Setting Up Country Data

This chapter provides an overview of Global Payroll core functionality in Spain and discusses how to:

• Set up statutory rates.

• View delivered elements.

Understanding Global Payroll Core Functionality in Spain

This section discusses:

• Retroactivity.

• Payment keys.

• Accumulators.

• Segmentation.

• Triggers.

• Rounding rules.

• Process lists.

Retroactivity

Retroactivity is the process of going back in time and recalculating prior calendars because changes were made after the original calculation was run. When retroactive processing occurs for a payee, the system recalculates each element generated for the payee. The difference between these results is the retro delta.

In Global Payroll, there are two methods for calculating retro:

• Corrective

• Forwarding

The most common retro method used in Spain is the corrective method. Using this method, you go back and recalculate the elements of the pay run, updating all accumulators, including balance accumulators and calendar period accumulators. The recalculated pay run replaces the previously calculated run. However, the original pay run calculation remains available for auditing and reporting purposes. Rather than forwarding retro deltas to the current calendar as an adjustment, the system sends any adjustment to "Net to be Paid" for the recalculation period for the banking process to be managed.

Note. You can also set up retro with the forwarding method during your implementation, if it fits your company's needs.

Global Payroll for Spain and Retroactivity

Global Payroll for Spain delivers the corrective method as this is the standard (statutory) way to manage retroactivity in Spain.

• The retro process (RETRO) uses the corrective method without variance.

• Retro overrides are used in Global Payroll for Spain. They serve the following purpose:

  • To make it easy to report retro calculations to Hacienda.

    The system forwards the tax information for the current period using the IRPF RTR element. This element receives the value from the IRPF AFW element that is forwarded into IRPF RTR in a retro calculation of a month in the same year. In this way, the current month has all of the information affecting taxes. Also, the current tax percentage can be applied to the delta coming from a retro calculation.

  • To manage retro across different tax years.

    The system uses the element IRPF AFW to calculate taxes corresponding to delta due to a retro calculation of a month belonging to a closed tax year. For these cases of retro, the system does not forward taxes values to the current month but rather keeps them in the retro month. Later, the monthly and year-end reports retrieve those values and print them accordingly.

Note. Define retro overrides on the Retro Process Overrides page.

See Defining Retroactive Processing.

• Define your own retro event.

• Define your own retro triggers according to your company needs.

• Define your own pay entities according to your company needs, but the common setup in Global Payroll for Spain is:

  • Calendar period: Starts in January.

  • Fiscal period: Starts in January.

  • Backward limits: Depends on how you set up Global Payroll for Spain.

  • Forward limits: Two years.

Launching Retroactivity Across Different Tax Years

When the prior period is in a different tax year, your company can't collect the tax due and pay it to Hacienda because the prior year is already closed for tax reporting. This applies to both situations of underpayment and overpayment.

The solution is that, when reporting to Hacienda, deltas of the previous year are considered. The deltas are considered in Model 111 of the current month and in Model 190 for the current year (at the end of the year) as income from a previous tax year. The system calculates the IRPF tax for that delta by applying a fixed percentage (currently at 15 percent), instead of the valid IRPF percentage in the retro period or the current period.

Note. Taxes and social security are calculated differently. Social security calculation is not affected when the retro calculation is across different tax years. The way to calculate retro in this case is the same as the one used in calculating retro in the current year.

Example of Calculating Retroactivity for a Different Tax Year

Let's say that both the calendar period and the fiscal period for your pay entity start on January 1. If the retro starts in a different tax year, the fiscal period determines how the retro of taxes is calculated. The following provides the details for this example:

• Launch the calculation for the May 2006 pay period.

• Launch a retro calculation for November 2005.

• Report the tax calculation for the deltas from all the launched retro from November until April in the Model 111 of May 2006.

  In the case of the retro for November 2005 and December 2005, the IRPF for the delta is calculated with a 15 percent tax rate. Model 190 will reflect it accordingly.

Note. This table summarizes all the information you'll need for your retro calculation. This table is only a suggestion using the common setup parameters that is delivered with Global Payroll for Spain. You may find that your company's requirements are different and may need to define retro differently during your implementation.

Running Corrections in Global Payroll for Spain

The pure retro process calculates from a target calendar, which receives forwarded tax data regarding deltas, and updates the balance accumulators of the recalculated month. You then report the delta from the retro processing for the target calendar through complementary reporting. Thus, if you have already reported social security contributions for a given month and need to recalculate, you use pure retro processing. For example, if a company signs a labor agreement in May but needs to increase salary starting from January 1, then the company must run pure retro processing from January in the May payroll (target calendar). The company then reports the deltas from the retro calculation in a complementary report within the May FAN file.

Corrections, on the other hand, are cases where you need to rerun a finalized payroll but have not yet reported to social security for that month. Corrections enable you to report the delta on the regular monthly reporting rather than through complementary reporting. You are thus correcting a finalized payroll.

With Global Payroll for Spain, you can run corrections by using a specific run type or by using Global Payroll core off-cycle functionality. The Managing Off-Cycle Payments chapter explains both methods in detail.

See Also

Calculating Social Security Benefits

Calculating Taxes

Defining Retroactive Processing

Managing Off-Cycle Payments

Payment Keys

In Global Payroll for Spain, you can define payment keys. Options are Company, Contract Number, Department, and Establishment ID. When the payment keys of the current period don't match the payment keys in the retro period, the deltas are managed as a separate gross-to-net calculation in the current calendar period. When a retro is launched that affects more than one calendar period, the deltas that come from each one will be summed only when the payment keys match.

For example, company information is needed for tax reporting purposes. The Agencia Tributaria needs to know in which company the employee is working and being paid from.

So when retro is launched, you may need to report the tax calculation of the deltas related to the prior company. Or you may need to report the tax calculation of the deltas related to the current company. It all depends on which company is declaring the payment to the fiscal territory.

Because the corrective retro method is used in Global Payroll for Spain, deltas are not forwarded into the current period in most cases. However, regarding tax calculation, the income deltas are transferred to the current period. You should review this during implementation and set up according to your organizational requirements.

See Also

Defining the Organizational Structure

Defining Retroactive Processing

Accumulators

In Global Payroll for Spain, there are two types of accumulators:

• User-defined accumulators (balance accumulators):

  Accumulate different elements for any period of time for which you want to accumulate any number of elements.

• Auto-generated accumulators (payment accumulators):

  Accumulate a particular element during a defined period.

For user-defined accumulators, there are four functional areas that have specific prefixes:

• Absences accumulators (AUS).

• Earnings and deductions (AJB, FNQ, and GEN).

• Social security (SS).

• Taxes (TAX, RETJ).

For auto-generated accumulators, there are two functional areas that have specific suffixes:

• Absences (ADJU, BAL, ENT, TAKE).

• Deductions (ATR).

In Global Payroll for Spain, you'll define accumulators for several earnings and deductions. Accumulators for earnings include those for base salary, seniority pay, mejora voluntaria, complemento absorbible, and extra period payments. Accumulators for deductions include social security deductions.

Customer-Oriented Segment Accumulators

Global Payroll for Spain also delivers a set of customer-oriented segment accumulators. When you define an earning or deduction element, you can assign the element to these accumulators. You will need to decide which accumulators you need to update, based on the following questions:

• How does the element affect gross?

• Is the element taxable or not?

• Does the element contribute to social security or not?

Depending on your answer to these questions, you need to select the appropriate accumulator. The following tables provide details about the customer-oriented segment accumulators:

Compensation:

Taxes:

Note. You can include an earning in just one of these tax accumulators.

Social Security:

Other purposes:

See Also

Element Ownership and Maintenance

Setting Up Accumulators

Segmentation

In Global Payroll, you can segment elements based on different events or changes. There are two types of segmentation:

• Period segmentation:

  The system calculates each element more than once and keeps the results of these calculations separate.

• Element segmentation (also known as slice segmentation):

  The system segments only the element selected. There is only one gross-to-net result set.

Global Payroll for Spain uses element segmentation in most cases. There are many reasons why a slice can occur:

• Changes in rate codes.

  This can occur due to manual changes or automatic changes due to a salary plan, category or multiple components change.

• Changes in an employee's annual salary (target compensation)

• Changes to risk code.

• Change in tax location (fiscal territory)

• Changes in the social security work center code (SSN).

  This normally happens when an employee changes establishments.

Global Payroll for Spain uses period segmentation for these changes:

• Changes in company (when an employee transfer to a different company).

• Changes in pay group.

• Changes in employees' payroll system.

  Global Payroll for Spain uses the Payroll System field to determine employees' payroll system.

Note. Global Payroll for Spain delivers segmentation setup and triggers as sample data. You must decide which changes should trigger segmentation for your company. View the delivered segmentation rules and triggers using pages in Global Payroll in your demo installation.

See Also

Defining Segmentation

Triggers

In Global Payroll, triggers are used to detect online changes to data that should result in some type of system action. Examples of common data changes that might use triggers are the hiring of a new payee, a change in pay rate, or a change in job location.

There are three types of triggers, iterative, segmentation, and retro triggers.

Global Payroll for Spain delivers triggers as sample data. Review the delivered triggers and adjust existing triggers or define your own triggers based on your company's needs.

Iterative Triggers

This table lists some iterative triggers delivered with Global Payroll for Spain as sample data:

Segmentation Triggers

This table lists some segmentation triggers delivered with Global Payroll for Spain as sample data:

Retroactivity Triggers

This table lists some retroactivity triggers delivered with Global Payroll for Spain as sample data:

Segmentation Triggers with Earning and Deduction Assignments

In Global Payroll you can define segmentation triggers only for effective dated records, with one exception: you can define segmentation triggers for the begin and end dated earning and deduction assignment record GP_PYE_OVRD. This exception enables you to assign an earning or deduction to a payee on the Element Assignment by Payee (GP_ED_PYE) or Payee Assignment by Element (GP_ED_ELEM) components, and segment (and prorate) the element when the assignment begin date comes after the pay period begin date, and/or the assignment end date comes before the period end date.

Global Payroll for Spain has set up the following earnings so that they are automatically segmented and prorated (using the proration factor defined on the earning definition pages) when the assignment period covers only a portion of the pay period:

If you want to set up additional earnings and deductions to trigger segmentation and proration when they are assigned to payees and the assignment period covers only a portion of the pay period, access the Trigger Definitions component and add these elements to the segmentation trigger definition for the GP_PYE_OVRD record.

In the case of deductions or non-basic earnings you also need to specify formula GEN FM SEGMNTCN as a post-process formula and a specify the proration to be used. Global Payroll for Spain delivers GEN PO DIAS SLICE that you can use or modify, or you can create a new one to fit your requirements.

See Also

Setting Up Triggers

Rounding Rules

When you resolve an element that is a numerical value, you often need to round the resulting value. You'll use rounding rules to do this.

Once you define a rounding rule element, apply it to other elements. The rounding rule can be applied to any component of an earning or deduction, to the resolved amount of an earning or deduction, or within a formula.

The following table describes the delivered rounding rules that Global Payroll for Spain as guidelines:

See Also

Calculating Taxes

Calculating Social Security Benefits

Defining Calculation Elements

Process Lists

Global Payroll for Spain delivers the following process lists:

Calculate IRPF percentage either as part of the normal payroll (in the GEN PR CALC NOM process list) or as a separate calculation (in the TAX PR CALC IRPF process list).

Setting Up Statutory Rates

To set up statutory rates, use the Statutory Rates ESP (GPES_STATUTORY) component.

This section provides an overview of statutory rates and discusses how to set up statutory rates.

See Also

Setting Up Statutory Severance Days

Understanding Statutory Rates

Global Payroll for Spain delivers statutory rates for the following:

• Minimum employee salaries.

• Interest charged on employee loans.

• Percentage of travel expenses and the dietas earning that are exempt from tax and social security.

These rates and are defined by the government. Global Payroll for Spain delivers and maintains these rates as system data.

Page Used to Set Up Statutory Rates

Setting Up Statutory Rates

Access the Statutory Rates page.

Daily Minimum Salary	Enter the minimum daily wage established by law.
Monthly Minimum Salary	Enter the minimum monthly wage established by law.
IPREM (Daily) (Indice Publico de Renta de Efectos Múltiples)	Enter a value used to calculate the daily wage that is exempt from taxes and social security contributions.
IPREM (Monthly) (Indice Publico de Renta de Efectos Múltiples)	Enter a value used to calculate the monthly wage that is exempt from taxes and social security contributions.
Statutory Interest	Enter the interest rate established by law. You can apply this interest rate or another rate to any employee loan. If you apply a lower rate, the difference is considered salary in kind.
Excess Pct. over IPREM (excess percentage over Indice Publico de Renta de Efectos Múltiples)	Enter the percent used to calculate the exempted amount for the public transportation complement, and for salary in-kind earnings.

See Also

Public Transportation and Distance Complement

Viewing Delivered Elements

Global Payroll for Spain some setup elements that you can customize to fit your business requirements. The following is a list of these setup elements:

• GEN VR TIPO AJ SAL

• AJN VR TAX PCT EST

• AJN VR TOLERANCIA

• CLI FM ANTIG DESDE

• CLI VR PRC DTO XTR

• CLI VR FNQ P PXTR

• CLI VR PD VLR PXTR

• SS VR TRATA MNSUAL

• CLI VR RED JORNADA

• CLI VR RECAIDA IT

• CLI VR RECAIDA AT

• CLI VR RECAIDA MAT

• CLI VR RECAIDA RE

• CLI VR ALTA DIRECC

• CLI VR FIJO SOB

• CLI VR VRBLE SOB

• CLI VR SPC SOB

• CLI FM CALC ING A

• CLI FM EST OTROS

• CLI VR EST FUTURO

• CLI VR EST ASIGN

• CLI VR EST ASG SOB

• CLI VR CORRECCION

• SS VR CONTR 7D FLG

• SS VR EPIG SECUND

Note. You can find more information about these setup elements in the context of their related business processes throughout the chapters of this PeopleBook.

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Spain. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.0 PeopleBook.

See Also

Understanding How to View Delivered Elements