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Oracle Human Resources Management Systems Compensation and Benefits Management Guide (Australia)
Release 12.1
Part Number E13544-07
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Other Payroll Earnings and Deductions

Payroll Earnings and Deductions Overview

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.

Key Concepts

To get the most out of the earnings and deductions functionality of Oracle HRMS, you need to understand the following key concepts:

Payroll Earnings and Deductions

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.

Can Oracle Payroll handle complex calculations?

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.

How do you control when each earning or deduction is processed?

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.

How do you accumulate and review balances?

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.

Can I set up new balances, for the values that are important to my company?

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.

How do you enter compensation values for the payroll run?

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:

You can define validation rules to minimize data entry errors.

Wage Attachments

What wage attachments can I process using Oracle Payroll?

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.

Can I recoup my enterprise's costs automatically?

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.

Can I determine the earnings types and amounts that are liable for wage attachment deductions?

Using Wage Attachment Earnings Rules you can determine which earnings types are considered disposable income and liable for wage attachment deductions.

Can I prioritize payment of wage attachments?

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:

Once deducted from an employee's wage, how is the wage attachment made?

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.

Can I use another system to manage the wage attachments?

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.

Can Oracle properly calculate overtime according to FLSA guidelines?

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.

Additional Element Setup for Payroll

Formulas and Payroll Run Results

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.

Formula Inputs from Input Values or Database Items

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.

Varying the Processing by Employee Group or Statuses

There are several ways to vary the processing performed by formulas:

Types of Formula Results

Formulas can produce different types of run results:

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.

Formulas Included in Oracle Payroll Startup Data

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.

Pay Values

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 * 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 this assignment's Wages element. It stores this result in the element's Pay Value.

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.

You must define a Pay Value as one of the inputs for the element if you want Oracle Payroll to process an element for pay. You can have only one Pay Value for each element and it must have the name 'Pay Value'.

Net-to-Gross Processing of Earnings

You can define a bonus or other payment, which is a fixed net amount, using Net-to-Gross Processing. 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.

The following formulas are used in net-to-gross processing:

Net-to-gross elements always process separately, after you process the main payroll.

For details of how to set up a net-to-gross element, see Setting Up Elements for Net-to-Gross Processing

Balances for Net-to-Gross Processing

When you define the element for net-to-gross processing, you select which balances to exclude from the gross-up calculations. The employer pays all deductions except the ones you exclude.

Processing for Net-to-Gross Calculation

The formulas for net-to-gross processing do the following:

Element Span Usage

For each earnings element with a retrospective payments, you must define a RetroPay Component and corresponding element span usage. Defining the corresponding element span usages for the components, defines which Retropay elements get generated for the different time periods.

The following table provides an example of the user defined Earnings element - Salary with the retro components and retro elements attached:

Element Component Reprocess Type Time Span Retro Element
Salary Backdated Changes Reprocess Start of Year to End of Time Retro Earnings Current Year
Salary Backdated Changes Reprocess Start of Previous Year Less Than 12 Months to End of Previous Year Retro Earnings Prev Yr LT 12 Months
Salary Backdated Changes Reprocess Start of Time to End of 12 Months Retro Earnings GT 12 Mths

Calculate Adjusted Hourly Rates on a Daily Basis

Some earnings and allowances (adjustment elements) an employee receives such as Shift Allowance affect the employee's base hourly rate. If you award an employee one of these adjustment elements, for each day the employee receives the adjustment element, you must pay an adjusted hourly (daily) rate for the payment elements received, such as Overtime and Leave Payments.

Oracle Payroll performs these daily calculations for you. For each day of the payroll period, the application calculates the rate for the adjustment elements, the adjusted hourly (daily) rate for the payment elements, and then pays the correct rate for each element.

To have the application perform these calculations, you create a time definition, associate elements with the time definition, and then associate balances with the time definition dimension. When you run the payroll, the application automatically calculates the daily amounts for you, arriving at the employee's rate of pay for each day worked in a pay period.

See: Setting Up Pay to Calculate Adjusted Hourly Rates

Setting Up Total Compensation Elements for Payroll

Follow this process to set up earnings, deductions, and other items in the compensation package you offer to employees. This process assumes you are defining elements, formulas, balances, and other rules from scratch. However, you may be able to use template earnings and deductions that you select in the Configuration Workbench, or generate certain earnings and deductions using the Element Design Wizard or template windows, depending on your localization. You can then follow this process to configure the generated or template earnings and deductions, if required.

There are additional steps for setting up the following types of compensation and benefits:

Compensation and Benefits Setup

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Define Validation and Lookups

Define validation for entries of any new elements you are creating.

  1. 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.

  2. To validate compensation entries using formulas, write a formula of type Element Input Validation.

    See: Writing Formulas for Validation, Oracle HRMS FastFormula User Guide.

  3. To create a matrix of values (such as bonus amount against years of service) for use in formulas or QuickPaint reports, set up user tables.

    See: Setting Up User Tables, Columns, and Rows, Oracle HRMS Configuring, Reporting, and System Administration Guide.

    Define Element Skip Rules

  4. If some elements should not be processed in every payroll run, write formulas for element skip rules defining the conditions when the run should process these elements.

    See: Writing Formulas for Element Skip Rules, Oracle HRMS Configuring, Reporting, and System Administration Guide.

    Set Up Proration

  5. If the Proration tab is available on the Element window for your localization, you can set up proration. For earnings or deductions that the payroll run should prorate when relevant factors (such as pay rates, grades, or working hours) change during a pay period, make sure you have completed the basic proration setup steps. See: Setting Up Proration, Oracle HRMS Compensation and Benefits Management Guide.

    Define Elements

  6. Define elements and element input values:

  7. Define frequency rules, if necessary, to determine the periods in which the element should be processed.

    See: Defining Frequency Rules.

    Define Links for Predefined and User-defined Elements

  8. If the payroll costs of an element should be distributed over other elements, define a distribution set.

    See: Defining an Element or Distribution Set

  9. Define element links to identify one or more groups of employees who are eligible to receive an element.

    See: Defining Element Links.

    See also: Running the Element Link Details Report.

    Define Balances

    Oracle Payroll has many predefined balances installed with the system. You can define other balances.

  10. Define secondary element classifications.

    See: Defining Secondary Element Classifications.

  11. Create classes of balance feeds by entering or removing secondary classifications for your elements.

    See: Creating Classes of Balance Feeds.

  12. Define user balances and create balance feeds for individual elements.

    See: Defining User Balances.

    See: Creating Balance Feeds for Individual Elements.

    For information on uploading initial balances, please refer to the appropriate Legislative Balance Initialization technical essay.

    Write Payroll Formulas

  13. Oracle Payroll provides formulas for processing legislative deductions. For other elements, you can write formulas to calculate element results and other processing outcomes in payroll runs.

    See: Writing Payroll Formulas for Elements, Oracle HRMS FastFormula User Guide.

    Define Formula Processing and Result Rules

  14. To define which formula processes an element for Active assignments (and optionally for other assignment statuses), define processing rules for the element. To specify what happens to formula results (that is, the values you include in the formula's Return statement), define formula result rules.

    See: Defining Formula Processing and Result Rules.

    Define Rules for Net-to-Gross Processing

    If your localization supports net-to-gross processing, you can define rules for iterative processing of earnings and for excluding balances.

  15. Define rules for the processing of the iterative formula. See: Defining Iterative Processing Rules, Oracle HRMS Compensation and Benefits Management Guide.

  16. Specify which balances to exclude from the net-to-gross calculation. See: Excluding Balances From an Element's Grossup Calculation, Oracle HRMS Compensation and Benefits Management Guide.

    Make Entries

  17. For elements without Standard links, make entries of your elements for all employee who should receive them.

    See: Making Manual Element Entries.

Defining Frequency Rules

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

  1. Select the name of the payroll for which you want to define frequency rules.

  2. 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.

  3. 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.

Defining Formula Processing and Result Rules

Use the Formula Result Rules window to associate one or more formula processing rules with an element.

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.

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:

To associate processing rules with elements

  1. Set your effective date to the start date for the processing rule.

  2. Select the element for which you are entering rules. The element's description and classification automatically display.

  3. Click Find to display any existing processing rules for this element.

  4. In the Processing Rules region, select Standard and the regular formula for the element. If you have other formulas for this element, select them and the assignment statuses you want to associate with them.

    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.

  5. Save your entries.

To define formula result rules for each processing rule

  1. Click on a processing rule to select it.

  2. In the Formula Results region, select a formula result name from the list of results specified when the formula was written.

  3. 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 the application inserts an entry and any future dated changes to the entry remain unchanged by the results of the current payroll run.

  4. 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.

  5. For the formula result types Direct Result, Indirect Result, and Update Recurring Entry, select the input value to update.

  6. 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.

Setting Up Elements for Net-to-Gross Processing

Follow these steps to set up elements for net-to-gross processing.

To set up elements for net-to-gross process

  1. Define the elements, making sure you select the following rules:

  2. Choose the Input Values button to define the input values for these elements, as follows:

    Input Values for Net-to-Gross Earnings Types
    Input Value Name Purpose of Entry Checkbox: Required Checkbox: User Enterable Checkbox: Database Item
    Pay Value Oracle Payroll returns the gross pay to this input value when it has completed the net-to-gross calculations. No Yes Yes
    Amount Gives iterative formula the desired net pay. Yes Yes No
    Low Gross Used by the iterative formula to hold the lower gross pay guess, to feed into the next iteration of the formula. No No No
    High Gross Used by the iterative formula to hold the higher gross pay guess, to feed into the next iteration of the formula. No No No
    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. No No No
    To Within The amount by which actual net can differ from desired net after normal processing. Must not be zero but can be a nominal amount such as 0.01. Yes Yes No
    Method The method of iterative calculation: binary or interpolation. This determines which function the iterative formula calls. Use the lookup type ITERATIVE_METHOD and select the default INTERPOLATION, since this is usually the more efficient method. Yes Yes No
    Additional Amount The amount to add to desired net to calculate gross pay. Returned by the iterative formula. No No No

    See: Defining an Element's Input Values

  3. Click Balance Feeds to confirm which balances feed your net-to-gross element.

    See: Creating Balance Feeds for Individual Elements

  4. Click Balance Feeds Control to modify balance feeds that are not correct.

    See: Creating Classes of Balance Feeds

  5. Click Iterative Rules to set up the processing rules for the iterative formula.

    See: Defining Iterative Processing Rules, Oracle HRMS Compensation and Benefits Management Guide

  6. Click Exclude Balances to select the deductions to be paid by the employer.

    See: Excluding Balances From an Element's Grossup Calculation, Oracle HRMS Compensation and Benefits Management Guide

  7. Define the formula result rules for your elements:

    1. Select the CALC_GROSSUP_PAY_VALUE formula for the Standard processing rule.

    2. Create a formula result rule to feed the PAYMENT_AMOUNT result as a direct result to the element's pay value.

    See: Defining Formula Processing and Result Rules

  8. Define element links for your elements.

Setting Up Workplace Giving Deduction

Workplace Giving enables employees to make optional contributions to approved charities. The employee and employer mutually decide the charity to which the employee contributes. The employee provides information to the employer about the contribution amount per period. This Workplace Giving deduction reduces the employee’s taxable earnings for the period, thus reducing the amount of tax to be paid.

The following reports display the Workplace Giving deduction under Pre Tax Deductions:

The various Payment Summary reports display the Workplace Giving deduction as a part of the employee’s gross earnings amount and also as a deduction separately.

You can set up this deduction from the Element window.

To set up Workplace Giving deduction

  1. Create a user-defined element with a classification of Pre Tax Deduction.

    See: Defining an Element

  2. Create the following input values for the element:

  3. Create the following balance feeds for the element:

  4. Link the element to your payroll.

  5. Link the element to your employees and enter the Pay Value.

  6. Run the payroll.

Setting up Multiple Union Fee Deductions

Each year employees receive an Individual Non Business Payment Summary that lists the amounts withheld for union fees.

If your enterprise deducts fees for several unions, you must set up element and balance information for each union. The following procedure describes how to set up this information for one union fee deduction; repeat this procedure for each additional union.

See: Payment Summary Processing and Reporting Overview, Oracle HRMS Payroll Processing Management Guide

To set up a union fee

  1. In the Element window, create an element for the union fee with a classification of Voluntary Deductions.

  2. Ensure the element feeds the predefined balance Union Fees.

To set up multiple union fee

  1. In the Element window, create an element for the union fee with a classification of Voluntary Deductions.

    See: Defining an Element

    If your enterprise currently uses multiple union fees, identify the existing union fee elements.

  2. Create the following input values:

    See: Defining an Element's Input Values

  3. In the Balance window, create a balance for the element.

    To identify the balance and its corresponding element, follow a similar naming convention.

    See: Defining User Balances

  4. Enter the following dimensions for the balance:

    See: Defining User Balances

  5. Create a balance feed for the newly created balance.

    See: Defining User Balances

  6. Create a balance feed for the legislative balance Union Fees.

  7. In the Element window, complete the Further Information in the Union Fees Primary Balance field, selecting the balance you created for the element.

  8. Link the element to your payroll.

  9. Link the element to your employees and enter the Pay Value.

  10. Run the payroll.

Setting Up Reportable Employer Superannuation Contributions

Setting Up Reportable Employer Superannuation Contributions

Australian End of Year reporting reports the values of Reportable Employer Superannuation Contributions (RESC).

To report the Reportable Employer Superannuation Contributions within end of year reporting, perform the following set up:

To set up Reportable Employer Superannuation Contributions

  1. Create the required elements with input values.

  2. Enter the element input values that contribute to the balance Reportable Employer Superannuation Contributions through the element Balance Feeds.

Setting Up Elements for Retro-Processing

Setting Up Retro Components and Element Spans for Retro-Processing

If you are creating RetroPay elements manually, you must follow the process given below to set up retro components and element spans to process RetroPay correctly. If you are upgrading your current elements used by RetroPay by Element then you would need to use the Upgrade Process.

See: Running the Enhanced RetroPay Upgrade Process

You can retro pay any earning changes made in the current financial year, or in the previous financial year less than 12 months or in the previous financial year greater than 12 months. To carry out RetroPay processing, for every Earnings element defined, you must set up three RetroPay elements. These elements require the primary classification Earnings. You set up RetroPay component usages to define how RetroPay will process the component. For each of these components, you define an element time span to specify the start and end dates of the retro processing, and which RetroPay element applies for each time span.

Note: Each RetroPay element you create must have the skip rule, AU_RETRO_ PROCESSED_COUNT assigned to it.

  1. Defining RetroPay Earnings Elements

    1. You enter element information in the Element window.

    2. Define your salary element with the primary classification - Earnings.

    3. Click Balance Feeds Control. In the Balance Feed Control region select the appropriate element classifications from the list of values.

    4. Click Balance Feeds to view the resulting balances feeding the element.

    5. Define the retropay element for the current year, with the primary classification Earnings.

      Note: You must assign the skip rule AU_RETRO_ PROCESSED_COUNT to the element.

    6. Click Balance Feeds to view the resulting balances feeding the element.

    7. Save your work.

    8. Repeat these steps to create the elements and retro element for previous financial year Less than 12 months, and previous financial year Greater than 12 months.

  2. Setting Up RetroPay Component Usages

    RetroPay component usages assign the components to the salary elements you created, ensuring all the elements recalculate with the latest values.

    1. Query your defined salary element, in the Element window.

    2. Select the Recalculation tab, and click Retro Components.

    3. Associate the Event Group with each of the earnings elements that you created.

    4. In the RetroPay Components region of the RetroPay Element window, choose the component field, and select Backdated Changes.

    5. Select the Reprocess Type.

    6. Save your work.

    7. You can now enter the element time spans.

  3. Setting Up Element Span Usages for Earnings Elements

    The element time span usages defines the start and end dates for retropay processing. For each earnings element with a defined retropay component usage, you must define three element span usages. These element span usages cover the earnings in current financial year, defining not only how far back processing should cover, but also up to where a particular retropay element carries forward the retro changes. You must define your retropay elements and components before defining the element time spans.

    Set up the Element Span Usages in the RetroPay Elements window.

    1. Query your defined salary element in the Element window.

    2. Select the Recalculation tab, and click Retro Components.

    3. In the RetroPay Elements region, select the appropriate time spans from the From and To fields, to define the time period the retropay element is covering.

    4. In the RetroPay Element field, select the retropay elements you created .

    5. Save your work.

      See: Element Time Spans

  4. If you have not enabled the Dynamic Triggers and Payroll Event Model, the Retro Notification Report does not reflect the changes to assignments and elements that are yet to be retro-paid. You should make sure that there are no retrospective changes already in the application before you switch Event Monitoring on. You must manually add assignments and elements that are yet to be retro paid to the RetroPay Set using View RetroPay Status from the Self-Service menu. Then the application processes these assignments as expected.

  5. Setting Up for Pre Tax Deductions

    Oracle HRMS supports the deduction of the retro pre tax amounts from retro earnings of each time span separately as follows:

    Create appropriate feeds to the balances.

    For any Pre Tax Deduction elements, create three user defined retro elements, one for each retro time span – Current Financial year, Previous Financial Year Less than 12 Months, and Greater than 12 Months. You must associate to the element that you need to retropay using Retro Components.

    You must create the following balance feeds to the Pre tax retro elements:

    Element Retro Element Balance Feed Add or Subtract
    AU Pre Tax AU Pre Tax LT12 Curr Retro LT 12 Mths Curr Yr Amount Subtract
      AU Pre Tax LT12 Pre Retro Pre Tax LT 12 Mths Prev Yr Amount Add
      AU Pre Tax GT12 Retro Pre Tax GT 12 Mths Amount Add

Running the Enhanced RetroPay Upgrade Process

You run the RetroPay Upgrade process to create new elements for each Earnings element or Pre Tax Deduction element that you want to retropay. The upgrade process attaches these new retropay elements with proper balance feeds and formula result rules to allow Enhanced Retropay to process correctly. The application uses these new elements to create the retro component usages and element span usages for the retro-paid element.

Important: 11i users – Use this process when you migrate from RetroPay by Element to Enhanced RetroPay.

R12 users – Use this process as part of your upgrade to R12 to upgrade your RetroPay by Element data to R12 for use by Enhanced RetroPay. You run this process only once.

You run the RetroPay Upgrade process from the Submit Request window.

To run the Enhanced RetroPay Upgrade process

  1. Set up the Payroll Events Model for Enhanced Retropay to track and report any changes made to element entries for an assignment. You must

    See: Defining Dynamic Triggers, Oracle HRMS Payroll Processing Management Guide

    See: Grouping Dynamic Triggers into Legislative Functional Areas, Oracle HRMS Payroll Processing Management Guide

  2. You run the RetroPay Upgrade process from the Submit Request window. Select Upgrade Elements for Enhanced Retropay for all Australian Business Groups. The upgrade process processes only those elements satisfying the following conditions:

    The process creates the Retro Event Group - AU Enhanced Retro Event Group and attaches it to the element which you want to retropay.

    See: Defining Event Groups, Oracle HRMS Compensation and Benefits Management Guide

    To enable the processing of the various retro payment types, create the following elements for each retro element :

  3. If you have elements of other classifications that need to be paid retrospectively, you must manually set up the retro components usages and element span usages.

    See: Setting up Retro Component Usages and Element Span Usages.

    Tip: After you run the Upgrade process, check the concurrent logs to ensure all elements upgrade successfully. Manually create retro components for all elements that have not upgraded.

Setting Up Retro Overlap Control Process

Retro Overlap Control avoids recalculation of payroll runs for overlapping payroll periods and uses balance adjustments in memory for these periods. It helps in overall improvement in the performance of the RetroPay process.

Follow the steps to ensure that the retropay processing works accurately for overlapping periods:

  1. Ensure that Enhanced RetroPay is enabled and that the Legislation_code is set to AU.

  2. Ensure that the AU HRMS Reports and Processes request group includes Enable Retro Overlap for all AU Business Groups.

  3. Run the Enable Retro Overlap for all AU Business Groups process to enable the Legislation rule RETRO_OVERLAP. This enables the application to use the Retro Overlap functionality when processing retro payments.

  4. Run the script provided by Oracle Payroll to ensure that balance adjustments are established in-memory when running RetroPay. You must ensure to set up all the elements that feed a balance to derive a result as retro elements. Running the script identifies all such elements.

    See: RetroPay Overlap - A Technical White Paper (Doc ID 842307.1) on My Oracle Support

  5. Set up and verify all the elements feeding the balances.

    Primary Classification Secondary Classification Setup Required Mandatory/Optional Remarks
    Earnings Standard Mandatory For PAYG Tax Calculations
      Spread Mandatory For Spread and HELP/SFSS Tax Calculations
      Leave Loading Mandatory For PAY Tax Calculations
      Fixed Optional  
      Progressive Optional  
      Non Taxable Optional  
    Pre Tax Deductions   Mandatory For PAYG Tax Calculations
  6. Ensure that any of the new retro elements used purely for the derivation of retro balance adjustments are created with the Do Not Process flag.

  7. Make retrospective changes.

  8. Run the RetroPay Notification Enhanced (PDF) process.

  9. Run the RetroPay (Enhanced) process.

  10. Run Quickpay to view the results.

Setting up Pay to Calculate Adjusted Hourly Rates

You can correctly calculate pay on a daily basis, adjusting for earnings and allowances paid for that day.

See: Calculate Adjusted Hourly Rates on a Daily Basis

  1. Create a point in time definition.

    If you do not have a predefined point in time definition for one day, create this time period definition in self-service, using the Dynamic Time Periods page (listed under Other in the Navigation menu).

  2. Create a static time period definition.

    Use the Dynamic Time Periods self-service page.

  3. Create elements and associate them with the time definition.

    Use the Define Elements window to allocate the elements. On the Proration tab, click Static Allocation, and select the static time period definition for the Periodicity.

    Set the processing priority of the elements so that the elements process sequentially. The payroll processes the elements with the lowest processing priority first. If you associated time period definitions for fixed, spread, and progressive earnings elements, ensure that the application processes each deduction element once with the consolidated earnings amount.

    Note: To allocate elements based on time definitions for a group of employees for a specified period, you can use a PL/SQL hook.

  4. Create balances and associate them to the time definition dimension.

    In the Balances window, associate user defined balances to the time definition dimension ASG_LE_TD_RUN. Select a balance category to have the application generate and store the run balances.

    The dimension ASG_LE_TD_RUN retrieves the balance values for a time definition and the time span defined by the start and end dates.

    Note: Associate a time definition to every element that feeds this balance.

  5. Associate fast formulas.

    You can associate fast formulas with the payment elements to compute the payment amount on a daily basis. The fast formula runs for each element allocation in the payroll period. Fpr the fast formula, use the Static Period Start Date and End Date as inputs prorate_start and prorate_end.

  6. Run the payroll.

    The payroll process allocates the elements on a daily basis and computes expected earnings and allowances. The application uses payroll period earnings, such as weekly payroll period earnings, for standard PAYG taxation on earnings.

Balances

Payroll Balances

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.

Balance Dimensions and Levels

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.

Choosing Elements To Feed a Balance

You can select elements to feed a balance in three ways:

Note: Secondary classifications are not used in the North American versions of Oracle Payroll at this time.

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.

Startup and User Defined Balances

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.

Payroll Balance Dimensions

The following dimensions are predefined. You can create additional dimensions at the assignment level, if you require them.

Standard Dimensions

You are likely to use these dimensions to sum values for single assignments for your own balances.

The following table describes the Standard Dimensions in Australian Payroll:

Standard Dimensions
Dimension Description
_ASG_CAL_YTD since start of calendar year, reset every year
_ASG_MTD since start of calendar month, reset each month
_ASG_PTD for payroll processing
_ASG_QTD since start of calendar quarter, reset each quarter
_ASG_RUN during one payroll run
_ASG_TD since start of assignment
_ASG_YTD since start of tax year, reset each tax year

Statutory Dimensions - Single Assignments

These statutory dimensions are normally used for summing balance feeds for single assignments to predefined balances.

The following table describes the Statutory Dimensions used in Australian Payroll:

Statutory Dimensions
Statutory Dimensions Description
_ASG_FBT_YTD since start of FBT year, reset each FBT year
_ASG_FY_QTD since start of fiscal quarter, reset each fiscal quarter
_ASG_FY_YTD since start of fiscal year, reset each fiscal year
_ASG_LE_MTD for legal employer, from start of calendar month, reset each month or with a change in legal employer
_ASG_LE_PTD for payroll processing for a legal employer
_ASG_LE_QTD for legal employer, from start of calendar quarter, reset each quarter or with a change in legal employer
_ASG_LE_RUN for legal employer, during one payroll run
_ASG_LE_TD_RUN for legal employer, during one payroll run, for a time definition and each combination of start and end date
_ASG_LE_YTD for legal employer, from start of tax year, reset each tax year or with a change in legal employer
_ASG_LE_LTD for legal employer, life time till date
_ASG_LE_FY_QTD for legal employer, from start of fiscal quarter, reset each fiscal quarter or with a change in legal employer
_ASG_LE_FY_YTD for legal employer, from start of fiscal year, reset each fiscal year or with a change in legal employer
_ASG_FBT_LE_YTD for legal employer, from start of FBT year, reset each FBT year or with a change in legal employer

Payments Dimension

This is a special dimension which aggregates results from payroll runs that have been picked up in a particular pre-payments run.

The following table describes the Payments Dimension in Australian Payroll:

Payments Dimension
Payments Dimension Description
_PAYMENTS for a set of payroll runs

Australian Balances

The following tables list balances specific to Australia:

Earnings Balances
Balance Name Description
Earnings_Leave_Loading Leave loading earnings
Earnings_Progressive Progressive earnings
Earnings_Standard Standard earnings
Earnings_Fixed Fixed earnings
Earnings_Spread Spread earnings
Earnings_Non_Taxable Non-taxable earnings
Earnings_Total Combined earnings
Deduction Balances
Balance Name Description
Voluntary Deductions Voluntary deductions
Involuntary Deductions Involuntary deductions
Foreign Leave Component Deduction Foreign Leave Component Deduction
Pre-Tax Deductions Balances
Balance Name Description
Pre Tax Spread Deductions Pre-tax spread deductions
Pre Tax Fixed Deductions Pre-tax fixed deductions
Pre Tax Progressive Deductions Pre-tax progressive deductions
Pre Tax Deductions Combined pre-tax deductions
Workplace Giving Deductions Deductions for Workplace Giving contribution
Tax Deduction Balances
Balance Name Description
HECS_Tax_Deductions HELP tax deductions
Fixed_Tax_Deductions Fixed tax deductions
Spread_Tax_Deductions Spread tax deductions
HECS_Spread_Deductions HELP spread tax deductions
Progressive_Tax_Deductions Progressive tax deductions
Standard_Tax_Deductions Standard tax deductions
Total_Tax_Deductions Tax deductions
MLS Tax Deductions MLS tax deductions
SFSS Tax Deductions SFSS tax deductions
Extra Withholding Payments Extra withholding payments
Foreign Tax Deductions Foreign Tax Deductions
Termination Deduction Balances
Balance Name Description
Lump Sum A Deductions Lump Sum A deductions
Lump Sum B Deductions Lump Sum B deductions
Lump Sum C Deductions ETP deductions
Termination Deductions Termination deductions
Foreign Lump Sum A Deduction Foreign Lump Sum A Deduction
Employer Superannuation Balances
Balance Name Description
Super_Guarantee Super guarantee
Employer_Charges Employer charges
Non_Super_Guarantee Non super guarantee
Employer Superannuation Contribution Employer superannuation contribution
Payroll Tax Balances
Balance Name Description
Payroll_Tax_ACT Payroll tax for state Australian Capital Territory
Payroll_Tax_NSW Payroll tax for state New South Wales
Payroll_Tax_NT Payroll tax for state Northern Territory
Payroll_Tax_QLD Payroll tax for state Queensland
Payroll_Tax_SA Payroll tax for state South Australia
Payroll_Tax_TAS Payroll tax for state Tasmania
Payroll_Tax_VIC Payroll tax for state Victoria
Payroll_Tax_WA Payroll tax for state Western Australia
Termination Payment Balances
Balance Name Description
Leave Payments Marginal Leave payments marginal
Lump Sum A Payments Lump Sum A payments
Lump Sum B Payments Lump Sum B payments
Lump Sum C Payments ETP payments
Invalidity Payments Invalidity payments
Lump Sum D Payments Lump Sum D payments
Termination_Payments Combined balance for all termination payments
Annual Leave Loading on Termination Termination leave loading
Foreign Lump Sum A Payments Foreign Lump Sum A Payments
Foreign Leave Payments Marginal Foreign Leave Payments Marginal
Termination Payroll Tax Balances
Balance Name Description
Payroll_Tax_ACT_Termination_Payments Combined balance for all termination payments for payroll tax for state Australian Capital Territory
Payroll_Tax_ACT_Eligibile_Termination_Payments Combined balance for eligible termination payments for payroll tax for state Australian Capital Territory
Payroll_Tax_NSW_Termination_Payments Combined balance for all termination payments for payroll tax for state New South Wales
Payroll_Tax_NSW_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state New South Wales
Payroll_Tax_NT_Termination_Payments Combined balance for all termination payments for payroll tax for state Northern Territory
Payroll_Tax_NT_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state Northern Territory
Payroll_Tax_QLD_Termination_Payments Combined balance for all termination payments for payroll tax for state Queensland
Payroll_Tax_QLD_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state Queensland
Payroll_Tax_SA_Termination_Payments Combined balance for all termination payments for payroll tax for state South Australia
Payroll_Tax_SA_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state South Australia
Payroll_Tax_TAS_Termination_Payments Combined balance for all termination payments for payroll tax for state Tasmania
Payroll_Tax_TAS_Eligible_Termination_Payments Combined balance for all termination payments for payroll tax for state Tasmania
Payroll_Tax_VIC_Termination_Payments Combined balance for all termination payments for payroll tax for state Victoria
Payroll_Tax_VIC_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state Victoria
Payroll_Tax_WA_Termination_Payments Combined balance for all termination payments for payroll tax for state Western Australia
Payroll_Tax_WA_Eligible_Termination_Payments Combined balance for eligible termination payments for payroll tax for state Western Australia
Retro Payment Balances
Balance Name Description
Retro LT 12 Mths Curr Yr Amount Retro amount for the current year
Retro LT 12 Mths Prev Yr Amount Retro amount for the previous year
Lump Sum E Payments Lump Sum E payments
Payment Summary Reporting Balances
Balance Name Description
CDEP CDEP
Union Fees Union fees
Reportable Employer Superannuation Contributions Reportable Employer Superannuation Contributions
Workplace Giving Deductions Workplace Giving deductions
Foreign Tax Payments Foreign Tax Payments
Leave Balances
Balance Name Description
Leave Leave
Leave Hourly Rate Hourly rate for leave
Statutory Paid Parental Leave Payments Paid Parental Leave Payments
Foreign Worker Days Foreign Worker Days
Foreign Leave Payments Foreign Leave Payments
Fringe Benefit Balance
Balance Name Description
Fringe Benefits Fringe benefits
Direct Payment Balance
Balance Name Description
Direct Payments Direct payments
Total Payments Balance
Balance Name Description
Total Payments Total payments
Advance Outstanding Balance
Balance Name Description
Advance Pay Outstanding Advance pay outstanding
ETP Balances
Balance Name Description
ETP Redundancy Payments ETP Redundancy Payments
ETP Tax Free Payments Excluded ETP Tax Free Payments Excluded
ETP Taxable Payments Excluded ETP Taxable Payments Excluded
ETP Tax Free Payments Non Excluded ETP Tax Free Payments Non Excluded
ETP Taxable Payments Excluded ETP Taxable Payments Excluded
ETP Payments Excluded ETP Payments Excluded
ETP Payments Non Excluded ETP Payments Non Excluded
ETP Deductions Excluded ETP Deductions Excluded
ETP Deductions Non Excluded ETP Deductions Non Excluded
ETP Deductions Excluded Part of Prev ETP Deductions Excluded Part of Prev
ETP Deductions Non Excluded Part of Prev ETP Deductions Non Excluded Part of Prev

Defining Secondary Element Classifications

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

  1. 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.

  2. Enter a unique name for the secondary classification you want to associate with the displayed primary classification. You can also add a description.

  3. 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.

Creating Balance Feeds for Individual 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

  1. Set your effective date to when you want the balance feed to start.

  2. Enter or query the element in the Element window and choose the Balance Feeds button.

  3. 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.

  4. 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.

  5. 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.

Creating Classes of Balance Feeds

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

  1. Set your effective date to when you want the element to begin feeding the balances that the secondary classifications feed.

  2. Enter or query the element in the Element window and choose the Balance Feed Control button.

  3. 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.

  4. Select any non-default secondary classifications you require.

Defining User Balances

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

  1. Do one of the following:

  2. 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.

  3. Optionally, select a Base Balance.

  4. 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.

  5. 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).

  6. Go to the Balance Feeds window or the Balance Classifications window.

    In the Balance Feeds window:

    In the Balance Classifications window:

    Note: Secondary classifications are not used in the North American or Singapore versions of Oracle Payroll at this time.

    Balance Dimensions Window

  7. Choose the Dimensions button.

  8. 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.

  9. 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.

    Initial Balance Feed Window

  10. Choose the Initial Feed button.

  11. 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.

    Balance Attributes window

  12. Choose the Attributes button.

  13. 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.

    Note: 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.

Uploading Initial Balances

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

  1. Define an element and input value for the initial balance feed. Select the classification Balance Initialization for this element.

  2. 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.

  3. In the Submit Requests window, select Initial Balance Upload.

  4. 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

  5. Select the batch to be processed.

  6. Choose the Submit button.

  7. Continue to run the process for as many modes as you require.

Third Party Payments

Third Party Payments

Oracle Payroll enables you to make both single and recurring deductions from worker salary for third party payments, and to specify either corporate bodies or individuals as payees. The deductions you can make include third party payments and union dues.

You need to define payment methods for third party payments and enter these for your payrolls.

How you pay third parties is determined by the Third Party Payment check box on the Element window when you define the deduction. If this check box is unchecked, you must pay third parties outside Oracle Payroll through Accounts Payable. If it is checked, you can pay third parties through Oracle Payroll, using a third party payment method that you have defined.

Third Party Payments Overview

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:

Handling third party payments

Oracle Payroll handles third party payments using:

Legislative Differences

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.

Elements

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.

Third Party Payment Processing Sequence

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.

Formulas

You can use the predefined formulas to determine how third party payments are processed in your organization. For example you can do the following:

See: Formulas and Payroll Run Results

Balances

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.

How Oracle Payroll Manages Deductions

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.

Protected Earnings

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.

Managing Different Third Party Payments

You can use Oracle Payroll to manage both kinds of third party payment:

Ending Third Party Payments

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.

Preparing Third Party Payment Information at the End of Employment

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.

Third Party Payment Deductions

The third party payments that you can process depend on the specific third party payments that apply to your legislation. Examples of third party payments include child support payments, educational loans, taxes to local authorities, alimony, and bankruptcy orders.

The following table lists the deductions you can make using Oracle Payroll.

Third Party Payment Legislation
Credit Debt/Garnishments US
Bankruptcy Order US
Federal Tax Levy (State and Local Tax Levies are not supported by Oracle Payroll) US
Federal DCIA Order US
Spousal Support Order, Child Support Order, and Alimony US
Educational Loan US
Employee Requested Payment US
Court Orders and Arrestments UK
Council Tax Attachments UK
Court Orders France
Maintenance Orders Ireland
Variation Orders Ireland
Interim Orders Ireland
Compensation Orders Ireland
Social Welfare Orders Ireland

Making Third Party Payments

Use this process to make third party payments through Oracle Payroll. Third party payments include

In Australia, you can also use this process to set up employer superannuation contributions. After payroll processing takes place, the pay value of the deductions element is paid according to the third party payments method you selected.

To make third party deductions from individual assignments

  1. Create the organization or person to receive the third party payment.

    You create payee organizations in the Organization window, selecting the Payee Organization classification.

    See: Creating an Organization, Oracle HRMS Enterprise and Workforce Management Guide

    You create individual payees as contacts of the person making the deduction. In the Contacts window, check the Payments Recipient check box when you create the payee.

    See: Entering Next of Kin and Other Contacts, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide

  2. Link the third party element to your payroll.

  3. In the Personal Payment Method window, select a third party payment method for the assignment. In the Payee region, select the payee you have created.

    See: Entering Payment Methods for an Employee Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide

  4. Create an element entry for the deduction.

    See: Entering Third Party Payment Information

    In the Entry Values window, you enter details of payment, payee and payment method. Required entry information varies according to the kind of deduction you are making.

When you have completed these setup steps you can run a payroll to process the third party payment that you have just defined.

Entering Third Party Payment Information

Information about each Third Party Payment that must be discharged against your worker is stored in a separate third party payment element.

Third party payments can include Wage Attachments, Wage Garnishments, and Court Orders and your legislation may already have predefined elements to support each of these types of deduction.

Use the Element Entries window to assign your worker a Third Party Payment element.

To enter Third Party Payment for a worker

  1. Query your employee in the People window, and set your effective date to the day on which the third party payment should commence for your worker.

  2. In the Element Entries window, select the third party payments element .

  3. Enter costing information in the Cost Allocation KF window or choose Cancel.

  4. Choose the Entry Values button to open the Entry Values window.

  5. Enter the unique attachment sequence number of the third party payment.

    You must supply a unique attachment sequence number for your third party payment; otherwise, your payroll run will fail. After your payroll run is successfully processed, in the Result Values window, you can identify the Results element created for your third party payment by its attachment sequence number.

  6. Enter the time you received the third party payment and the unique case number assigned by the court administering the third party payment.

  7. Select the third party payment's processing type.

  8. Enter the third party payment's sub-processing type and administering court's name. The sub-processing type is used by the system only for information and is not considered during calculation or administration of the third party payment.

  9. Enter the principal base and court fee base for the third party payment.

  10. If the third party payment has an interest base, enter it. Enter the start and end dates for the interest base. The start and end dates for a third party payment that has an interest base are only for information and have no bearing on administration or calculation.

  11. Indicate whether or not a judicial decision statement of the obligation-release processing type has been received for the third party payment and the date of such receipt. To set the Obligation Release field to Yes, you must update the field.

    When the third party payment's processing type changes to obligation release from any other processing type, you must select Yes in the Obligation Release field. You do not need to assign a new third party payments element to the employee

  12. Select the third party creditor for the court order from the list of values in the Payee Details field.

  13. Save your work.

To enter interest bands

If the third party payment has interest bands, then you need to specify them in the Further Element Entry Information window:

  1. Click in the Further Entry Information field to open the Further Element Entry Information window.

  2. Specify the start date, end date, base, and rate of each interest band. You can specify a maximum of five interest bands. A interest band is invalid if it does not have a start date. If an end date is not specified, the system uses the next applicable payout date.

  3. Save your work.

To change processing type from provisional attachment to actual seizure and collection, actual all attachment

Some localizations enable you to specify whether a third party payment is a provisional attachment, an actual seizure and collection, or an actual all attachment.

When the processing type of the third party payment changes from provisional attachment to actual seizure and collection or actual all attachment, you must assign a new third party payments element to the employee in the payroll-processing period in which the processing type changes.

  1. In the Element Entries window, enter information pertaining to the new judicial decision statement.

  2. If the third party payment uses an interest base, enter the same values for the principal base, court fee base, and interest base that you entered for the old third party payments element.

  3. If the third party payment uses interest bands, enter the same values for the principal base and court fee base that you entered for the old third party payments element. While setting up interest bands, begin with the interest band within which the next payroll-processing date will fall. The start date of this band should be the last payout date for the old third party payments element.

  4. Select the case number for the old judicial decision statement for the third party payment in the Further Element Entry Information window.

  5. Save your work.