Many earnings and deductions - such as salary, pension deductions, and taxes - are discussed under specific functional headings, such as Salary and Grade Related Pay, or Savings and Retirement, or Payroll Statutory Deductions. In this area, we look at payroll earnings and deductions, such as wage attachments, that have not already been covered under other functional headings.
We also focus on additional setup required by Oracle Payroll for processing earnings and deductions. This setup includes the creation of formulas and balances. In some localizations, and for certain types of earnings and deductions, you can select template elements in the Configuration Workbench, or you can use the Element Design Wizard or template windows to generate all the components required for payroll processing, including elements, formulas, balances, and formula result rules.
Certain types of earnings and deductions require additional setup to enable special processing such as net-to-gross and proration, where this is enabled for your localization. Such setup is also discussed in this section.
Note: Mexico only: Oracle HRMS for Mexico does not support net-to-gross processing.
To get the most out of the earnings and deductions functionality of Oracle HRMS, you need to understand the following key concepts:
Pay values
Formulas
Frequency rules
Payroll balances
Earnings and deductions templates
Proration
Net-to-gross processing
Third party payments
Oracle HRMS provides an integrated solution for Human Resources and Payroll. Therefore your setup of compensation and benefits supports both compensation management and payroll management.
Yes it can, through its use of formulas to specify calculations for each earnings or deduction. These formulas use values from the HRMS database and can include conditional logic to perform different calculations for different groups of employees. For example, they can check balances or employee status to control how to process the earning or deduction. Many of the formulas you need, for example for tax calculations, are supplied with Oracle Payroll.
The sequence of processing in a payroll run is determined by classifications, such as Pre-tax Deductions and Tax Deductions. You can also prioritize the processing for an individual employee, for example to determine the order in which deductions are processed for wage attachments.
You control whether any value is processed just once, in every payroll run, or periodically (such as once a quarter). Your formulas can also change or stop the processing of an earning or deduction during a run, based on employee status.
The system can accumulate balances of payroll run results or values entered before the run. You can accumulate a balance over different time dimensions such as current run, month, and year to date. You can review balances after payroll processing and use balances to control the processing performed in the payroll run.
Yes, you can define whatever additional balances your enterprise requires. For example, you may require a Pensionable Earnings balance for a defined benefit pension plan your enterprise offers employees.
Some values, such as salary, can be entered once and used in every payroll run (or periodic runs) until you need to update them. Other values, such as hours worked, need to be entered or calculated fresh for each run.
You can do one of the following:
Use default values (which may be different for groups of employees)
Enter values employee-by-employee
Enter values in a batch
Leave it to the system to enter values based on calculations performed during the payroll run
You can define validation rules to minimize data entry errors.
The wage attachments that you can process depend on the specific payments that apply to your legislation. Examples of payments include child support payments, educational loans, taxes to local authorities, alimony, and bankruptcy orders.
See: Third Party Payments Overview
US Only:
When the court issues a release notice for a wage attachment, or if you receive a Form 668-D for a federal tax levy, you must end the employee's wage attachment. Oracle Payroll also stops processing wage attachments when the total owed is reached.
Oracle Payroll supports electronic funds transfer (EFT) of state child support garnishments for the state of Illinois. However, all states accept the Oracle EFT format, but normally require different data dependent upon individual state requirements. You can use the Illinois EFT format to send support payments electronically to all states. You need to include only the information required by the state in the file. You create a separate file for each state containing different routing and account numbers, so you need to set up a separate third party payment method for each state.
Yes, if you operate in the US, you can use the Wage Attachment Fee Administration process to recoup costs. This process recoups costs in administering alimony, bankruptcy orders, employee requested attachments, and tax levies.
Using Wage Attachment Earnings Rules you can determine which earnings types are considered disposable income and liable for wage attachment deductions.
You can determine the overall priority of a wage attachment compared to other deductions, and you can also determine sub priorities. For example, if an employee has multiple court orders against them, you can ensure that Oracle Payroll deducts the most important order first.
The standard processing priority order for processing the various categories of attachment is the following:
Child Support orders
Bankruptcy orders
Federal tax levies
Debt Collection Improvement Act orders
Student loan garnishments
State tax levies (not supported by Oracle Payroll)
Local tax levies (not supported by Oracle Payroll)
Creditor garnishments
Employer deductions
If enabled for your localization, you can use Oracle Payroll's Cheque Writer features to produce cheques for either organizations or individuals. Localizations that do not have Oracle Payroll's Cheque Writer features available can make payments by credit transfer.
You can use an external system to manage your wage attachments. If you want to make entries from that system into Oracle Payroll for payroll processing, you can use predefined deductions that come with Oracle Payroll.
Oracle Payroll fully supports the federal overtime calculation rule. The new functionality performs calculations for periods that are longer than a single workweek. You can configure the product to handle either Federal FLSA or State FLSA. You can also configure alternative overtime calculations as specified by selected states or by union contract.
Oracle Payroll uses the term Augments to refer to amounts paid which are in addition to the employee's regular rate of pay and which are considered to be non-discretionary, such as a commission or bonus. The new functionality prorates the augment across all periods during which it was earned.
Oracle Payroll comes with certain earnings types ready for you to use. You initiate the other earnings and deductions you need, as well as non-payroll payments such as expense reimbursements.
The predefined earnings types are:
These earnings come with their elements, input values, balance feeds, formulas, processing rules and result rules already in place, and available for review.
In addition to the earnings and deductions mentioned above, Oracle Payroll comes with all current federal and provincial tax deductions already in place. Oracle has made an agreement with Vertex Inc. to provide this data.
To set up these deductions, you enter the appropriate tax rules for each GRE. You must create an element link for the Canadian Tax element, the Provincial Medical element, and the Workers' Compensation Board elements. You do not need to create element links for the other tax deductions, unless you want to do specific tax balance adjustments. Your system administrator receives tax updates from Vertex Inc., and applies them as necessary.
To supplement the earnings types and deductions included in your startup data, you initiate earnings types, payments and deductions that accord with your own compensation policies and practices. After you choose the appropriate processing and amount rules in the Earnings or Deduction window, the system generates:
An element for the earnings, payment or deduction, with all necessary input values, balances and balance feeds
A formula that utilizes the input values, together with a processing rule for the formula.
Once you create links for the earnings, payments and deductions you initiate and make entries to their input values, they are ready for use in payroll runs.
If the generated components of an earnings or deduction do not precisely meet your needs, you can make certain modifications to them. See: Customizing Generated Elements, Formulas, and Balances
Elements are processed during payroll runs according to the business rules for each element that you define at setup. Many of these rules are defined in formulas, written using Oracle FastFormula. Formulas specify how the payroll run should perform calculations for the element.
This is a basic formula for the calculation for the element Wages:
Wages = Hours Worked in Week * Wage Rate
The processed results for each element are called the run results. They become balance feeds for different balances. Some balance feeds are predefined to feed required statutory balances, and you can create your own balance feeds to your own user defined balances.
Formulas obtain some of the data they need from entries to their element's input values. The Wages formula above, for example, could locate each employee's hours worked as an entry to the input value Hours of the Wages element.
Formulas can also obtain information from database items. Much of the information in the Oracle HRMS database, including extensive information on employees and their assignments, is available to formulas as database items. For example, the Wages formula can locate each employee's wage rate as a database item.
There are several ways to vary the processing performed by formulas:
You can use conditional logic (IF..THEN) within a formula to perform different calculations depending on any information taken from input values or database items (such as length of service).
You can associate more than one formula with an element, each triggered by a different assignment status (such as Active Assignment or On Sabbatical).
You can use one formula but associate different formula results with each assignment status.
You can associate a skip rule formula with an element. This formula can check balances, other element entries, the assignment status or any other database items to determine whether the payroll run should process the element for an assignment.
Mexico only: Mexican implementations do not support skip rules by default. They must be enabled manually.
Formulas can produce different types of run results:
The direct result is the amount of an earnings or deduction, for example, the dollar amount of wages an employee has earned that week. As well as calculating the amount to be paid, direct results can be used for costing purposes and analysis (such as tracking hours of overtime).
Indirect results, updates, and stops. A formula result can make an entry to the input value of another element for its formula to use. An indirect result is an entry to a nonrecurring element. An update is an entry to a recurring element. A stop puts an end date on a recurring entry of another element, to prevent it being processed in the run.
Order indirect. This result updates the subpriority of an element that has not yet been processed.
Messages. For example, you can write a formula that checks the length of a text string, and have it issue a message for payroll users if the string is too short or too long.
You set up formula result rules to determine the type of each result, and the names and input values of any other elements the result may affect.
Oracle Payroll comes with formulas specific to your legislation. Generally, you receive all the calculations required for employee tax withholding and employer taxes. When there are changes to taxes, you receive updates. You may also receive formulas for other earnings and deductions, depending on your legislation.
When you have occasion to look at the structure of an element online, you may see an input value named Pay Value at the top of its input value listing.
The Pay Value is different from other input values. Its purpose is to store an element's run result. For example, suppose the formula for the Wages element is:
Wages = Hours Worked x Wage Rate
If an employee whose wage rate is $10/hour works 40 hours in a week, the payroll run produces a run result of $400 for him or her. It stores this result in the element's Pay Value.
However, if you give an entry to a Pay Value before a run, this entry becomes the element's run result. For example, suppose you enter 40 in the Time Worked input value of the Wages element for an employee who earns $10/hour, but also enter $100 in the element's Pay Value. The run ignores the entry of hours worked and the Wages formula, and simply produces a run result of $100 for this employee.
Pay Values sometimes appear as the first input value for elements having the rule Process in Run, providing a place to store run results. For some elements with the Process in Run rule the Pay Value may be enterable, so you can put in it a run result amount when the element has no formula, or when you do not want its formula to process.
However for generated elements, the Pay Value is usually not enterable. This is because Oracle Payroll provides other ways for you to supply run result amounts for these elements when formulas are unnecessary, or when you need to add to, subtract from or replace calculated run results.
Follow this process to set up earnings, deductions, and other items in the compensation package you offer to employees. There are additional steps for setting up the following types of compensation and benefits:
Salaries for Salary Administration
Absence elements and PTO Accrual plans
Benefits
Items subject to collective agreements
See: Setting Up a Collective Agreement, Oracle HRMS Enterprise and Workforce Management Guide
Define validation for entries of any new elements you are creating for information. You can also define validation rules to add to elements generated for payroll processing.
To restrict compensation entries to a list of valid values, define a new Lookup Type and add Lookup Values for this new lookup.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
To validate compensation entries using formulas, write a formula of type Element Input Validation.
See: Writing Formulas for Validation, Oracle HRMS FastFormula User Guide
Define elements to hold information on tangible items distributed to employees. If you are not using Oracle Payroll, define elements to hold information on employee compensation and benefits.
See: Defining an Element for Information
See: Defining an Element's Input Values
Note: Every element you create automatically includes the Jurisdiction input value.
See also: Deleting an Element
Define frequency rules, if necessary, to determine the periods in which the element should be processed.
See: Defining Frequency Rules.
If you are using Standard or Advanced Benefits, also define elements for each activity rate calculation.
If you are using Oracle Payroll to process earnings and deductions:
Define additional tax categories, if you need them, by entering new Lookup Values for the following Lookup Types: CA_VOLUNTARY_DEDUCTIONS, CA_PAYMENT, CA_REGULAR_EARNINGS, CA_SUPPLEMENTAL_EARNINGS, CA_TAXABLE_BENEFITS, CA_EMPLOYER_LIABILITIES.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
Ensure that the following elements are linked to your payroll:
CPP EE Retro Exemption
CPP ER Retro Exemption
QPP EE Retro Exemption
QPP ER Retro Exemption
See: Tax Calculation Process, Oracle HRMS Payroll Processing Management Guide
Initiate earnings, non-payroll payments, and deductions to generate elements, formulas, and balances.
Review the generated items and customize them if necessary. For example, you can customize the processing rules, add validation rules, and add new user balances.
See: Reviewing Earnings and Deductions Structures
See: Customizing Generated Elements, Formulas, and Balances
If the payroll costs of an element should be distributed over other elements, define the distribution set.
Define element links to define one or more groups of employees who are eligible to receive an element.
See also: Running the Element Link Details Report
For elements without Standard links, make entries of your elements for all employees who should receive them.
You can review at any time the earnings types, non-payroll payments, and deductions you initiate in Oracle Payroll, as well as the earnings and deductions included with the system.
Note: US and Canada: When reviewing earnings or deductions, you may find two with the same name, the second however including the words "Special Inputs" (such as, Regular Salary and Regular Salary Special Inputs). The special inputs element exists to provide a convenient way to enter a change to an earnings or deduction before a payroll run. There is no special inputs element for net-to-gross earnings types.
Mexican implementations do not support special inputs.
To review the structures of earnings and deductions, use these windows:
Element
Formula
Formula Result Rules
US and Canada only: Earnings template
US and Canada only: Deductions template
Mexico only: Element Design wizard
To review processing and amount rules
For an earnings or payment, use the Earnings window/Element Design wizard, and query the earnings or payment.
For US and Canada, see: Initiating Earnings and Non-Payroll Payments, Oracle HRMS Compensation and Benefits Management Guide
For Mexico, see: Defining Earnings and Deductions Elements, Oracle HRMS Compensation and Benefits Management Guide
For a deduction, use the Deduction window/Element Design wizard, and query the deduction.
For US and Canada, see: Setting up Deductions, Oracle HRMS Compensation and Benefits Management Guide
For Mexico, see: Defining Earnings and Deductions Elements, Oracle HRMS Compensation and Benefits Management Guide
To review input values and balance feeds
Using the Element window, query the earnings, payment, or deduction.
Click Input Values to review the input values.
Every element has the default Jurisdiction input value.
Click Balance Feeds to review the balance feeds.
To review formulas and formula result rules
Query the earnings, payment, or deduction in the appropriate window:
Formula window
See: Writing or Editing a Formula, Oracle HRMS FastFormula User Guide
Formula Result Rules window
When you initiate the earnings, non-payroll payments and non-tax deductions your enterprise requires, Oracle Payroll generates:
Elements
Balances and balance feeds
Formulas for payroll calculations and element skip rules
Formula processing and result rules
You can modify these generated components to enhance their suitability or efficiency for use at your installation. Some modifications can be made even after processing has occurred, but most should be made before processing the element in a payroll run.
Important: If a generated element requires changes because of mistaken entries made when initiating the earnings or deduction, it is best to delete the results and re-initiate.
For example, if you select the wrong processing rule or amount rule when initiating an earnings or deduction, simply delete the generated components and begin again.
| Use This Window . . . | For . . . |
|---|---|
| Element | Modifying Processing Rules of Generated Elements, Selecting Foreign Currencies, Entering Qualifying Conditions, Setting Up Earnings for Record of Employment, Oracle HRMS Payroll Processing Management Guide (Canada) Processing rules include: termination rules, closed for entry, process in run, third party payment, processing priority, and skip rule |
| Frequency Rules | Defining Frequency Rules for recurring deductions |
Note: When modifying generated elements, save them as corrections (not updates).
| Use This Window . . . | For . . . |
|---|---|
| Further Element Information | Setting Processing Frequencies for Involuntary Deductions, Changing Run Types for Deductions, Changing Insufficient Funds Type for Deductions, Setting Allocation of Earnings for ROE, Oracle HRMS Payroll Processing Management Guide (Canada) |
| Use This Window . . . | For . . . |
|---|---|
| Input Values | Defining Input Values, Entering Element-level Defaults, Defining Entry Validation |
| Use This Window . . . | For . . . |
|---|---|
| Balances | Defining User Balances |
| Balance Feeds | Creating Balance Feeds |
| Use This Window . . . | For . . . |
|---|---|
| Exclude Balances | Excluding Balances From an Element's Grossup Calculation |
| Use This Window . . . | For . . . |
|---|---|
| Formulas | Writing or Editing a Formula, Oracle HRMS FastFormula User Guide |
| Formula Result Rules | Modifying Formula Processing and Result Rules |
Oracle Payroll generates elements when you initiate earnings and deductions. Using the Element window, you can modify some of the processing information for these elements.
Do not change the following options:
Processing type (recurring or nonrecurring)
Indirect results only
The Additional Entry Allowed rule has no applicability for North American installations. It is available for use at sites outside North America, and benefit classifications do not apply in Canada.
To modify processing information
In the Element window, query the generated element you are modifying.
To control the processing of entries to the element after employee termination, you can select an alternative termination rule.
If the termination rule is Actual Termination, and the element's processing type is recurring, entries to the element close down on the employee's termination date. If the element's processing type is nonrecurring, entries close down either on the last date of the pay period in which the employee leaves or on the date the assignment ends (the final process date) if this is earlier.
If the termination rule is Final Close, entries to the element stay open beyond the actual termination date. This makes it possible to pay bonuses, severance pay, and so on, and to make year end adjustments after the employee's actual termination date.
Note: Recurring elements with the Final Close rule only process in runs after the Last Standard Process Date if there is also a nonrecurring entry to process in that run.
If the termination rule is Last Standard Process, entries to the element are not processed after the Last Standard Process date. The Last Standard Process date defaults to the last day of the pay period in which the employee is terminated, but you can set it to a later period when you terminate an employee. This is the appropriate rule for many recurring earnings types.
You can prevent the element from accepting any new entries, either temporarily or permanently, as of a certain date. Set the effective date to the date from which you want to close down the element, and check Closed for Entry. This does not affect any existing entries.
Note: Use the Closed for Entry feature with caution. When you perform certain important tasks in Oracle HRMS, the system may automatically create or delete element entries. These tasks include hiring and terminating people, and updating assignments. Therefore, if you check Closed for Entry for an element, this might prevent users terminating employees and updating assignments. If there are standard links for the element, it will also prevent users hiring people who are eligible for the element.
You can control an element's availability for processing in runs by selecting or deselecting the Process in Run box.
To make third party payments from an earnings or deduction element, check the Third Party Payment box.
If you want to determine the order in which the element processes within its classification range, you can change the default priority number appearing in the Priority field. The payroll run processes elements with lower priority numbers first.
You can select a skip rule for the element in the Skip Rule field.
To select foreign currencies for element entries or run results
Define the balances required to hold amounts of the local currencies if you set up earnings types to produce payments in local currencies (instead of the ledger currency of the Business Group). The system does not generate these balances.
To make entries for the element in a currency other than the Business Group's ledger currency, select the currency in the Currency Input field.
For example, if the element represents a housing allowance of 500 pounds sterling paid monthly to a North American employee working in the UK, you select GBP as the input currency.
To produce run results in a currency other than the Business Group's ledger currency, select the currency in the Currency Output field.
To set qualifying conditions for receiving element entries
If there is a minimum age for employees to receive the element, enter it in the Age field.
If employees must complete a minimum length of service before receiving the element, enter a number in the Length of Service field and select a unit of measure (such as months or years) in the Units field.
To automatically enter the element and its default input values for all eligible employees, check the Standard box.
You cannot check this box for nonrecurring elements, or for those with the rule Multiple Entries Allowed.
Note: The qualifying conditions and Standard check box provide defaults for the element. You can override them for particular groupings of employees when you build links for the element.
To set an iterative priority
Pre-tax deductions are calculated iteratively to ensure that the maximum amount is deducted while ensuring that taxes and garnishments are paid in full, and net pay is zero or a positive amount. If multiple pre-tax elements are given to an employee, the element with the lowest processing priority (that is, the highest priority number) will be reduced first when there are insufficient earnings. You can also set an iterative priority.
Important: Iterative priority numbers must be in the reverse sequence of the processing priority numbers. This means that the element that is processed first is reduced last.
Choose the Advanced tab.
Enter a value in the Iterative Priority field.
The element with the lowest iterative priority number is reduced first. If this deduction is reduced to zero and net pay is still insufficient to cover taxes and garnishments, the element with the next lowest priority number is reduced, and so on.
Note: Do not choose the Exclude Balances button for pre-tax deductions. You use the Exclude Balances window when you are defining net-to-gross earnings; it is not relevant for pre-tax deductions.
To add or change further information
In the Element window, query the element you are modifying. Click in the Further Information field (in the lower right-hand corner of the window). This opens the Further Element Information window.
The fields that appear in this window depend on the primary classification of the element. Use these fields to make the entries described below.
Note: The names of certain balances that the system can accumulate for an earnings type or deduction appear in fields of the Further Element Information window. Whether a balance actually does accumulate depends on the selections made in the Earnings or Deduction window.
For example, the Arrears balance accumulates only for deductions for which you have selected an Arrearage rule.
To set the processing frequency of a deduction
Select a processing period in the field Period Type. For example, for a deduction that should be taken once each month, select the period type Calendar Month.
Note: When a deduction does not have the same processing frequency as a payroll, give the deduction a frequency rule for the payroll using the Frequency Rules window.
For example: If a deduction taken monthly should process in the second period of the month for the semi-monthly payroll, check 2 as this deduction's regular processing period for this payroll. You can enter or change deduction frequency rules for payrolls at any time.
To change a deduction's run type
Change the selection in the Processing Run Type field. The choices are:
Regular (process only in Regular runs)
All (process in both Regular, Non-periodic, and Lump Sum runs).
To change a deduction's insufficient funds type
Change the selection in the Insufficient Funds Type field. The choices are:
No Arrearage and No Partial Deduction
Arrearage and No Partial Deduction
No Arrearage and Partial Deduction
Arrearage and Partial Deduction
Error on Arrearage
If your selected type includes Arrearage, the system will hold an arrears balance for the deduction. The arrears balance takes the deduction's name.
If your selected type includes Partial Deduction, the system takes a partial amount when earnings are insufficient to take the full deduction amount.
Note: If you select 'No Arrearage and Partial Deduction', the system takes a partial amount when earnings are insufficient but does not hold the amount not taken in an arrears balance.
To enter year end information
Select a Year End form. This determines the values you can select in the Federal and Provincial Footnotes fields. Select the approriate footnote to print on the year end form for this earnings type.
To enter the registration number
Enter the number in the Registration Number field. This number appears on year end forms.
To adjust or replace the Regular Salary or Regular Wages entry
If the element is nonrecurring, you can select how the element entry affects Regular Salary and Regular Wages. Notice that the Regular Salary or Wages entry is processed unchanged when there is no entry of this element.
Select a value in the Regular Earnings Adjustment field to specify whether the element entry replaces (T), adds to (A), or reduces (R) the Regular Salary or Regular Wages entry.
Recurring elements may require frequency rules to determine in which pay periods they should process. For example, a monthly deduction might be processed in the third period of the month for weekly-paid employees and in the second period of the month for employees paid on a semi-monthly basis.
It is possible to set frequency rules to process once- or twice-yearly deductions on monthly, quarterly, or semi-annual payrolls. These rules' periods then refer to periods within a year (months, quarters or half years) instead or periods within a month. However, for infrequent deductions, you may prefer to define them as nonrecurring and use BEE to make entries when required.
Use the Frequency Rules window to define or change an element's frequency rules at any time.
US and Canada Payroll only: Use the Deduction form to define or change a deduction's frequency rules.
Mexico only: Use the Element Design Wizard to define or change a deduction's frequency rules.
To define frequency rules
Select the name of the payroll for which you want to define frequency rules.
In the Date field, you can override the default date that the payroll run uses to assess the frequency rule, if required.
For example, suppose you are defining frequency rules for a monthly deduction. If you select Effective Date for a Weekly payroll and check Processing Period 1, the payroll run only takes the deduction if the run's effective date is in the first week of the month.
Check the boxes for the processing period or periods in which you want the element to process for each payroll.
For example, if you want a monthly deduction to process in the second week of the month for a weekly payroll, check the box under 2 for that payroll.
Notice that some periods are not available for all payrolls. For example, a bi-weekly payroll can only have, at most, three periods a month, so periods 4, 5, and 6 are not relevant to this payroll.
Use the Formula Result Rules window to modify the formula processing rules assigned to an element. These rules are generated by the system when you initiate an earnings or deduction. If you substitute a modified formula for the one generated for an element, or write additional formulas for the element, you also need to modify or write new processing and result rules.
At minimum, an element needs one standard processing rule. This identifies the formula the payroll run uses to process the element for employees with an Active assignment status (and a Payroll system status of Process). It is also the default formula for other assignment statuses. However, you can define other processing rules if you need to use different formulas for assignments at other statuses. For example, you could have two rules for a Wages element: Standard Wages and Paid Training Leave.
Also use this window to define how each formula result is used by the payroll run.
To modify processing rules with elements
Set your effective date to the start date for the processing rule.
Select the element you want to modify. The element's description and classification automatically display.
Click Find to display any existing processing rules for this element.
In the Processing Rules region, modify the formula selections and assignment statuses for this element.
Note: If you select a formula with inputs that do not match the element, you will receive a warning message, but you can still save your rule. Remember to update the formula before running the payroll.
Save your entries.
To modify formula result rules for each processing rule
Click on a processing rule to select it.
In the Formula Results region, select a formula result name from the list of results specified when the formula was written.
Select the appropriate formula result type. There are five possible types:
Direct result: This is the element's run result (if you send the result to the element's pay value), or a direct result updating another of the element's input values.
Indirect result: This result passes as an element entry to another nonrecurring element not yet processed.
Message: The formula issues messages under certain conditions. For example, a formula can check a loan repayment balance and, if the balance is zero, issue the message "Loan is repaid." You read formula messages using the View Run Messages window.
Order Indirect: This result updates the subpriority of the element you select in the Element field.
Stop: This formula result uses the Date Earned of the payroll run to put an end date on a recurring entry of this or another element (which must be defined with multiple entries not allowed).
Update recurring entry: This result updates recurring entries of this or another element on the effective date of the payroll run. The receiving element must be defined with multiple entries not allowed unless you are passing a recurring element's entries to itself, that is updating another entry of the same element.
Important: If your result type is Update Recurring Entry, then any future dated changes to the entry will be overwritten by the results of the current payroll run.
For all formula result types except Direct Result or Message, select the name of the element to which you want to pass the formula result. This element must have a processing priority causing it to process after the element sending the result.
For the formula result types Direct Result, Indirect Result, and Update Recurring Entry, select the input value to update.
If you select Message as the formula result type, select a message severity level. There are three choices:
Fatal: When a message with this severity results from your formula, the run rolls back all processing for the employee assignment.
Warning: A message with this level of severity does not affect payroll processing but warns the user of a possible problem.
Information: A message with this level of severity simply gives information.
Correcting and Updating Processing Rules
When you add a formula result, it takes on the effective end date of its processing rule. Any date effective changes you make to existing processing rules can affect formula results as follows:
Update: If you update a processing rule or give it an effective end date, all the rule's currently effective and future-dated formula results automatically get identical end dates.
Correction: If you correct a processing rule, all its currently effective and future-dated formula results remain unchanged.
Future delete: If you delete all future changes scheduled for a processing rule, this also deletes any future changes scheduled for the rule's formula results.
Balances show the positive or negative accumulation of particular values over periods of time. They are fed either by the direct run results (that is, Pay Values) of elements processed in the payroll run, or by input values. For example, in North American installations, the input value Hours of the element Time Entry Wages feeds the balance Regular Hours Worked.
Balances exist for various time dimensions, such as current run, period to date, month, quarter to date, and year to date.
Balances also exist at different levels, such as assignment level or person level. Balances for individual employee assignments are at the assignment level (in North America, they can be at the assignment level within a GRE). If your enterprise permits employees to hold more than one assignment at the same time, you can hold balances at the person level. For example, a person level Gross Earnings balance is the sum of an employee's assignment level Gross Earnings balances.
You can select elements to feed a balance in three ways:
Select a primary classification. The run results of all elements in the classification feed the balance. However, you must have an input value of Pay Value if you want to create a feed between an element and a balance.
Select a secondary classification. You choose which elements from a primary classification (such as Earnings) are to feed the balance by giving these elements a secondary classification. Again it is the run results of the elements that feed the balance.
Note: Secondary classifications are not used in the North American versions of Oracle Payroll at this time.
Select an individual element. You can select either the run result or an input value to feed the balance. The input value must have the same unit of measure (such as hours or number) as the balance.
You can choose any number of classifications or any number of elements to feed a balance. However you cannot use a mixture of classifications and individual elements to feed a balance. When you select an element or classification as a balance feed, you specify whether the run results (or input values) should add to or subtract from the balance.
The balances and balance feeds for the elements supplied with Oracle Payroll are present in the system when you receive it. For North American users, when you initiate earnings types, deductions and other items that process in the payroll run, the system generates the appropriate balances and balance feeds together with the necessary elements.
You can define any additional balances your enterprise requires. For example, you may require a Pensionable Earnings balance for a pension plan your enterprise offers employees.
Oracle Payroll for Canada supplies a number of seeded balances for printing on T4, T4A, RL–1 or RL–2 forms. Some of these balances have predefined feeds. For others, you must create feeds from the user-defined elements whose year-to-date values you want to include in the relevant year end forms and boxes, as shown in the following tables.
| For this box | Use this balance | Description | Predefined Feed? |
|---|---|---|---|
| Box 14 | 'Gross Earnings' less 'Taxable Benefits for Quebec' less 'T4 Non Taxable Earnings' | Employment income | Yes for Gross Earnings. No for T4 Non Taxable Earnings. Elements in the Taxable Benefits classification and PHSP category automatically feed the 'Taxable Benefits for Quebec' balance. You can add other feeds. |
| Box 16 | CPP EE Withheld | Employee's Canada Pension Plan (CPP) contributions | Yes |
| Box 17 | QPP EE Withheld | Employee's Quebec Pension Plan (QPP) contributions | Yes |
| Box 18 | EI EE Withheld | Employee's Employment Insurance (EI) premium | Yes |
| Box 20 | T4_BOX20 | Registered Pension Plan (RPP) contributions | No |
| Box 22 | FED Withheld and FED Supp Withheld | Income tax deducted | Yes |
| Box 24 | EI EE Taxable | Employment Insurance insurable earnings | Yes |
| Box 26 | CPP EE Taxable or QPP EE Taxable | Canada Pension Plan or Quebec Pension Plan pensionable earnings | Yes |
| Box 44 | T4_BOX44 | Union dues | No |
| Box 46 | T4_BOX46 | Charitable donations | No |
| Box 52 | T4_BOX52 | Pension adjustment | No |
| Other Info | T4_OTHER_INFO_AMOUNT30 to T4_OTHER_INFO_AMOUNT77 | Other information | No |
| For this box | Use this balance | Description | Predefined Feed? |
|---|---|---|---|
| Box 16 | T4A_BOX16 | Pension or Superannuation | No |
| Box 18 | T4A_BOX18 | Lump sum payments | No |
| Box 20 | T4A_BOX20 | Self employed commissions | No |
| Box 22 | FED Withheld and FED Supp Withheld | Income tax deducted | Yes |
| Box 24 | T4A_BOX24 | Annuities | No |
| Box 26 | T4A_BOX26 | Eligible retiring allowances | No |
| Box 27 | T4A_BOX27 | Non eligible retiring allowances | No |
| Box 28 | T4A_BOX28 | Other income | No |
| Box 30 | T4A_BOX30 | Patronage allocations | No |
| Box 32 | T4A_BOX32 | Registered pension plan contributions (past service) | No |
| Box 34 | T4A_BOX34 | Pension adjustment | No |
| Box 40 | T4A_BOX40 | RESP accumulated income payments | No |
| Box 42 | T4A_BOX42 | RESP educational assistance payments | No |
| Box 46 | T4A_BOX46 | Charitable donations | No |
| For this box | Use this balance | Description | Predefined Feed? |
|---|---|---|---|
| Box A | 'Gross Earnings' less 'Taxable Benefits for Federal' less 'RL1 Non Taxable Earnings' | Employment income before source deductions | Yes for Gross Earnings. No for Taxable Benefits for Federal and RL1 Non Taxable Earnings |
| Box B | QPP EE Withheld | Contributions to the Quebec Pension Plan (QPP) | Yes |
| Box C | EI EE Withheld | Employment Insurance premiums | Yes |
| Box D | RL1_BOXD | Contributions to a registered pension plan (RPP) | No |
| Box E | PROV Withheld and PROV Supp Withheld | Quebec income tax withheld at source | Yes |
| Box F | RL1_BOXF | Union dues | No |
| Box G | QPP EE Taxable | Pensionable earnings under the Quebec Pension Plan (QPP) | Yes |
| Box H | RL1_BOXH | Meals and accommodation | No |
| Box I | RL1_BOXI | Use of a motor vehicle for personal purposes | No |
| Box J | RL1_BOXJ | Contributions paid by the employer under a private health services plan | No |
| Box K | RL1_BOXK | Trips made by a resident of a designated remote area | No |
| Box L | RL1_BOXL | Other benefits | No |
| Box M | RL1_BOXM | Commissions included in the amount in box A or box R | No |
| Box N | RL1_BOXN | Charitable donations | No |
| Box O | RL1_BOXO_AMOUNT_RA to RL1_BOXO_AMOUNT_RZ | Other income not included in the amount in box A | No |
| Box P | RL1_BOXP | Contributions to a multi-employer insurance plan | No |
| Box Q | RL1_BOXQ | Deferred salary or wages | No |
| Box R | PROV STATUS INDIAN Gross | Tax-exempt income paid to an Indian | Yes |
| Box S | RL1_BOXS | Tips received | No |
| Box T | RL1_BOXT | Tips allocated | No |
| Box U | RL1_BOXU | Phased retirement | No |
| For this box | Use this balance | Description |
|---|---|---|
| Box A | Life Annuity Payments Unregistered plan and Life Annuity Payments registered plan | Life annuity payments under a registered or an unregistered pension plan |
| Box B | Benefits from RRSP RRIF DPSP and Annuities | Benefits under a RRSP, a RRIF, or a DPSP, and annuities |
| Box C | Other Payments | Other payments |
| Box D | Refund of RRSP Premiums paid to surviving spouse | Refund of RRSP premiums paid to surviving spouse |
| Box E | Benefits at the time of death | Benefit deemed to have been received at the time of death (RRSP or RRIF) |
| Box F | Refund of Undeducted RRSP contributions | Refund of undeducted RRSP contributions |
| Box G | Taxable Amount revoked registration RRSP or RRIF | Amount that is taxable because of the revocation of the registration of an RRSP or RRIF |
| Box H | Other Income RRSP or RRIF | Other income (RRSP or RRIF) |
| Box I | Amount entitlement deduction for RRSP or RRIF | Amount giving entitlement to a deduction (RRSP or RRIF) |
| Box J | PROV Withheld and PROV Supp Withheld | Quebec income tax withheld at source |
| Box K | Income earned after death RRSP or RRIF | Income earned after death (RRSP or RRIF) |
| Box L | Withdrawal under the Lifelong Learning Plan | Withdrawal under the Lifelong Learning Plan (LLP) |
| Box M | Tax Paid Amounts | Tax-paid amounts |
| Box O | Withdrawal under the Home Buyers Plan | Withdrawal under the Home Buyer's Plan (HBP) |
Oracle Payroll users can define secondary classifications to create subsets within primary classifications. You decide which elements, from a primary classification, are in each secondary classification, then you use the secondary classification to feed balances.
Note: If you are an HR-only user, you cannot define secondary classifications. For more information on user types and the associated HR: User Type profile option, see: User Profiles, Oracle HRMS Configuring, Reporting, and System Administration Guide.
To create secondary element classifications
Query a primary element classification. The check box indicates whether it is for nonpayment elements. These are elements that do not feed the Payments balance.
On the Priority, and Costing tabs, you can view the following information about the classification:
Priority: The processing range displays together with the default priority.
Costable: If this check box is checked, you can select all costing options on the element link for elements of this classification, including Not Costed.
Distributable: If this check box is checked, you can create a distribution set from elements of this classification over which you can distribute costs.
Debit or Credit: These option buttons display the cost type for elements in the classification, that is, whether the accounts they feed are to be debited or credited.
On the Frequency Rules tab, you can view the following information about the classification:
Enabled: If this check box is checked, you can define frequency rules for elements of this classification. The payroll run uses a frequency rule to determine in which pay periods it processes a recurring element.
Date: The date the payroll run uses, by default, to assess frequency rules in your localization. You can select a different date when you define a frequency rule.
Enter a unique name for the secondary classification you want to associate with the displayed primary classification. You can also add a description.
Select the Default check box if you want all elements in the primary classification to be in the secondary classification by default. Then, if there are any exceptions, you must manually remove these elements from the secondary classification. You can do this at any time using the Balance Feed Control window, which opens from the Element window.
Note: For some legislations, Oracle Payroll has already defined a number of secondary classifications. Some of these are default classifications, but not all. You cannot delete these classifications, and you cannot delete them from the Balance Feed Control window for predefined elements.
Use the Balance Feeds window to select balances to be fed by the input values of an element. Balances are either fed by whole classifications of elements or by individual elements, but not by both. Therefore, in this window you cannot select balances that are fed by classifications. You can query a balance in the Balance window and choose the Classifications button to view the list of classifications that feed it.
You can use an element to feed as many balances as you require.
To create balance feeds for one element
Set your effective date to when you want the balance feed to start.
Enter or query the element in the Element window and choose the Balance Feeds button.
In the Balance Feeds window, select the input value that you want to feed the balance with.
The list displays all the input values defined for the element. These input values may have different units of measure. When you select an input value its unit of measure displays in the Units field. To feed a balance with the element's direct run result, select Pay Value.
Select the balance you want the input value to feed.
The list restricts your choice to balances having the same unit of measure as the input value you selected.
Select Add or Subtract for the balance feed.
Note: Secondary classifications and balance feed controls currently do not apply to the US version of Oracle Payroll.
In the Balance Feed Control window, you can classify an element using secondary classifications. These determine the balances that the element feeds. You can query a balance in the Balance window and choose the Classifications button to view the list of classifications that feed it.
To select or remove secondary element classifications
Set your effective date to when you want the element to begin feeding the balances that the secondary classifications feed.
Enter or query the element in the Element window and choose the Balance Feed Control button.
In the Balance Feed Control window, delete any default secondary classifications you do not require for the element.
When this window opens, it displays any default secondary classifications for the element's primary classification. Unless they are predefined, you can delete any of these classifications, and you can change their effective start dates.
Select any non-default secondary classifications you require.
Defining a balance includes defining its feeds and dimensions. When selecting feeds for the balance you have to choose between specifying element input values directly, and selecting element classifications to determine the feeds. You cannot choose both methods together.
You can group similar balances - such as all earnings balances - in a single category for quicker and easier processing. Each localization has a defined set of categories. If there are no categories in the list of values, this means your legislation is not yet using the category functionality.
Balances often share a common relevancy to certain assignments. In some localizations, you can define base balances to imply a relationship between the balances that can be relied upon when processing and reporting. For example, "Loan Repayment" could be the base balance for "Loan Repayment Arrears".
You define balances in the Balance window.
To define a user balance
Do one of the following:
Enter a unique name and a reporting name for the new balance. If you do not provide a reporting name, the first seven characters of the balance name appear on reports.
Query any user balances you want to change.
Optionally, select a balance category in the Category field.
Australian Users: Attach all user-defined balances to the relevant balance category and to the _ASG_RUN and _ASG_YTD dimensions to populate the run balances. You must attach all user-defined allowance balances required to be reported individually on the Payment Summary to the Balance Category of Allowance and to the _ASG_LE_RUN and _ASG_LE_YTD dimensions.
New Zealand Users: You must assign a balance category for each element that you define.
Optionally, select a Base Balance.
Enter the unit of measure for the balance. The choices are days, hours (listed in different formats), integer, money and number. If you select money as the unit you must also select a currency.
Note: Do not select the Use for Remuneration check box. This displays the balance that has been predefined as the Remuneration balance. Only one balance within a legislation can have this value.
To define a primary balance - one fed by a single element - select an element and input value in the Primary Balance region (if this region is available for your localization).
Go to the Balance Feeds window or the Balance Classifications window.
Set your effective date to the start date for the balance feeds.
Select one or more elements to feed the balance. Only those elements whose input values have the same unit of measure as the balance are listed.
When you select an element, its classification is displayed. You can select elements with different classifications.
Select the input value that is to feed the balance.
For most payroll balances select Pay Value so that the element's run result feeds the balance.
Select Add or Subtract for the balance feed.
Select one or more element classifications and select Add or Subtract for each. The run results of all elements in the classification will feed the balance.
The list includes all the primary and secondary element classifications that are valid for this balance. If you select a secondary classification, you cannot also select its parent primary classification.
Note: Secondary classifications are not used in the North American or Singapore versions of Oracle Payroll at this time.
Choose the Dimensions button.
Select the dimensions you require.
New Zealand Users: For each new balance, you must attach the balance dimension _ASG_RUN for it to generate run balances.
Australian Users: Select the _ASG_RUN and _ASG_YTD dimensions for all user-defined balances. You must attach the _ASG_LE_YTD and _ASG_LE_RUN dimensions to the allowance balances required in the Payment Summary reports.
You can remove any dimension previously selected for a user-defined balance. You can also add dimensions to the startup balances included with your system, and later remove these additional dimensions. However, you cannot remove the dimensions that were predefined for the startup balances.
Note: To hold balances for a fiscal year that is different from the calendar year, you must supply the fiscal year start date for your Business Group.
Optionally, select the Grossup Balance check box for one of the dimensions, to make the balance eligible for grossup.
UK users: If you want to make the balance eligible for grossup, you must select this check box for the _ASG_RUN dimension.
Choose the Initial Feed button.
In the Initial Balance Feed window you can see details of the element and input value used for the Initial Balance feed. This feed is defined by implementation consultants prior to performing an initial balance upload at implementation time.
Choose the Attributes button.
Select an attribute definition and a dimension.
Balance attributes identify which balances can be used in which reports. Attributes can be predefined by localizations, created as a result of predefined defaults, or you can enter them in this window.
Note: For UK SOE Balances, ensure you attach the attribute to the Balances1 segment in the Business Group Information. Attach the attribute to each balance you want to display on the Online SOE. For every balance with an attached attribute, you must add individual balance to the SOE Details Information (in the Business Group Information).
The balances you attach to the SOE Details Information are defined at business group level, hence even if you change the user category profile it will not have any result on the data defined in the SOE Details Information.
Additional Information: Saudi Users: Oracle Payroll provides Saudi SOE Balance Attributes to view the SOE report. You can use the predefined balance attributes or create your own balance attributes.
For elements that require a net-to-gross (or grossup) calculation, you can specify which balances are included in the calculation. By default, all balances that can be grossed up are included. Use the Exclude Balances window to view these balances and to exclude any of them from the element's calculation.
US and Canadian users: You can exclude additional balances for individual element entries using the Gross Up Balances window (which opens from the Element Entries window).
To exclude balances from an element's grossup calculation
Enter or query the element in the Element window - making sure the Gross Up check box on the Advanced tab is checked - and choose the Exclude Balances button.
Select any balances that you want to exclude from the element's calculation. The list of values shows all balances that are eligible for grossup.
Note: A balance is eligible for grossup if the Grossup Balance check box is checked for one of its dimensions in the Balance Dimensions window.
Save your work.
Setting initial values for balances is an essential task for new customers migrating from other systems.
Such balances typically consist of both legislative and customer defined balances. For example, a legislative balance could be the amount of tax deducted for each employee during the tax year. A customer defined balance could be the number of vacation days taken by each employee during the calendar year.
The correct initial setting of these balances is essential for subsequent processing to be valid.
The Initial Balance Upload process allows the specification and loading of initial balances into the system. System implementers use this process once only, on migration. After that, balance maintenance is carried out automatically by Oracle Payroll.
To load initial balances into Oracle Payroll
Define an element and input value for the initial balance feed. Select the classification Balance Initialization for this element.
Set up initial balance values in the tables
PAY_BALANCE_BATCH_HEADERS
PAY_BALANCE_BATCH_LINES
For more information, see the technical essay: Balances in Oracle Payroll, Oracle HRMS Implementation Guide.
In the Submit Requests window, select Initial Balance Upload.
Run one or more of the four modes as appropriate:
Validate: checks the details in the batch to be uploaded
Transfer: creates the balances in the batch
Undo transfer: reverses the effects of a transfer
Purge: removes the batch from the batch tables
Select the batch to be processed.
Choose the Submit button.
Continue to run the process for as many modes as you require.
| Classification: | Earnings |
| Category: | Regular |
| Processing Type: | Recurring |
The earnings types Regular Salary and Regular Wages can process in the Regular run each period to produce regular pay for salaried and waged employees, respectively.
| Name | Purpose of Entry |
|---|---|
| Periodic Salary | Gives amount of employee's periodic salary to formula. |
| Jurisdiction | Jurisdiction cannot be entered for this element. If you wish to override the default behavior of the Regular Wages element (i.e., tag the regular pay to a different jurisdiction) use the nonrecurring element, Time Entry Wages. |
Note: The default behavior of Oracle HRMS is not to process the Regular Salary and Regular Wages elements when the assignment status of an employee is not Active (System Status is not set to 'Active Assignment). If the Process Reg Sal on Inactive Asg (PROC_REG_SAL_INACT) payroll action pay action parameter value is set to Y, then the application overrides the default behavior and processes the Regular Salary and Regular Wages elements as normal during payroll run as long as the Payroll Status is set to 'Process. For more information about pay action parameters, refer to the Oracle HRMS Implementation Guide.
| Name | Purpose of Entry |
|---|---|
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Jurisdiction | Jurisdiction cannot be entered for this element. If you wish to override the default behavior of the Regular Wages element (i.e., tag the regular pay to a different jurisdiction) use the nonrecurring element, Time Entry Wages. |
For information about the Wage Rates table, see: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
Working together with the Regular Salary and Regular Wages earnings are two additional elements, Time Entry Wages, and Regular Hours Worked.
| Classification: | Earnings |
| Category: | Regular |
| Processing Type: | Nonrecurring |
| Name | Purpose of Entry |
|---|---|
| Hours | Gives hours worked to Regular Wages formula. |
| Rate | Overrides rate appearing on Regular Wages. |
| Rate Code | Overrides rate code appearing on Regular Wages. |
| Shift | For information only. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
For information about the Shift Differentials table, see: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
Time Entry Wages functions to receive timecard data through the Batch Element Entry (BEE) facility. As well as hours worked, it can receive overrides to existing Regular Wages entries, and other information affecting employees' pay.
Entries to Time Entry Wages also signal to the Regular Salary and Regular Wages formulas that waged employees required to submit timecards with hours worked each period have in fact done so.
| Classification: | Information |
| Category: | Regular Hours |
| Processing Type: | Nonrecurring |
| Name | Purpose of Entry |
|---|---|
| Pay Value | Receives entries of hours worked for use in reports. |
Regular Hours Worked functions to receive entries of each employee's hours worked as indirect results of the Regular Salary and Regular Wages formulas. You do not enter the hours worked - they are entered automatically during the payroll run. Oracle Payroll can then access these entries for use in reports such as the Statement of Earnings and Earnings Audit.
The payroll run passes information to this Information element as an indirect result of processing Regular Wages, and Time Entry Wages. The element holds information about the number of hours worked at a particular rate so that the statement of earnings can display earnings by hourly rate.
(except for final pay to terminating employees)
The formula for these earnings types does the following:
Checks employee's assignment to see if timecard is required.
IF timecard is not required:
Calculates salary or wages due. Feeds results into Regular Pay balance for the employee.
Checks employee's work schedule or standard working hours to locate hours worked in period.
ELSE IF timecard is required because employee must submit hours worked on timecard to receive pay
Checks whether Time Entry Wages element has received current entries of hours worked from timecard.
IF no entries exist, issues message No timecard entries exist, and does not calculate pay.
IF entries exist, locates correct pay rate and calculates earnings due. Feeds results into Regular Pay balance for the employee. Enters hours and any other period-specific information on employee's record. Sends hours worked to Regular Hours Worked element for reports such as Statement of Earnings and Earnings Audit. Sends hours worked and rate paid to Hours by Rate element for reports such as Statement of Earnings.
| Classification: | Earnings |
| Category: | (none) |
| Processing Type: | Recurring |
The Vacation Bank Payout element pays out the vacation pay owing based on the applicable percentage of earnings for the employee. You can set up these percentages against length of service bands in a user table. There is a sample user table called Default Vacation Bank.
You can use this element to pay out a specified amount or the full accumulated value. The accumulated amount is held in the Vacation Bank Accumulator element.
The following table describes the input values for the Vacation Bank Payout element.
| Name | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Vacation Bank Payout run result. |
| Payout Type | Two possible values: Accumulated Payout, meaning all money accumulated is to be paid out, or Payout Amount. |
| Amount | If the Payout Type is Payout Amount, gives the amount to be paid. |
| Jurisdiction | Value entered by the Payroll Run. |
| Classification: | Information |
| Category: | (none) |
| Processing Type: | Recurring |
The Vacation Bank Accumulator element accumulates the vacation liability based on the applicable percentage of earnings for the employee.
The following table describes the input values for the Vacation Bank Accumulator element.
| Name | Purpose of Entry |
|---|---|
| User Table Name | Name of user table that holds length of service bands. |
| User Table Column | Column of user table that holds the % of vacationable earnings to be paid as vacation pay. |
| Start Date Type | Currently restricted to Hire Date. |
| Override Rate | Gives the formula a percentage to use instead of looking up a value in the user table. |
| Jurisdiction | Value entered by the Payroll Run. |
You initiate the earnings types and non-payroll payments you need in accordance with your own compensation policies, by entering information about them in the Earnings window.
In response to your entries in this window, Oracle Payroll generates an element for the earnings or payment, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
The following earnings types are predefined in Oracle Payroll:
Regular Salary and Regular Wages
These types produces regular pay for salaried and hourly paid employees respectively.
Vacation Bank Payout
This type pays out the vacation pay owing based on the applicable percentage of earnings for the employee.
Note: You cannot query for predefined earnings in the Earnings form.
You can record hours worked, override rates, or shifts from timecards, using the predefined Time Entry Wages element. Entries to this element override the values on the Regular Wages element.
Oracle Payroll uses the predefined Regular Hours Worked element to record the hours worked for reports such as the statement of earnings. You can create a regular non worked hours element (such as jury duty) to record time spent on non-work activities. The system automatically reduces regular hours worked and regular wages so that the correct information is displayed on the statement of earnings.
Wages, overtime pay, and shift pay are typically calculated by multiplying an hourly rate by number of hours worked. Oracle Payroll captures this information for each rate that applies during the payroll period. So if an assignment has element entries paid at different rates during a period, you can display the earnings at each rate on the statement of earnings, online payslip, cheque writer, and deposit advice.
This information is automatically available for predefined earnings types: regular wages, and time entry wages. It is also available for any earnings type you initiate with the calculation rule Hours x Rate, or Hours x Rate x Multiple.
You can define earnings types of a fixed net amount and Oracle Payroll will calculate the additional amount you need to pay to cover taxes and other deductions.
If you need to delete elements you created with the Earnings template, do not use the Element window. Query the element from within the Earnings template and delete it from there.
See: Deleting an Element
The regular non-worked hours functionality enables you to date effectively reduce Regular Wages for earnings types you specify according to your business rules, such as jury duty, paid holidays etc.
The effects of reducing earnings using regular non-worked hours are seen on the employee's Statement of Earnings. When earnings are reduced for an earnings category such as jury duty, the SOE shows an amount and hours for the employee's regular work actually performed and an amount and hours for the regular non-worked hours.
For example, if a salaried employee, paid bi-weekly, reports 16 hours of jury duty time off this pay period, the employee's SOE might look like this:
| Regular Salary | 64 hours | $6400 |
| Jury Duty Pay | 16 hours | $1600 |
Note that the sum of the hours worked ("Regular Salary") and non-worked hours ("Jury Duty Pay") equals the regular hours (80 hours, in this example).
Without noting the regular non-worked hours difference, the same employee's SOE might look like this:
| Regular Salary | 80 hours | $8000 |
Important: Regular non-worked hours are distinct from the predefined earnings types that are used on accruals, such as Paid Time Off. Regular non-worked hours do not require any kind of accrual plan.
In response to the information you enter for an earnings type or non-payroll payment in the Earnings window, the system generates the essential components of the earnings or payment. These include:
An element whose structure includes the necessary input values and balance feeds
A formula prescribing the correct processing for the earnings or payment, together with the formula processing and result rules.
The following sections discuss the particular input values and rules that you can generate, and the circumstances under which they are used. These input values and rules control the following:
Overrides to the tax jurisdiction of an earnings type
Tax withholding rules
Payment of an earnings type or non-payroll payment by a separate payment, issued in addition to the usual pay cheque or direct deposit payment
The calculation rule used to determine the amount of an earnings or non-payroll payment.
Net-to-gross processing of an earnings type of a fixed net amount.
Initiating Earnings and Non-Payroll Payments
You must sometimes pay employees earnings for work performed in a tax jurisdiction other than their primary work location, or for work performed in prior periods. To permit you to correctly process such earnings, the structure of all the elements Oracle Payroll generates for earnings in the classification Earnings includes the Jurisdiction input value.
The input value Jurisdiction takes entries of locations different from employees' primary work location. The payroll run then finds the jurisdiction code (tax code) of this location in the system's table of jurisdiction codes, so it can process the earnings for this work using the correct tax information.
In Canada, the jurisdiction code is the Canada Post province abbreviation.
| Input Value Name | Purpose of Entry |
|---|---|
| Jurisdiction | Provides the location for work done somewhere other than the primary work location. Entry of a location here prompts system to find the location's tax code in the table of jurisdiction codes, and use it to override the code of the employee's regular work location when calculating taxes. |
Oracle Payroll includes three types of payroll runs, Regular, Non-periodic, and Lump Sum. A payroll normally has just one Regular run each period, to produce the employees' regular earnings. However, there can be multiple Non-periodic and Lump Sum runs each period to process supplemental earnings and final pay for terminating employees as needed.
The method of tax withholding for each earning is defined on the Earnings form. The default tax withholding method for earnings with a classification of Earnings is Regular (tax calculation on periodic payments). You cannot modify the tax processing type for this classification.
The default tax withholding method for Supplemental earnings is Non-periodic. You can modify the tax processing type for supplemental earnings to Lump Sum or Regular as required.
You sometimes pay certain earnings or non-payroll payments by issuing separate payments to employees in addition to their regular pay cheques or direct deposit payments.
You might pay a special bonus or award, or a reimbursement for moving expenses, using a separate payment.
For control of separate payments, the elements generated for all earnings in the Earnings and Supplemental Earnings classifications, and for all payments in the classification Non-payroll Payments, include the Separate Payment input value.
For Canadian users: Set this value through the Earnings window.
For Mexican users: Set this value through the Element Design Wizard.
This input value has a default entry of No.
You can change this input value entry back and forth between No and Yes for an earnings type or payment, using the Element Link window. For an individual employee, you can make an entry of No or Yes for this input value using the Element Entries window, to stop or enable a payment by separate payment.
| Input Value Name | Purpose of Entry |
|---|---|
| Separate Payment | Yes indicates that this earning should be paid by separate payment. Default is No. |
| Process Separately | Yes indicates that you would like Oracle Payroll to process this earning separately from the others (such as for taxation purposes). The default is No. |
On the Earnings window, you select a rule that determines how Oracle Payroll calculates the amount of the earnings or payment. The system then generates the appropriate element input values. The available calculation rules are:
Flat Amount
Hours * Rate * Factor
Percentage of Earnings
Premium
Oracle Payroll generates earnings or non-payroll payments with this rule that include an Amount input value for entry of an amount. No calculations are necessary to determine the amount of this earnings or payment.
| Input Value Name | Purpose of Entry |
|---|---|
| Amount | Gives the formula the earnings or payment amount. |
Oracle Payroll generates earnings with this rule that include the Hours , Rate Code, Rate, and Multiple input values. Hours holds the number of hours worked at a particular rate or rate code. An entry in the Rate Code input value signals that the rates for this earnings come from the Wage Rates table. An entry of a rate to the input value Rate overrides entry of a rate code. With the multiple input value you enter a multiple for the calculation. For example, for a pay increase of 5% above the standard, you enter .05 in this input value.
| Input Value Name | Purpose of Entry |
|---|---|
| Hours | Gives formula the hours worked at each rate. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. If you leave this field empty, Oracle Payroll derives the rate based on:
|
| Multiple | Gives formula the multiplier to use for the calculation. |
Oracle Payroll generates elements for earnings with this rule with the input value Percentage, for entry of the percentage to use in the calculation.
| Input Value Name | Purpose of Entry |
|---|---|
| Percentage | Gives formula the percentage to use. |
For a salaried employee, the formula for this rule locates the employee's regular monthly earnings as an entry in the Monthly Salary input value (Periodic Salary in Canada) of the earnings Regular Salary.
For a waged employee, it calculates the regular earnings in a pay period by finding the employee's wage rate and multiplying it by the hours normally worked in a pay period. It locates the employee's usual hours worked by referencing the work schedule or, if there is none, the standard working hours for their assignment. It finds the wage rate by referencing, in this order:
The employee's salary basis
The rate code entered for the employee for the earnings Regular Wages
The rate entered for the employee for Regular Wages.
See: HR Organizations: Entering a Work Schedule, Oracle HRMS Enterprise and Workforce Management Guide and Business Groups and HR Organizations: Work Day Defaults, Oracle HRMS Enterprise and Workforce Management Guide
The Premium calculation rule calculates overtime premium and uses the blended rate for non-exempt employees. Oracle Payroll generates elements for overtime earnings with this rule with the input values of FLSA Allocated Earnings and FLSA Allocated Hours to use in the calculation.
| Input Value Name | Purpose of Entry |
|---|---|
| FLSA Allocated Earnings | Gives formula the FLSA allocated earnings |
| FLSA Allocated Hours | Give the formula the FLSA allocated hours |
The formula uses the allocated balances to determine the blended rate. The Premium calculation rule determines if the calculation uses the standard rate or the blended rate. The formula applies a factor of .5 to calculate the pay value amount.
Oracle Payroll supports Net to Gross processing of earnings elements. For example, you can define a bonus payment that is a fixed net amount. Oracle Payroll calculates the gross amount needed to meet the net pay. You define which taxes and other deductions the employer is willing to pay by selecting the balances that can be used in the net-to-gross processing.
When you define an earnings type for net-to-gross processing, the application generates the element, formula, balances, and processing rules that you require. You can configure these, if required.
The following three formulas are used in net-to-gross processing:
US_ITER_GROSSUP (for US) or CA_ITER_GROSSUP (for Canada)
This is the iterative formula that calculates the amount that the employer must pay in addition to the desired net amount.
<element_name>_GROSSUP_FLAT_AMOUNT
This formula adds the additional amount returned by the iterative formula to the desired net amount to return the element's gross pay value.
FIT_GROSSUP_ADJUSTMENT_CALC (for US) or FED_GROSSUP_ADJUSTMENT_CALC (for Canada)
This formula runs after normal processing to adjust the Federal Income Tax balance so that actual net pay is exactly equal to the desired net minus any balances that were excluded from the calculation.
Net-to-gross elements are always processed separately, after the main payroll run has processed.
When you initiate a net-to-gross earnings type, Oracle Payroll creates the element input values shown in the following table.
| Input Value Name | Purpose of Entry |
|---|---|
| Pay Value | Oracle Payroll returns the gross pay to this input value when it has completed the net-to-gross calculations |
| Amount | Gives iterative formula the desired net pay |
| Low Gross | Used by the iterative formula to hold the lower gross pay guess, to feed into the next iteration of the formula |
| High Gross | Used by the iterative formula to hold the higher gross pay guess, to feed into the next iteration of the formula |
| Remainder | The amount by which the additional pay to be paid by the employer (gross minus desired net) differs from the total of the balances that are eligible for grossup processing. Returned by the iterative formula. |
| To Within | The amount by which actual net can differ from desired net after normal processing. (Another formula runs at the end of normal processing to adjust the FIT balance to ensure that actual net equals desired net.) |
| Method | The method of iterative calculation: binary or interpolation. The default is interpolation. This determines which function the iterative formula calls. |
| Additional Amount | The amount to add to desired net to calculate gross pay. Returned by the iterative formula. |
| EI Hours (Canada only) | To enter the hours associated with the payment so they will be reflected in the Record of Employment. For reporting purposes only. The application creates this input value if you check the EI Hours box on the Earnings window. |
The formulas for net-to-gross processing do the following:
The iterative formula takes as input the desired net amount (Amount input value), the amount by which net can diverge from the desired amount (To Within input value), and the method of calculation (Method input value).
In the first run it sets the lower gross limit to the desired net amount, and the higher gross limit to twice the desired amount. Then it runs a function to provide the first guess of the gross. The formula returns three values-low gross, high gross, and additional amount-to the element's input values.
The element's payroll formula runs (<element_name>_ GROSSUP_FLAT_AMOUNT). It adds the additional amount to the desired amount to create the gross and returns this value to the element's pay value for the payroll run to process. It also sends the desired amount as an indirect result to another element (FIT_GROSSUP_ADJUSTMENT in the US, FED_GROSSUP_ADJUSTMENT in Canada).
In the next iteration, the iterative formula compares the additional amount to the total value of the balances that are available for grossup for this element entry. The additional amount must not differ from this balance total by more than the amount specified in To Within.
If the additional amount equals the balance total, the iterative processing ends.
If the additional amount is above or below the balance total by an acceptable margin, the processing ends and the formula returns the remainder (additional amount - balance) to the element's Remainder input value.
Otherwise, the formula runs the function to get a better guess for gross, using the remainder to determine by how much to change the guess. The formula checks the results in another iteration.
After all iterative processing, the formula for FIT_GROSSUP_ADJUSTMENT (US) or FED_GROSSUP_ADJUSTMENT (Canada) deducts the desired net amount from actual net calculated in this run plus balances that were excluded. The difference is the amount by which Federal Income Tax must be adjusted to pay the required net amount.
The FIT_GROSSUP_ADJUSTMENT element in the US and the FED_GROSSUP_ADJUSTMENT element in Canada feeds the FIT Withheld Balance with the small sum required to adjust calculated net to be the same as desired net. To ensure there are no small discrepancies in your costing information, link and cost the adjustment element in the same way as your FIT element.
When you initiate an earnings type, Oracle HRMS generates a formula, and this formula determines how the payroll run handles a negative earnings entry. By default, the formula processes negative earnings provided that net pay is a positive value. If net pay becomes negative, the formula generates an error for the assignment.
The formula includes two other processing options, which are inactive through the use of comments in the code and, therefore, by default do not affect the formula's processing. You can activate one of these processing options by querying the formula in the Formula window, removing the comments from the section of code you want to use, then verifying and saving the formula. The formula text gives more information about how to do this.
The other processing options are as follows:
The formula processes negative earnings provided that net pay is a positive value. If net pay becomes negative, the formula ignores the earnings that are negative.
The formula does not process negative earnings unless there is a positive offsetting entry of the same element. The formula holds the entry in an arrears balance until it processes a positive entry of the same element. This is equivalent to arrearage processing for deductions.
To initiate an earnings type or non-payroll payment, use the Earnings window.
If you need to add a category for the earnings or payment type you are initiating, use the application utilities Lookups window to enter additional categories for these Lookup types:
CA_REGULAR_EARNINGS
CA_SUPPLEMENTAL_EARNINGS
CA_TAXABLE_BENEFITS
CA_PAYMENT.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
To set up an earnings type or non-payroll payment
If necessary, enter rules to control payments by separate cheque
If necessary, modify the generated components
Define element links for the generated element(s).
Do not select frequency rules for an earning. Frequency rules should only be selected for voluntary deductions.
If you make mistaken entries when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings or payment.
To identify, classify and categorize the earnings or payment
Set the effective date early enough to handle any historical entries. You cannot enter an earnings or payment for employees before its effective start date.
Enter a unique name for the earnings or payment. The system uses this name for both the generated element and formula. The name must start with a letter of the alphabet, not a number or symbol.
Optionally enter a reporting name, which is a short name that appears on reports and the statement of earnings.
Select the correct classification and category. The classification and category of an earnings or payment help to determine the tax rules and other rules and procedures that apply to it.
Important: To control the frequency of a taxable benefit, you can create or edit a skip rule formula for the element.
If pay rates for this earnings type should be used in determining overtime earnings, check the Overtime Earnings box.
This creates a balance feed to the Overtime Earnings balance.
If this earnings type represents pay for hours worked that should be used in determining overtime, check the Overtime Hours box.
This creates a balance feed to the Overtime Hours balance.
If this earnings type represents pay for hours worked that should be included for EI purposes, check the EI Hours box.
This creates a balance feed to the EI Hours balance.
Entering Processing Rules for the Earnings or Payment
Managing Separate Cheque Payments
To enter processing rules
Select Recurring or Nonrecurring as the processing type.
Select Recurring if entries to the input values of this earnings type or payment, once entered for an employee, should process each period until you change them or they reach their end date. Select Nonrecurring if this earnings type or payment should process only when it receives new entries in a period.
Important: To control the frequency of a taxable benefit, you can create or edit a skip rule formula for the element.
Select a termination rule to control the processing of entries to the element after employee termination:
Optionally, change the default priority. The classification of the earning or payment determines its default processing priority in the payroll run.
If the termination rule is Actual Termination and the element's processing type is recurring, entries to the element close down on the employee's actual termination date. If the element's processing type is nonrecurring, entries close down on the last date of the pay period in which the employee leaves, or on the date the assignment ends (the final process date) if this is earlier.
If the termination rule is Final Close, entries to the element stay open beyond the actual termination date. This makes it possible to pay bonuses, severance pay, and so on, and to make year end adjustments after the employee's actual termination date.
Note: Recurring elements with the Final Close rule only process in runs after the Last Standard Process Date if there is also a nonrecurring entry to process in that run.
If the termination rule is Last Standard Process, entries to the element are not processed after the Last Standard Process date. The Last Standard Process date defaults to the last day of the pay period in which the employee is terminated, but you can set it to a later period when you terminate an employee. This is the appropriate rule for many recurring earnings types.
Check the Standard Link box only if Oracle Payroll should automatically enter the earnings or payment, with its default input value entries, for all eligible employees.
Select the appropriate calculation rule. The formula names appearing in the list of values depend on the processing type of the earnings or payment. The basic calculation rules listed are:
Flat Amount, if you enter the earnings or payment amount and no calculation is necessary
Hours * Rate, if the amount is calculated by multiplying hours worked by a wage rate
Hours * Rate * Factor * Table, if the amount is calculated by multiplying hours worked by a wage rate, a multiplier factor, and user-defined table multiplier
Percentage of Regular Earnings, if the amount is calculated by multiplying the regular salary or the wages by a percentage
Select the Tax Processing Type. The Type must be Regular for earnings with a classification of Earnings. The default is Non-periodic for earnings with a classification of Supplemental. You cannot select a Type for Non Payroll Payments.
Select the Year End Form on which this earnings will print. Your selection will determine which values you can select in the Federal footnote and Provincial footnote fields. Select the footnote that applies to this earnings.
Managing Separate Cheque Payments
To set up payment by a physically separate cheque
Choose Yes in the Separate Payment region. The default is No.
Save your work.
If you want employees' statements of earnings to show hours actually worked and any regular non-worked hours (such as time on jury duty or paid holidays), you create a regular non-worked hours earnings type.
Regular wages or salary are reduced for employees who have entries for regular non-worked hours. The sum of the worked hours and regular non-worked hours is equal to the regular hours.
To create regular non-worked hours, first create an earnings category for reducing regular wages, using the application utilities Lookups window. Then set up an earnings type using the Earnings window.
Important: The earnings category "Regular" cannot be used with this functionality. You must use a special earnings category.
To create an earnings category to reduce regular wages:
In the application utilities Lookups window, query CA_REGULAR_EARNINGS or CA_SUPPLEMENTAL_EARNINGS in the Type field.
Enter a unique code for the earnings category in the Code field.
Enter a name for the earnings category, such as "Regular Non-Worked" in the Meanings field.
This name will display in the list of values for the earnings category.
Select an appropriate access level.
Save the earnings category.
To create a regular non-worked hours earnings type:
Set your effective date early enough to handle any historical entries you may want to make.
Identify the earnings.
The earnings classification must be either Earnings or Supplemental Earnings. The earnings classification cannot be Taxable Benefits or Non-Payroll Payments.
Enter calculation rules for the earnings type.
You must select either Hours_X_Rate or Hours_X_Rate_Multiple. You cannot select a flat amount or a percentage of regular earnings.
Check the Reduce Regular check box.
If necessary, enter rules to control payments by separate cheque.
Save your work.
Review and if necessary, make changes to the components generated for the earnings.
See: Reviewing Earnings and Deductions Structures
Important: If you make mistakes when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings.
To disable a regular non-worked hours earnings type, use the Further Element field in the Element window.
To disable a regular non-worked hours earnings type
Query the earnings type you want to disable.
Click in the Further Information field.
Change the value of the Reduce Regular field from Yes to No.
Save your work.
For some earnings types, the payroll run calculates the gross amount based on a fixed net amount to be paid to the employee. For example, you might want to ensure a certain take-home bonus amount, and be willing to pay some or all of the taxes and other deductions that apply to the bonus.
To create a net to gross earnings type, use the Earnings window.
To create a net to gross earnings type
Set your effective date early enough to handle any historical entries you may want to make.
Identify the earnings.
The earnings classification must be Supplemental Earnings.
Check the Grossup check box.
Select the calculation rule GROSSUP_FLAT_AMOUNT_NONRECUR (US) or Flat Amount for Net to Gross (Canada). This generates a formula called <earnings name>_GROSSUP_FLAT_AMOUNT, which you can configure if necessary.
Select Yes in the Separate Check region (US) or Separate Payment region (Canada) if you want the earning to be paid separately.
Choose the Grossup Processing tab.
Review the list of balances that are eligible for grossup and clear the Include check box for any balances that you want to exclude from the grossup processing.
Note: You can exclude additional balances for individual element entries using the Gross Up Balances window (which opens from the Element Entries window).
Canada only: Indicate if this element is recurring.
Save your work.
Review the components generated for the earnings.
See: Reviewing Earnings and Deductions Structures
If necessary, make changes to the generated components. You cannot change these components using the Earnings window.
See: Customizing Generated Elements, Formulas, and Balances, Oracle HRMS Compensation and Benefits Management Guide
Important: If you make mistakes when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings.
You initiate the non-tax (pretax, benefit, voluntary) deductions you need by entering information about them in the Deduction window.
In response to your entries in this window, Oracle Payroll generates an element for the deduction, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
When you initiate the deduction, you determine the rules that control its processing, including the following:
Start and stop rules
You select the rules that determine when the deduction starts or stops for an employee. For example, a deduction might start when a balance of earnings for the employee reaches a specified amount. It might end when a balance of the amount taken for the deduction reaches a specified amount.
Amount rules
You select the method of entering or calculating the amount of the deduction. For example: The amount can be entered for each employee, it can be calculated by a formula as a percentage of earnings, or it can be selected by the formula from a Payroll table.
Frequency rules
These rules determine the pay periods in which the deduction is withheld. For example, a monthly deduction might be processed in the third period of the month for weekly-paid employees and in the second period of the month for employees paid on a semi-monthly basis.
Insufficient Funds rules
You can determine whether to hold an arrears balance for a deduction, and whether to take a partial deduction if earnings are insufficient to take the full deduction amount.
There are additional rules you can define for wage attachments.
See: Input Values for Wage Attachments
If you need to delete elements you created with the Deduction template or Element Design Wizard, do not use the Element window. Query the element from within the template or wizard and delete it from there.
See: Deleting an Element
Oracle Payroll enables you to control starting and stopping deductions in several ways:
Start Rule or Stop Rule: On Entry
When the start rule is On Entry, the deduction begins on the effective date you enter the deduction for an employee.
When the stop rule is On Entry, the deduction ends on the effective date the entry is deleted.
Start Rule: Earnings Threshold
The deduction starts when the Gross Earnings balance for the employee reaches a specified amount.
The formula for deductions with this rule checks whether the payroll run has caused the employee's year-to-date value of the Gross Earnings balance to reach or surpass the threshold amount.
The deduction stops for an employee when a balance of the amount taken for the deduction reaches a specified amount.
US and Canadian users: You specify the start and stop rules through the Deductions window.
Mexican users: You specify the start and stop rules through the Element Design Wizard.
Note: You can modify the generated formula to reference a different balance.
The elements Oracle Payroll generates for initiated deductions include entry values needed for particular start and stop rules. Specify a default value for all eligible employees in the Default field of the Entry Values sub window of the Element Link window. Specify a value for an individual employee in the Entry Values sub window of the Element Entries window. The entry values are:
| Start or Stop Rule | Entry Value Name | Purpose of Entry |
|---|---|---|
| On Entry start and stop rule | On Entry | N/A |
| Earnings Threshold start rule | Threshold Amount | Gives formula the balance value that triggers deduction's start (Formula references Gross Earnings balance).
Note: This rule does not apply to Mexico. |
| Total Reached stop rule | Total Owed | Gives formula the total amount that triggers deduction's stop. |
When you use a Total Reached stop rule, the accrued balance is automatically set to zero when the amount deducted reaches the total owed. However, if you end the element entry before this happens, the balance is not cleared. If you enter the same element for the employee in the future, this deduction will end before the total owed has been deducted because the formula uses a balance that does not start from zero.
To prevent this problem, perform the following steps if you have to end an element entry with this stop rule before the total owed has been deducted:
Create a formula to check the value of <element_name>_ACCRUED_ASG_ITD, multiply its value by -1, and feed the result back to the accrued balance.
Create a nonrecurring element, and associate the formula with this element in the Formula Result Rules window.
Enter this element for the employee
During Deduction element definition, you can select a rule that determines how Oracle Payroll calculates the amount of the deduction. The system then generates the appropriate element input values. The available calculation rules are:
Flat Amount, if you enter an amount for each employee using BEE or the Element Entry window.
% Earnings, if you enter a percentage for each employee using BEE or the Element Entry window. The deduction formula calculates the amount from this percentage.
Note: All generated deductions include the Additional Amount and Replacement Amount input values for efficient management of one-time changes to the deduction amount. Use the pay value override to use these input values.
See: Changes to Earnings or Deductions Before a Run, Oracle HRMS Payroll Processing Management Guide.
Canadian users: Specify calculation rules through the Deductions window.
Mexican users: Specify calculation rules through the Element Design Wizard.
Elements generated for deductions with this rule include an input value Amount, for entry of the deduction amount. No calculations are necessary to determine the amount.
| Input Value Name | Purpose of Entry |
|---|---|
| Amount | Gives formula the deduction amount. |
Elements generated for deductions with this rule include a Percentage input value. The formula multiplies an employee's Regular Pay balance by the percentage figure entered in the input value.
You can modify the formula to reference a different earnings balance.
| Input Value Name | Purpose of Entry |
|---|---|
| Percentage | Gives formula the percentage to use. (Formula references the run balance of Regular Pay. |
Oracle Payroll can hold an arrears balance for a deduction. It creates the input value Clear Arrears, which you use to specify whether the payroll run should attempt to clear the arrears. It also creates two special input values for the deduction. These input values are special in that they function without you ever seeing them or making entries to them. They receive their entries automatically during the payroll run.
US and Canadian users: Enable arrears balances through the Deductions window.
Mexican users: Enable arrears balances through the Element Design Wizard.
The special input value Not Taken holds any amount not taken for the deduction in the most recent payroll run. The special input value Arrears Contr (Arrears Contribution) feeds the arrears balance.
To review an employee's arrears balance for a deduction, use the View Earnings and Deductions Balances window.
| Input Value Name | Purpose of Entry |
|---|---|
| Clear Arrears | Select Y if you want the payroll run to attempt to clear the amount held in arrears. Select N if you do not want the payroll run to attempt to clear the arrears. |
| Not Taken | Receives any amount not taken in the most recent payroll run. |
| Arrears Contr (Arrears Contribution) | Receives results of the calculation of Scheduled Amount minus Pay Value for most recent run. Feeds this result to the arrears balance. |
Note: The system also makes use of the Adjust Arrears special input value in managing arrearage.
For more information about this input value, see: Changes to Earnings or Deductions Before a Run, Oracle HRMS Payroll Processing Management Guide.
The table below presents an example of how the entries automatically made to the these input values work to maintain the arrears balance.
Scheduled deduction amount per run: $50
Pay Value = Amount actually deducted in each run
Clear Arrears = Y
| Run | Pay Value | Not Taken | Arrears Contr (Arrears Contribution) | Arrears Balance |
|---|---|---|---|---|
| 1 | 50 | 0 | 0 | 0 |
| 2 | 30 | 20 | 20 | 20 |
| 3 | 10 | 40 | 40 | 60 |
| 4 | 110 | 0 | -60 | 0 |
| 5 | 50 | 0 | 0 | 0 |
Oracle Payroll automatically creates a number of balances for the deductions you create. The rules you select for the deductions determine which balances Oracle Payroll creates. You can review the definition of these balances in the Balance window.
You can see the value of these deductions for an employee using the View Earnings and Deductions Balances window.
See: Reviewing Earnings and Deductions Balances
Note: To view tax balances for individuals, use the View Tax Balances window.
See: Viewing Tax Balances, Oracle HRMS Payroll Processing Management Guide
The balances that Oracle Payroll creates include the following:
This balance exists only for deductions with a stop rule of Total Reached. It holds the amount accumulated to date toward the total.
See: Deduction Start and Stop Rules
This balance exists only for deductions for which the system holds arrearage when employee earnings are insufficient to cover the deduction's full amount. The arrears balance holds any amounts not taken but held in arrears.
Use the Deduction window to initiate a non-tax deduction in accordance with the rules and policies of your enterprise.
In response to your entries in this window, Oracle Payroll generates an element for the deduction, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
To set up a deduction
If you want to add your own user-defined category for a deduction, use the application utilities Lookups window to enter additional categories for these Lookup types:
CA_INVOLUNTARY_DEDUCTIONS
CA_VOLUNTARY_DEDUCTIONS
CA_PRE_TAX_DEDUCTIONS
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
If necessary, define frequency rules.
Note: Do not define frequency rules for involuntary deductions.
If necessary, modify the generated components.
Define element links for the generated element(s).
Note: If you make a mistake while setting up your deduction, causing the generated components to be incorrect, you must delete all the generated components and recreate the deduction.
Make Batch Element Entries Using BEE, Oracle HRMS Configuring, Reporting, and System Administration Guide
You need to identify, classify, and categorize a deduction before you can use it. Use the Deduction window.
To identify, classify, and categorize the deduction
Set the effective date early enough to handle any historical entries. You cannot enter a deduction for employees before its effective start date.
Enter a unique name for the deduction. This name applies both to the deduction element and its formula. It must start with a letter of the alphabet, not a number or symbol. You can also supply a reporting name, a short name that appears on reports and the statement of earnings.
Select the correct classification for the deduction, and a category if applicable.
Pretax deductions and deductions taken for wage attachments require selection of a category.
Selecting Processing Rules for the Deduction
Processing rules enable you to tailor the deduction to meet your business needs.
To enter processing rules for the deduction
Choose the Processing tabbed region of the Deduction window.
Select Recurring or Nonrecurring as the processing type.
Select Recurring if entries to this deduction should process until you change or end them. Select Nonrecurring if the deduction should process only when it receives one or more new entries in a period.
Optionally, change the default priority. The deduction's classification determines its default processing priority in the payroll run. Deductions with lower processing priorities process first.
Check the Standard Link box only if you want automatic entry of the deduction and its default entry values for all eligible employees.
Select a run type of Regular or All.
Select Regular for the deduction to process only in Regular runs, that is, the runs that produce employees' regular pay in each period. Select All to process the deduction in both Regular and Supplemental runs.
Select On Entry or Earnings Threshold as the rule determining when this deduction starts for an employee:
On Entry, if the deduction should start as of the effective date you enter it for an employee
Earnings Threshold, if this deduction should start when the employee's Gross Earnings balance reaches or surpasses a threshold amount. Enter this amount in the entry value Threshold Amount.
You can modify the deduction formula to reference a different earnings balance.
Specify a default value for all eligible employees in the Threshold Amount Default field of the Entry Values sub window of the Element Link window.
Specify a value for an individual employee in the Threshold Amount field of the Entry Values sub window of the Element Entries window.
Select On Entry or Total Reached as the rule determining when this deduction stops for an employee:
On Entry, if the deduction should stop on the effective date you delete it for an employee
Total Reached, if the deduction should stop when the sum of amounts taken from an employee reaches a specified total. You enter this total in the entry value Total Owed.
Specify a default value for all eligible employees in the Total Owed Default field of the Entry Values sub window of the Element Link window.
Specify a value for an individual employee in the Total Owed field of the Entry Values sub window of the Element Entries window.
Determining the Deduction Amount
Select the rules that determine the amount of a deduction in the Amount Details tabbed region of the Deduction window.
To determine the deduction amount
Choose the Amount Details tabbed region.
Select Flat Amount, or % Earnings as the calculation rule.
Entering Year End Information for Deductions
Arrearage rules enable you to manage insufficient funds. Use the Amount Details tabbed region of the Deduction window.
To manage insufficient funds
Select an Insufficient Funds Type:
No Arrearage and No Partial Deduction
Arrearage and No Partial Deduction
No Arrearage and Partial Deduction
Arrearage and Partial Deduction
Error on Arrearage
If your selected type includes Arrearage, the system will hold an arrears balance for the deduction. The arrears balance takes the deduction's name.
If your selected type includes Partial Deduction, the system takes a partial amount when earnings are insufficient to take the full deduction amount.
Note: If you select 'No Arrearage and Partial Deduction', the system takes a partial amount when earnings are insufficient but does not hold the amount not taken in an arrears balance.
Save your work.
Reviewing Earnings and Deductions Structures
Use the Year End Info tabbed region of the Deduction window to select the information to print on year end forms.
To specify the year end deduction information
Choose the Year End Info tabbed region.
Select the Federal footnote that applies to this deduction.
Select the Provincial footnote (RL1) that applies to this deduction.
If the deduction has a registration number associated with it that should appear on year end forms (for example, Registered Pension Plans), enter the registration number.
For Slip T4, this number comes from the element that feeds the Pension Adjustment balance (Box 52). If there is no reported Pension Adjustment, then the registration number comes from the element that feeds the RPP contributions (Box 20). If the employee belongs to multiple pension plans, the registration number associated with the highest pension adjustment balance is the one that prints on the slip.
For Slip T4A, this number appears in Pension plan registration number (Box 36). This number is taken from the element that feeds the Pension Adjustment balance (Box 34). If there is no Pension Adjustment reported, then the registration number comes from the element that feeds the Registered pension plan contributions (past services) balance (Box 32). If the employee belongs to multiple pension plans, the registration number associated with the highest pension adjustment balance is the one that prints on the slip.
Save your work.
Managing Insufficient Funds (Arrearage)
Oracle Payroll provides a robust answer to administering wage attachments, a type of involuntary deduction. Like other features in Oracle HRMS, wage attachments are rule-driven so that you can tailor the software to fit your business requirements.
Wage attachments in Oracle Payroll consist of the following administrative functions:
Creating an external organization to identify the court receiving payment for the wage attachment
Creating a Third Party Cheque payment method then adding the payment method to the payroll and to the employee assignment
Determining which earnings are eligible for wage attachments
Creating a wage attachment deduction and assigning it to the employee
Adding details of the wage attachment
Oracle Payroll allows you to process details of deductions from employee wages in settlement of court debts, arrears of statutory payments, family support and so on. Regardless of legislative variance, Oracle Payroll provides the elements, balances, and formulas that you need for processing wage attachments.
Third party payments is also known as Wage Attachments, Wage Garnishments, and Court Orders in different localizations, and your legislation may already have predefined elements to support each of these types of deduction.
Third party payments are deductions from earnings incurred by court debts or fines. For example, payments of maintenance, child support or other legally incurred obligations. Oracle Payroll enables you to process these deductions from worker wages. Third party payments in Oracle payroll are rule-driven, so you can tailor them to meet your business needs.
Oracle Payroll provides a robust answer to administering third party payments, a type of involuntary deduction. Like other features in Oracle HRMS, third party payments are rule-driven so that you can tailor the software to fit your business requirements.
Oracle Payroll features for third party payments enable you to:
Create third party payments
Determine which earnings are eligible for third party payments
Administer fees for recouping processing costs of third party payments (if administrative fees are payable for your legislation)
Establish the priority of payments if a worker has several third party payment obligations that cannot be met in a single pay period
Stop making third party payments when your worker has discharged the obligation
Oracle Payroll handles third party payments using:
Elements and input values
Formulas
Balances and balance feeds
Depending on the country in which you operate, third party payments are either provided for you, along with their associated elements, balances, balance feeds and formulas, or you can create your own. To create your own, enter some of the information you require into a template, and let Oracle Payroll generate the elements, balances and balance feeds for you. You create North American third party payments using this second method.
You can only use one of the two methods, depending on your legislation, and not a mixture of both.
Each third party payment is represented by one element. For example, the third party payment of Court Order is represented by the element called Court Order.
Once you have created a third party payment, or selected one of the third party payments provided, you record all changes by entering input values for the third party payment element.
You determine when to deduct each third party payment from a worker's earnings using element classifications and processing sequences.
For example, you may need to ensure that Oracle Payroll always processes court orders before other deduction types. You may also need to prioritize the court orders further to ensure that Oracle Payroll always processes child support deductions before education loans. In this example, these third party payments belong to an element classification with a low-numbered processing sequence. This ensures that they are processed before all other deductions.
Then, to ensure that Oracle Payroll always processes your child support payments before education loans, you could determine a secondary processing sequence. You do this in the Element Entries window.
If you don't specify a secondary processing sequence, third party payments are processed in date order.
During payroll processing, the appropriate formula calculates the deduction from the worker's wages, and considers the correct percentage of the balance which stores the worker's net income.
Korea users only: While processing your third party payment, use only the KR Monthly Payroll, KR Bonus Payroll, and KR Separation Pay Payroll processes. If you use QuickPay Run, the third party payment will not be properly processed because you cannot specify its payout date.
You can use the predefined formulas to determine how third party payments are processed in your organization. For example you can do the following:
Determine the amount of pay that is liable for third party payment deduction. For example, the worker's take home pay after tax and other deductions, and the amount that is protected or exempt from third party payment deductions. During payroll processing, a formula calculates the deduction from the worker's wages. During calculation, 50 percent of the Attachable Earnings balance is considered; this balance stores the worker's net income. Irrespective of the payroll run type, only 50 percent of Attachable Earnings will be considered.
Calculate the amount to withhold. The third party payment court order provides the amount to be withheld per pay period and a total amount due. If you do not enter a pay period, Oracle Payroll defaults to the maximum amount allowed by law. The amount withheld can also include any arrears owing or any fees payable to the employer for setup and administration of the deduction.
Verify the amounts withheld. After Oracle Payroll has calculated all third party payments for a worker, the relevant formula checks that all rules and limits applicable to these payments are accounted for. If it finds any violations, the formula makes adjustments to the previously calculated amounts, prorating them and creating arrears amounts if necessary.
See: Formulas and Payroll Run Results
Oracle Payroll uses balances to record the amount of third party payments paid or amount remaining. Depending on your legislation, Oracle Payroll either provides the balances and balance feeds that you need for predefined third party payment elements, or it generates them automatically.
The amount of court order debt paid at any time is held in an Inception-to-date (ITD) balance. For those elements that have multiple occurrences, this balance exists at element level, reflecting the need to keep track of how much has been paid for each separate occurrence. Otherwise the balance exists at assignment level.
The amount of the debt still outstanding is the difference between the amount in the ITD balance dimension and the Initial Debt input value.
For Assignment level ITD balance dimensions, you must ensure that, once the total debt has been repaid and the element has been given an end date for processing, that the balance is cleared back to 0.00. If you do not do this and a new element entry is given to the worker for the same court order type element, the formula finds the 'old' balance and the element is not processed correctly.
The attachable pay balances Run and Period balance are referenced within the formulas because of the possibility of there being more than one run in a period.
You enter the initial debt. The system then manages the deductions automatically and ends the process when the debt is cleared. If you do not enter a value for the debt the system continues to process the deductions each pay period as ongoing maintenance payments.
Local legislation determines the amount and type of earnings from which third party payments can be deducted. Typically, there is a minimum amount of earnings below which you cannot deduct third party payments. Similarly, there is a proportion of a worker's earnings that are considered liable to third party payment deductions.
You can use Oracle Payroll to manage both kinds of third party payment:
Where the total amount of the deduction is known in advance, for example, a fine.
Where the total amount is not fixed, but you must make a deduction from each salary payment, for example, child maintenance orders.
Depending on the third party payment, and whether the deduction is ongoing or a diminishing balance, you can set a deduction end date. Alternatively you can set up the deduction so that Oracle Payroll stops processing it when the full balance has been paid.
You can also override these settings, for example, if you want to stop maintenance payments immediately before reaching the end date.
If a worker's third party payment is still being processed after the worker has left the organization, then you must manually enter deposition-related information into the Deposition Info predefined element. This element is for informational purposes only. Your company will request the court that has mandated the third party payment to stop the process, and the court will be sent the information contained in the element.
All generated deductions include the input values Additional Amount and Replacement Amount, for efficient management of one-time changes to the deduction amount.
Note: Oracle Payroll automatically stops issuing wage attachments from wages when the total owed is reached, regardless of whether a court-issued notice is received.
When you initiate wage attachments, the system generates elements with associated input values. You can use these input values to keep accurate records of the employees wage attachment. The following table lists the input value names and describes the purpose they serve.
| Input Value Name | Purpose of Entry |
|---|---|
| Pay Value Calculation result | This should not be entered |
| Attachment Number | Issued court order or case number |
| Attachment Detail | List particulars of the wage attachment |
| Attachment Priority | The priority in which the attachments should be processed in the event of multiple attachments. For example, federal tax levies would be given the highest priority (priority 1), family support orders would be the next highest priority (priority 2) and garnishments would be given the lowest priority (priority 3). |
| Attachable Earnings Rule | The basis upon which the wage attachment should be calculated (i.e., gross or net pay) |
| Prorate on Insufficient Funds | The method used to calculate the deductions when processing multiple orders of the same priority and the net pay is insuffcient to process all orders. |
| Date Served | Holds the attachment's date of issue. This can help to set priorities if multiple wage attachments exist and is also used when determining a time frame to process the order i.e. deduction termination rule. |
| Deduction Type | The category of wage attachment |
| Deduction Basis | The method to calculate the wage attachment |
| Deduction Percentage | The percentage to deduct if the Deduction Basis is "Percent of Attachable Earnings" |
| Deduction Amount per Run | The amount to be deducted if the Deduction Basis is "Flat Amount" |
| Deduction Cap Period | The maximum amount to be deducted per period |
| Deduction Cap Month | The maximum amount to be deducted per month |
| Deduction Termination Rule | The criteria for the automatic termination of the wage attachment |
| Deduction Total Owed | The total amount owed if the Deduction Termination Rule is "Stop when total owed reached" |
| Duration | The number of weeks or months from the Date Served that the deduction should terminate |
| Fee First Deduction Amount | The fee amount to be taken only with the first deduction of the wage attachment |
| Fee Basis | The method by which the fee should be calculated |
| Fee Percentage | The percentage if the Fee Basis is "Percentage" |
| Fee Amount per Run | The amount to be deducted each pay run if the Fee Basis is "Flat Amount" |
| Fee Cap Period | The maximum amount to be deducted for fees per period |
| Fee Cap Month | The maximum amount to be deducted for fees per month |
| Exemption Basis | The method by which the earnings that are exempt from the wage attachment should be calculated |
| Exemption Percentage | The percentage if the Exemption Basis is "Percentage" |
| Exemption Minimum Amount | The amount if the Exemption Basis specifies a minimum amount |
| Exemption Maximum Amount | The amount if the Exemption Basis specifies a maximum amount |
| Jurisdiction Overrides | Jurisdiction Overrides employee's work province as source of the legislation used to administer the attachment. |
| Payee Detail | The organization to which the payment is to be made for this wage attachment |
You can date effectively define and maintain which supplemental earnings, taxable benefits and pre tax deductions should be included as part of disposable income for support orders or other garnishments using Oracle Payroll Garnishment rules.
You can define two types of information at the federal level and for each province:
Support Disposable Income indicates that this earning type is eligible for court orders relating to family or child support or alimony.
Other Wage Attachment Disposable Income indicates this earnings type is eligible for attachment for garnishments and tax levies.
You can also indicate that certain earning types are not eligible for attachment.
Initiate a wage attachment by entering information about it in the Deduction window. The system generates the deduction element with the necessary input values and balance feeds. Attention: Do not enter frequency rules for a wage attachment.
To identify, classify and categorize the wage attachment
If you must add a category for the deduction you are initiating, use the application utilities Lookups window to enter additional categories for this Lookup value: CA_INVOLUNTARY_DEDUCTIONS
Set the effective date early enough to handle any historical entries. Attention: You cannot enter a deduction for employees before its effective start date.
Enter a unique name for the wage attachment.
This name applies both to the deduction element and its formula. It must start with a letter of the alphabet, not a number or symbol. You can also supply a reporting name, a short name that appears on reports and the statement of earnings.
Important: You cannot reuse the name of a wage attachment for an employee. Each wage attachment must have a unique name.
Select Involuntary Deduction classification.
Select a category.
Wage Attachments require selection of a category, such as: Canada Revenue Agency, Garnishment, Maintenance/Support, or Provincial Tax Levy.
To produce cheques for payment of Wage Attachments to individuals or organizations named in attachment orders, you make use of third party payment methods.
To set up payments of a Wage Attachment
. Enter the recipient of the payments, either an individual or an organization, into the database. The name and address of the recipient appears on the payment cheques.
. For an attachment payable to an individual, use the Contact window to enter the individual as a contact of the employee, with the relationship Payments Recipient.
. To enter the organization and the location, giving it the classification Payee Organization, use the Organization window.
. Define a third party payment method for use in your enterprise, using the Organizational Payment Method window. In the Valid Payment Methods window, select this method as a valid payment method for the payroll to which the employee with the Wage Attachments is assigned.
. Using the Personal Payment Method window, select the third party payment method as a personal payment method for the employee subject to the Wage Attachment. Enter on this personal payment method the type (individual or organization) and name of the payee.
. For the employee subject to the Wage Attachment, use the Element Entries window to make entries to the input values of the Wage Attachment. In the Payee Details field, select the name of the personal payment method set up to make the payments for this attachment.
. Entries to the deduction's input values provide essential information about the Wage Attachment, such as its unique identification number, its amount and the date it was served.
. After processing the Wage Attachment in a payroll run and running the Pre - Payments process for the run results, you are ready to produce a cheque for payment of the Wage Attachment.
To establish wage attachment on an employee's record
. Query the wage attachment and open the Entry Values window.
. Enter the appropriate values for the wage attachment entry values.
Note: Much of this information can be found on the court order for the wage attachment.
To produce a cheque for payment of a Wage Attachment, run the Cheque Writer process from the Submit Request window.
To produce a cheque for payment of a Wage Attachment
. In the Name field of the Submit Request window, select Cheque Writer. If the Parameters window does not open automatically, click in the Parameters field.
. For the Payroll parameter, select the payroll to which the employee subject to the Wage Attachment has an assignment. The default consolidation set of this payroll appears in the Consolidation Set field. You can select a different consolidation set.
. In the date fields, enter the date of the Pre-Payments process on whose results this Cheque Writer process depends. To produce a number of cheques for Wage Attachments for which Pre-Payments processes were run over a period of time, enter the start and end dates of this time period.
. For Payment Method, select the name of the third-party payment method to be used for making this payment. For Cheque Style, select Third-Party Cheque.
. The Sort Sequence defaults to Organization, Person. If other sequences are defined for your installation, you can select one of them.
. For Start Cheque Number, enter the number of the first cheque to produce in this cheque run.
. Choose OK, then Submit.
Note: Consult with your supplier of business forms to determine the formatting and numbering system to use on your cheques.
Wage attachment earnings rules allows you to date effectively define and maintain which supplemental earnings, taxable benefits and pre tax deductions should be included as part of disposable income for support orders or other garnishments.
To create a wage attachment earnings rule
. Set your effective date.
. Select Supplemental Earnings, Taxable Benefits or Pre Tax Deductions for the type.
. Select the appropriate level such as Federal or Provincial and elect the appropriate province or territory from the list of values, if needed.
. For each earnings or taxable benefit category you defined, select the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
Important: Attention: Attention: Oracle Payroll interprets the earnings or taxable benefit category as not subject to attachment if a category is left unchecked. The Pre Tax Deduction category does not reduce attachable wages if it is checked.
. Save your changes.
You can update your earnings rules to date effectively maintain which Supplemental and Imputed earnings should be included as part of disposable income for support orders or other garnishments. Use the Wage Attachment Earnings Rules window.
To update a wage attachment earnings rule
Set your effective date.
Query the wage attachment earnings rule you want to update.
Make changes to the rule as appropriate.
Save your changes.
You can date effectively end Supplemental Earnings, Taxable Benefit and Pre Tax Deduction rules.
To end a user - defined wage attachment earnings rule
. Set your effective date.
. Query the wage attachment earnings rule you want to end.
. For each category, uncheck the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
. Save your changes.