Understanding Non-Basic Earnings

This chapter discusses:

Non-basic earnings.
Complements.
Non-salary earnings.
Salary in kind.
Processing non-basic earnings.
Viewing non-basic earning delivered elements.

Non-Basic Earnings

In Global Payroll for Spain, there are two types of earnings: basic earnings and non-basic earnings. Non-basic earnings are earnings that are paid infrequently, may be fixed or varied amounts, and may not be included in an employee’s annual income. The list of non-basic earnings includes complements, non-salary earnings, and salary in kind. Examples are pay for holiday work, reimbursements for business travel expenses, and special interest rates for loans.

See Also

Working with Loans and Advances

Defining Earning and Deduction Elements

Complements

This section discusses:

Complement earnings.
Work completed complements.
Company situation complements.

Complement Earnings

Complements complete the final gross pay for an employee or group of employees. They can be calculated as a flat amount or as a formula.

All of the complements discussed in this section are treated the same way during the payroll calculation process. They all accumulate their values to salary earnings, taxable base, and the employee's social security contribution base.

There are three types of complement earnings:

Personal conditions.
Work completed.
Company’s situation and results.

Global Payroll for Spain provides the complements listed below for positive input only. They are not mentioned in the labor agreement component and are not associated with any calculations. You must attach any calculation rules.

Note. Complements for personal conditions are considered basic earnings and are discussed in another chapter in this PeopleBook.

See Also

Complements

Work Completed Complements

Work completed complements are based on the special requirements of a particular job. Typical work complements include nighttime complements and toxicity or hazard complements.

Generally this type of compensation is a percentage of the salary base. Sometimes it can be calculated as a formula depending on the number of hours worked under those conditions. The elements used for this type of earning are variables.

The rules for nighttime, holiday, and toxicity or hazard complements are based on labor agreements and are subject to change. For example, a new labor agreement may enlarge the time frame of the nighttime complement.

Nighttime Complement

Work performed between the hours of 22:00 and 06:00 is considered nighttime work and must be compensated at a higher rate than normal.

Typically, the calculation rule for the nighttime complement is either a flat amount for each day worked in that timetable or a rate based on a regular hourly value.

For a flat amount, the number of days worked is multiplied by the flat amount defined in the labor agreement. For example, if the flat amount is 20 EUR and the number of late nights worked is four, then a total of 80 EUR is the nighttime complement.

Holiday Complement

If employees work during a holiday, they get some additional compensation. Labor agreements usually specify the amounts to be paid for working on Sundays or on holidays. You can calculate an employee's holiday complement by multiplying the special rate by the number of holidays worked.

Toxicity or Hazard Complement

An employee who works with hazardous or toxic materials, or who has a dangerous job gets a hazard complement. The details of the hazard complement are in the labor agreement.

Only the actual days worked in these conditions are paid with this complement.

The calculation rule for the hazard complement element is similar to the nighttime complement - either a Flat amount or the Base time Percentage formula applies.

Note. Global Payroll for Spain delivers these work completed complements (such as the nighttime, holiday, and toxicity or hazard complements) as sample data. Enter the value as positive input for every period. You can also modify the calculation rules to fit your company’s needs.

Company Situation Complements

Company situation complements are typically related to company profits and incentives and are more subjective than other complements. Sometimes, a labor agreement details these complements for a company's general objectives. Other times, these complements are addressed in a company or employee contract.

The values of these complements are variable and are currently entered into the system by positive input.

Profit Participants Complement

This complement depends on the company's earnings results. It can be defined annually or monthly, for example, depending on the company.

Incentives Complement

The incentive policy must be defined at the beginning of the period that the company considers a measure to appoint different milestones.

The complement can be defined as a total amount when the whole objective is achieved.

For example, a company's goal is to produce 10 million screws within a defined time period. The production of 10 million screws would grant the entire incentive complement. No incentive complement is supplied for missing the production goal.

It can also be defined as a percentage dependent upon the grade of achievement.

In our example, let's say that the incentive complement is in direct proportion to the number of screws produced. The production of 9 million screws would yield 90 percent of the incentive complement.

You must manually record the incentive amounts into the system using positive input.

Non-Salary Earnings

This section discusses:

Non-salary earning calculation.
Travel expense earnings.
Dietas earnings.

Non-Salary Earning Calculation

Non-salary earnings are exempt from taxes and social security contributions in certain situations. Because of this, the system handles non-salary earnings differently, depending on their amounts.

Each earning has a statutory maximum daily amount exempt from tax and social security contributions, which varies by fiscal territory. Update these rates using the Fiscal Territories component.

See Calculating Taxes.

Any reimbursement over the statutory maximum is subject to taxes and social security contributions. Likewise, the entire amount must be accumulated over total earnings, but only the amounts in excess of the statutory maximum must be accumulated over the taxable and social security base.

These earnings are calculated by entering the number of days and the total amount of the complement in the amount through positive input.

As a result of the calculation, Global Payroll for Spain provides three different elements for every non-salary earning:

One earning: Represents the total amount that the employee receives.
One earning (the name includes the letters EX): Represents the amount that exceeds the maximum taxable exempted.
One deduction (the name includes the letter EXX): Represents the amount that exceeds the maximum taxable exempted.

Setting Up Statutory Rates

Travel Expense Earnings

Travel expenses are compensations for trips, displacements, and general traveling expenses. Global Payroll for Spain delivers a mileage earning and accounts for its tax and social security deductions in excess of the statutory rate.

Dietas Earnings

Dietas is compensation that reimburses expenses resulting from business trips. They include these delivered earnings:

DIETA EXP (expatriate traveling maintenance).
DIETA INT (international traveling maintenance).
DIETA LCL (domestic traveling maintenance).
PRNCTA EXP (expatriate overnight stay).
PRNCTA INT (international overnight stay).
PRNCTA LCL (domestic overnight stay).

Reviewing and Updating System Information

Salary in Kind

Salary in kind are goods or services provided for the employee at a rate lower than the market price. Global Payroll for Spain delivers a low interest loan benefit and life insurance as not passed on, and company car as passed on.

Salary in kind for an employee can contribute 100 percent to the social security bases and taxable income or can contribute to the social security bases and taxable income partially. To know if the salary in kind is exempt or not, it is necessary to compare the sum of all the earnings considered as salary in kind to 20 percent of the IPREM (Indicador Público de Renta de Efectos Múltiples), which is a statutory rate published by the government each year. If the sum of all the earnings doesn't exceed 20 percent of the professional minimum salary, not all of the salary in kind will contribute to the social security bases and taxable income. If there is an excess over that 20 percent, this amount should be added to the contributing earnings and taxable income. In the case where more than one earning is being considered salary in kind, you will have to calculate the individual excess for each earning in proportion to its value.

The different types of salary in kind earnings include housing loans with an interest rate below the legal interest rate, cars, insurance contributions, and contributions to pension plans, for example.

The withholdings for salary in kind can be paid by the employer (withholdings in kind not passed on) or by the employee (withholdings in kind passed on). If it is passed on, the withholding will be discounted in the payroll for the employee as a tax deduction (deduction in kind). If it is not passed on, the employer will pay the deduction to the tax institution.

Note. The tax percentage to be applied over the non-exempted amount will be the same as the IRPF tax percentage.

See Also

Working with Loans and Advances

Processing Non-Basic Earnings

Non-basic earnings are contained in three sections:

GEN SE DEV VARBL:

Includes complements, such as nighttime complements, holiday complements, toxicity or hazard complements, overtime, profit participants complements, and incentive complements.
GEN SE DEV OTROS:

Includes dietas, overnight stay, and mileage earnings and salary in kind.
AYP SE DEDUCCIONES:

Includes loans and advances.

All of these earnings are included in the payroll calculation (GEN PR CALC NOM) but not in the extra period calculation (XTR PR PAGA EXTRA) because they are not paid as part of an extra period processing.

Note. Basic earnings and various other complements are included in a section called GEN SE DEV BASICOS.

Paying Overtime

Defining Earning and Deduction Elements

Viewing Non-Basic Earning Delivered Elements

This section discusses:

Delivered non-basic earnings.
Delivered deductions.
Delivered accumulators for non-basic earnings.

Delivered Non-Basic Earnings

This table lists the elements for non-basic earnings:

Earning Element	Description
COCHE CIA	Company car. Use this earning to enter the monetary value of a company car.
DEV ADELANTO	Salary advance. Contains the amount to be paid to the employee as advance payment, which the employee must pay back through later payrolls. Custom field 5 contains the label DEV ADLNTO. Only processed for the last segment in the period. No retro calculation.
DEV PRESTAMO	Loan. Value assigned through the Request Advances/Loans component (Global Payroll & Absence Mgmt, Payee Data, Loans, Request Advances/Loans ESP).
DIETA EXPTR	Expatriates Maintenance: Value assigned by positive input. Units must be specified for the number of days and the total amount.
DIETA INT	International maintenance: Value assigned by positive input. Units must be specified for the number of days and the total amount.
DIETA LCL	Domestic maintenance: Value assigned by positive input. Units must be specified for the number of days and the total amount.
DIETAEX EXPT	Expatriate maintenance taxable excess: Customer field 5 contains the label DIETAEX EXP.
DIETAEX INT	International maintenance taxable excess: Customer field 5 contains the label DIETAEX INT.
DIETAEX LCL	Domestic maintenance taxable excess: Customer field 5 contains the label DIETAEX LCL.
FESTIVIDAD	Holiday complement: Value assigned by positive input. This element is automatically segmented and prorated when it is assigned to a payee on the Element Assignment by Payee or Payee Assignment by Element pages and the assignment period covers only a portion of the pay period. See Segmentation Triggers with Earning and Deduction Assignments. See Proration and Segmentation.
GASTOS BECAS	Scholarship holder expenses earning related to scholarship holders.
INCENTIVOS	Incentives complement: Value assigned by positive input. This element is automatically segmented and prorated when it is assigned to a payee on the Element Assignment by Payee or Payee Assignment by Element pages and the assignment period covers only a portion of the pay period. See Segmentation Triggers with Earning and Deduction Assignments. See Proration and Segmentation.
KILOMETRAJE	Mileage: Value assigned by positive input. Units must be specified for the number of miles and the total amount.
KLMTRJEEX	Mileage taxable excess: Customer field 5 contains the label KLMTRJEEX.
NOCTURNIDAD	Nighttime complement: Value assigned by positive input. This element is automatically segmented and prorated when it is assigned to a payee on the Element Assignment by Payee or Payee Assignment by Element pages and the assignment period covers only a portion of the pay period. See Segmentation Triggers with Earning and Deduction Assignments. See Proration and Segmentation.
PRNCTA EXPTR	Expatriate overnight stay: Value assigned by positive input. Units must be specified for the number of days and the total amount.
PRNCTA INT	International overnight stay: Value assigned by positive input. Units must be specified for the number of days and the total amount.
PRNCTA LCL	Domestic overnight stay: Value assigned by positive input. Units must be specified for the number of days and the total amount.
PRNCTAEX EXP	Expatriate overnight stay excess: Customer field 5 contains the label PRNCTAEX EXP.
PRNCTAEX INT	International overnight stay taxable excess: Customer field 5 contains label PRNCTAEX INT.
PRNCTAEX LCL	Domestic overnight stay excess: Customer field 5 contains the label PRNCTAEX LCL.
PRSTMO EX	In Kind loan taxable excess: Customer field 5 contains the label PRSTMO EX.
PRTCPCN BEN	Profit participation compliment: Value assigned by positive input. This element is automatically segmented and prorated when it is assigned to a payee on the Element Assignment by Payee or Payee Assignment by Element pages and the assignment period covers only a portion of the pay period. See Segmentation Triggers with Earning and Deduction Assignments. See Proration and Segmentation.
RDTO IRREGUL	Irregular income.
RDTO IRR 50	Irregular income affected by 50% reduction. This earning corresponds to income accrued in more than five years.
RDTO IRR 50D	Irregular income affected by 50% reduction. This earning is used in the Navarra historical territory. It corresponds to income that has been derived from disability benefits.
RDTO IRR 70	Irregular income affected by 70% reduction. This earning is used in the Navarra historical territory. It corresponds to income that has been derived from death benefits.
SEGURO VIDA	Life insurance. Value assigned by positive input or Eearning and deduction assignment.
TOXICIDAD	Toxicity or hazard complement: Value assigned by positive input. This element is automatically segmented and prorated when it is assigned to a payee on the Element Assignment by Payee or Payee Assignment by Element pages and the assignment period covers only a portion of the pay period. See Segmentation Triggers with Earning and Deduction Assignments. See Proration and Segmentation.

See Also

Viewing Delivered Tax Elements

Delivered Deductions

This table lists the deduction elements:

Deduction Element	Description
DIETAEXX EXP	Expatriate maintenance taxable excess: Value assigned by EX FM EXCESO CALC as an offset of DIETAEX EXP.
DIETAEXX INT	International maintenance taxable excess: Value assigned by EX FM EXCESO CALC as an offset of DIETAEX INT.
DIETAEXX LCL	Domestic maintenance taxable excess: Value assigned by EX FM EXCESO CALC as an offset of DIETAEX LCL.
KLMTRJEEXX	Mileage taxable excess: Value assigned by EX FM EXCESO CALC as an offset of KLMTRJEEX.
PRNCTAEXXINT	International overnight stay taxable excess: Value assigned by EX FM EXCESO CALC as an offset of PRNCTAEX INT.
PRNCTAEXXLCL	Domestic overnight stay taxable excess: Value assigned by EX FM EXCESO CALC as an offset of PRNCTAEX LCL.
PRNTAEXX EXP	Expatriate overnight stay taxable excess: Value assigned by EX FM EXCESO CALC as an offset of PRNCTAEX EXP.
PRSTMO EXX	In kind loan taxable excess: Value assigned by EX FM EXCESO CALC as an offset of PRSTMO EX.

Delivered Accumulators for Non-Basic Earnings

When you create a new non-basic earning, it is important to define the accumulators to which the earning contributes. Delivered non-basic earnings contribute to these accumulators:

GEN AC DEV VRBLS S
SS AC BSE M S

When you create a new non-basic earning, you need to include it in the following customary accumulators:

Functional Category	Accumulator Name	Description
Compensation	CLI AC SAL BRUTO	Custom gross salary.
Taxes	CLI AC ING VR1 S CLI AC ING VR2 S CLI AC ING VR3 S	Custom variable taxable base. Add elements here that correspond to variable or non-regular variable compensation that pay taxes. Select the right accumulator based on the method that you want to use for an earning when calculation the estimated tax base.
Taxes	CLI AC RDTO IRREG CLI AC RDTO IRR50 CLI AC RDTO IRR50D CLI AC RDTO IRR70D	Custom non-regular income. Add elements here that correspond to employee compensation accrued later than two years ago. Select the correct accumulator depending on the reduction percentage that applies to the specific earning (40%, 50%, or 70%).
Taxes	CLI AC ING SPC REP	Employee taxable in kind salary. Add elements here that correspond to employee salary in kind whose taxable part is going to be paid by the employee.
Taxes	CLI AC ING SPC NRE	Taxable in kind salary. Add elements here that correspond to the employee salary in kind whose taxable part is going to be paid by the employer. Note. You will add the non-basic earning to only one of these tax-related accumulators, not all of them.
Social security	CLI AC BASE SS M	Social security monthly base.

Note. 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.