Calculating Legal Provisions

This chapter provides an overview of legal provisions, lists prerequisites, and lists delivered elements for calculating provisions.

Understanding Legal Provisions

To guarantee that companies have sufficient funds to compensate employees for accrued vacation time (including 1/3 vacation) and 13th salary, and that monies are available for related INSS (Instituto Nacional do Seguro Social) and FGTS (Fund of Guarantee for Service Time) payments, Brazilian companies must set aside provisions to cover these payments. Global Payroll for Brazil can calculate and report the provisions required for each month.

Provision Calculations

Each month, after you finalize the payroll process, you can run a second process that calculates provisions for the same payroll period.

To calculate provisions, create a calendar group that is similar to that used for the payroll process. Associate each calendar in the calendar group with run type, KR PROVIS. This run type is associated with the process list PROVISOES, which uses an accumulator with a calculation base that includes monthly salary, as well as other fixed and any variable wages that employees receive as part of their monthly pay. Each provision has its own accumulator to meet the specific legal requirements. To run the process, use the Calculate Absence and Payroll run control page.

Average versions are defined by union code, run type and element. To calculate provisions based on a run type other than KR PROVIS, set the variable FP VR RUN TYPE to the run type that represents the accurate average version. You can set this value at the calendar level or other level, including via other elements.

The system calculates provision amounts on the last segment only.

Note. The system uses prorated vacation entitlement as the basis for calculating provisions for vacation entitlements.

Provision Reporting

After you calculate provisions, you can review the results by generating the Results Register (GPBRRR01) or Payslip for Brazil (GPBRPS01) reports. The Results Register uses the element list that you specify on the report’s run control page; payslips use the element list that you select in the Format ID field on the run control page.

The element list determines what content to retrieve and include in the report and also determines the title that appears on the report. Define element lists on the Element List BRA page.

See Selecting Report Elements and Defining Payslip Sort Order.

Prerequisites for Calculating Provisions

To configure the system to calculate provision amounts:

• Assign the element group, KR EG PROVISAO to all eligibility groups.

• Create the element list to use when reporting the provision calculations.

Viewing Delivered Elements for Provisions

This section lists:

• Delivered earning elements for provisions.

• Delivered deduction elements for provisions.

• Delivered process list for provisions.

Delivered Earning Elements for Provisions

This table lists the delivered earning elements that the payroll calculation process uses when calculating provision amounts:

Delivered Deduction Elements for Provisions

This table lists the delivered deduction elements that the payroll calculation process uses when calculating provision amounts:

Delivered Process List for Provisions

This table lists the delivered process list that the payroll calculation process uses when calculating provision amounts:

The process list includes the following sections:

• KR REMUN MENSAL (base remuneration - monthly)

• KR PROVISAO FER (vacations earning).

• KR PROVISAO 13 (13th salary earning).

• KR PROVISAO FER EN (vacations deductions and taxes).

• KR PROVISAO FE DIF (difference between previous and current).

• KR PROVISAO 13 ENC (13th salary deductions).

Note. Run type KR PROVIS is also delivered.