,41 @@ For group work, *all* members of the group must have enough grace credits availa
 
 ## Use Penalty Decay Formula
 
-This option will allow you to use a built-in function that deducts X grade percentage every Y hours for a duration of Z hours. You are able to create multiple time periods in case you want to deduct 5% every hour for the first four hours and then 10% every 6 hours for 12 more hours:
+This option will allow you to use a built-in function that deducts X amount of penalty every Y hours for a duration of Z hours. You are able to create multiple time periods in case you want to deduct 5%/marks every hour for the first four hours and then 10%/marks every 6 hours for 12 more hours.
+
+### Penalty Type
+
+You must select a **Penalty Type** to determine how penalties are calculated (default is Percentage of assignment total):
+
+- **Percentage of assignment total**: Deduct a percentage of the total possible marks for the assignment (e.g., 5%)
+- **Percentage of earned mark**: Deduct a percentage of the student's earned mark (e.g., 5% of student's earned mark)
+- **Marks**: Deduct a fixed number of marks (e.g., 5 marks)
+
+The deduction unit displayed next to the input field will automatically update based on your selection (% for percentage types, marks for the marks option).
+
 ![Website Penalty Decay Formula](images/late-submission-policy-penalty-decay-formula.png)
 Additional time periods are added by clicking the "Add late period" button and removed by using the delete link. MarkUs will automatically adjust the real time periods for you when adding and deleting.
 
 When grading a late submission, the penalty will be automatically applied to the group's mark, but will not decrease the mark below 0. This penalty will appear in the "Summary" tab of the grading view.
 
-Penalties are applied as a percentage of the total mark. For example, a 10% penalty for an assignment out of 90 total marks will reduce a groups's overall score by 9 marks. If a group would have received 55/90 before the penalty is deducted, they will receive 46/90 after the penalty is deducted.
+Penalties are applied as a percentage of the total mark. For example, a 10% penalty for an assignment out of 90 total marks will reduce a group's overall score by 9 marks. If a group would have received 55/90 before the penalty is deducted, they will receive 46/90 after the penalty is deducted.
 
 ## Set Manual Penalty Periods
 
-This option allows you to set percentage penalty amounts for specified time periods.
+This option allows you to set percentage/marks penalty amounts for specified time periods.
+
+### Penalty Type
+
+You must select a **Penalty Type** to determine how penalties are calculated (default is Percentage of assignment total):
+
+- **Percentage of assignment total**: Deduct a percentage of the total possible marks for the assignment (e.g., 5%)
+- **Marks**: Deduct a fixed number of marks (e.g., 5 marks)
+- **Percentage of earned mark**: Deduct a percentage of the student's earned mark (e.g., 5% of their score)
+
+The deduction unit displayed next to the input field will automatically update based on your selection (% for percentage types, marks for the marks option).
+
 ![Website Manual Penalty Periods](images/late-submission-policy-penalty-period.png)
-Additional time periods are added by clicking the "Add late period" button and removed by using the delete link. MarkUs will automatically adjust the "From" and "To" times depending on the number of hours you specify in the "After" column.
+Additional time periods are added by clicking the "Add late period" button and removed by using the delete link. MarkUs will automatically adjust the "From" and "To" times depending on the number of hours you specify in the "Period" column.
 
 Note that for each late submission method, in order for the "From" and "To" times to be calculated, a due date must be specified in the "Properties" section. If a date is not specified then the "From" and "To" sections will be empty or read "Invalid Date"
 
diff --git a/images/late-submission-policy-penalty-decay-formula.png b/images/late-submission-policy-penalty-decay-formula.png
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diff --git a/images/late-submission-policy-penalty-period.png b/images/late-submission-policy-penalty-period.png
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