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Oracle® Fusion Applications Compensation Management Implementation Guide
11g Release 1 (11.1.4)
Part Number E20376-04
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20 Define Base Pay

This chapter contains the following:

Define Base Pay: Overview

Salary Component Lookups: Explained

Manage Salary Basis

Define Base Pay: Overview

Configure compensation frequency values, grade rate validation data, and payroll elements for quoting and paying base pay. Also manage lookups, actions, and action reasons related to base pay management.

To define base pay, application implementors and compensation administrators start from the Setup and Maintenance Overview page. Select Navigator - Setup and Maintenance.

Salary Component Lookups: Explained

Salary components itemize new or adjusted salary into one or more components that reflect different reasons for the allocation. You can edit or add components to the Salary Component lookup type during initial implementation and at any later time.

The following salary components are predefined:

To add or edit these codes in the CMP_SALARY_COMPONENTS lookup type, start in the Setup and Maintenance work area and search for lookup tasks.

Manage Salary Basis

Salary Basis: Critical Choices

Create a salary basis by choosing a set of the following characteristics associated with a worker's base pay:

Important

You must create a separate salary basis, with a unique name, for each unique combination of these factors. Using a descriptive name for the salary basis is a good practice if you require many salary bases in your organization.

After you associate the salary basis with any worker, you cannot delete it or modify any characteristic other than component configuration.

Frequency

Frequency defines the period of time in which a worker's base pay is quoted, either hourly, monthly, annually, or the payroll period frequency. The salary basis frequency is not necessarily the same as the payroll frequency. For example, a worker paid an hourly wage can have an hourly salary basis frequency but a weekly payroll frequency.

To match the salary basis frequency to the payroll frequency, select Payroll period frequency on the salary basis. A worker who has multiple assignments or employment terms on different payroll frequencies requires a different salary basis associated with each assignment or employment term.

Annualization Factor

The annualization factor is the multiplication factor used to convert base pay at the selected frequency to an annualized amount that enables you to see how much a worker would be paid over a year at the current rate.

The following table shows the default factors supplied for the frequency options. You can override the supplied default values.


Frequency

Default Annualization Factor

Annually

1

Monthly

12

Hourly

No default is supplied. Enter the number of hours in a work year to multiply by the hourly rate to calculate the annualized salary for this salary basis.

Payroll Period

Leave blank. Annualization is determined by the period type on the payroll linked to a worker's assignment or employment terms.

Legal Employer

You configure each salary basis for a specified legal employer. If your organization has multiple legal employers, you must create a uniquely named salary basis for each unique set of characteristics applicable to each legal employer.

Payroll Element and Input Value

You attach a single existing payroll element to each salary basis to hold base pay earnings. Only elements that are valid for the selected legal employer are available for selection. You must select one input value from the list of valid values for the selected element.

Note

Recurring elements can be linked to multiple salary bases only if they are classified as earnings elements and configured to allow multiple entries in the same period.

When a manager or compensation specialist enters a base pay amount for a worker, the amount is written to the payroll element input value associated with the worker's salary basis.

Grade Rate

You can optionally associate one existing grade rate with the salary basis for salary validation purposes. Only grade rates that are valid for the selected legal employer are available. Managers or compensation professionals receive a warning message if they enter a total salary amount outside the relevant range specified in the grade rate.

Salary Components

Salary components itemize new or adjusted salary into one or more components that reflect different reasons for the allocation. To configure the use of salary components during salary entry or adjustment, choose from the following options:

Validating Salaries: Points to Consider

Salary validation helps you verify that salary allocations fall within the appropriate range for each worker. You can choose between two methods of validating salaries:

Validating Salaries Against Grade Ranges

Generate a warning message when a manager or compensation professional enters a new or adjusted salary that is outside the minimum or maximum values defined for the worker's grade in the grade rate attached to the salary basis.

Validating Salaries Using Elements

Prevent approval of a new or adjusted salary that does not pass validation configured on the payroll element input. When you define an input value for the salary element, you can write and attach a formula to perform validation, or you can enter minimum and maximum valid values. If you want to vary the validation for different groups of workers, you can enter validation criteria as part of the element link.

FAQs for Manage Salary Basis

Where does the annualization factor for a salary basis that uses payroll period frequency come from?

The period type on the payroll linked to a worker's assignment or employment terms determines the number of payroll periods in a year.

Can I use the same payroll element in more than one salary basis?

Yes, if it is a recurring element that is classified as an earnings element and configured to allow multiple entries in the same period.

Can I edit or delete a salary basis that is in use?

No. If the salary basis has been assigned to any worker, you cannot delete it. You can modify only the salary component configuration.

Can managers change a salary basis?

Yes, if edit capability is enabled for the salary basis. You can hide or show the edit capability for managers using personalization on the pages where managers enter salary allocations.

What happens if a salary fails grade rate validation?

A warning message informs the manager or compensation professional that the salary is out of the valid range for the worker. The message can be ignored or the salary revised to fall within the valid range.