PeopleSoft Enterprise Payroll for North America 9.1 PeopleBook

Defining Earnings Codes and Earnings Programs

This chapter provides overviews of earnings tables, and tax specification and discusses how to:

Establish earnings codes.
Establish earnings programs.

Understanding Earnings Tables

This section lists prerequisites and common elements and discusses earnings tables.

Prerequisites

Before you begin setting up earnings:

Read through the sections that tell you how to set up the Company table, Earnings table, Special Accumulator table, Shift table, and Pay Group table.
Map out how you want to define and segregate earnings, special accumulators, and shifts within the system.

Note. When you define earnings codes, you must define several basic earnings codes on the Pay Group Table - Calc Parameters (Pay Group table - Calculation Parameters) page.

See Also

Entering Company Information

Setting Up Pay Groups

Establishing Special Accumulator Codes

Understanding Shift Pay Calculation Methods

Setting Up the Shift Table

Common Elements Used in This Chapter

Override Limit Amount

Enter a value by which to limit the amount to pay if the regular payout amount exceeds the amount specified for an earnings code.

Frequency

Specify how to express the compensation rate: Hourly, Daily, Monthly, Annually, and so on.

Maintain frequencies on the Frequency Table page.

Earnings Tables

The system calculates earnings based on information that you enter in the Company table, Earnings table, Special Accumulator table, Shift table, and Pay Group table.

The Earnings table is the basis for calculating and taxing earnings, although some of the information in the table depends on special accumulator codes and shift information. In the Earnings table, you define how to tax, calculate, and adjust each type of earnings (such as regular, overtime, and sick). You also define how earnings types affect other balances, such as leave accruals. Use the Special Accumulator table to accumulate earnings to use later in deduction calculations, such as a savings deduction based on a percentage of regular and overtime pay only. The Shift table works in conjunction with the Earnings table to calculate shift premiums.

Note. The information that you define in the Earnings table affects several fields on paysheets: regular hours, overtime hours, regular earnings, and additional earnings, and tax methods. You can override most of this data on the paysheet, depending on how you define it in the Earnings table.

Understanding Tax Specification

It is important to understand how taxes work when specifying special tax options and tax methods for earnings codes.

This section discusses:

(USA) U.S. tax specification.
(CAN) Canadian tax specification.

(USA) U.S. Tax Specification

To better understand how the U.S. tax options work, consider how you might define the following earnings codes:

Earnings Code	Federal Withholding Tax (FWT)	Federal Unemployment Tax (FUT)	Federal Insurance Contributions Act (FICA)
Regular	Tax	Tax	Tax
Overtime	Tax	Tax	Tax
Injury Pay	Tax	No Tax	Tax
Expense Reimbursement	No Tax	No Tax	No Tax
Disability Payment	Tax	No Tax	No Tax

Select the Subject to FWT (subject to federal withholding tax), Subject to FUT (subject to federal unemployment tax), and Subject to FICA (subject to Federal Insurance Contributions Act) check boxes (on the Earnings Table - Taxes page) for all earnings to add to the taxable gross for the specific tax. These settings enable the system to determine exactly how much of an employee's pay is subject to federal taxes.

(CAN) Canadian Tax Specification

To better understand how to tax different earnings codes, consider how you might define the following earnings at Viceroy Northern Bank:

Earnings Code	Canadian Income Taxes (CIT)	True T4	Canada Pension Plan (CPP)	Employment Insurance (EI) Earn	EI Hrs
Regular	Tax	Yes	Tax	Tax	Yes
Overtime	Tax	Yes	Tax	Tax	Yes
Shift Premium	Tax	Yes	Tax	Tax	No
Expense Reimbursement	No Tax	No	No Tax	No Tax	No
Retiring Allowance	Tax	No	No Tax	No Tax	No

Earnings Code	Quebec Income Taxes (QIT)	True RL	Quebec Pension Plan (QPP)	Payroll Tax	T4A	RL-2	Quebec Parental Insurance Plan (QPIP)
Regular	Tax	Yes	Tax	Tax	No Tax	No Tax	Tax
Overtime	Tax	Yes	Tax	Tax	No Tax	No Tax	Tax
Shift Premium	Tax	Yes	Tax	Tax	No Tax	No Tax	Tax
Expense Reimbursement	No Tax	No	No Tax	No Tax	No Tax	No Tax	No Tax
Retiring Allowance	Tax	No	No Tax	Tax	Tax	Tax	No Tax

Select the tax option check boxes (on the Earnings Table - Taxes page) for earnings types to tax or accumulate. These settings enable the system to determine how much of an employee's pay is subject to different tax types:

Earnings Code	Amount	CIT	True T4	CPP	EI Earn	EI Hrs
Regular	1000	1000	1000	1000	1000	40
Overtime	200	200	200	200	200	10
Shift Premium	100	100	100	100	100
Injury Pay	200	200	200	200
Expense Reimbursement	1000
Retiring Allowance	500
Total	3000	1500	1500	1500	1300	50

Earnings Code	Amount	QIT	True RL	QPP	T4A	RL-2	Payroll Tax	QPIP
Regular	1000	1000	1000	1000			1000	1000
Overtime	200	200	200	200			200	200
Shift Premium	100	100	100	100			100	100
Injury Pay	200	200	200	200			200
Expense Reimbursement	1000
Retiring Allowance	500				500	500.00
Total		1500	1500	1500	500	500.00	150	1300

See Also

Defining Deductions

(USA) Updating the Taxable Gross Definition Table

Maintaining Payroll Data

(CAN) Canadian Tax Method Calculations

Establishing Earnings Codes

To set up earnings codes, use the Earnings Table (EARNINGS_TABLE) component.

This section provides an overview of earnings codes and discusses how to:

Define parameters and rules for calculating earnings.
(USA) Setting up the Earnings table for FLSA calculations.
Enter special options and tax methods for earnings codes.
(USF) Specify additional earnings.
Specify calculation rules.
Define how earnings codes affect leave accruals and special accumulators.
(USF) Specify pay limit processing.

Understanding Earnings Codes

Determine the different types of earnings that your organization requires, and decide which three-character earnings code to assign to each one (such as REG, VAC, and HOL).

At a minimum, you must define earnings codes for regular and overtime pay. You might also define earnings codes for sick pay, holiday pay, vacation pay, or company-specific functions, such as:

Regular earnings that are normally associated with a regular salary or regular hours worked.

Regular earnings that are typically taxed by all taxing entities and consist of a simple rate-multiplied-by-time calculation, or a flat amount.
Earnings that use a slightly different method of calculation.

For example, overtime, double-time, or triple-time earnings codes apply a multiplication factor to the earnings.
Earnings to handle accrual accounting.

To track holidays, vacation and sick leave, jury duty, personal time off, and so on for leave accruals, define earnings codes for these leave categories and report applicable hours.
Nonhour-related earnings, such as bonuses, commissions, or automobile allowances.
Differentiation between earnings that should or should not be taxed, such as automobile allowances or expense advances.
Earnings for accumulation of hours and dollars in other special accumulator balances.

For example, certain earnings are eligible for retirement programs, while other earnings are not.
Earnings resulting from late paperwork or collective bargaining to calculate through the Retroactive Pay Calculations COBOL SQL process (PSPRPEXT).
Earnings codes for paying retro pay earnings.

Important! Oracle delivers two earnings codes, $AC and $NA, that the system uses during retro pay processing. You will never explicitly reference these codes, nor will you see them referenced on any pages outside of the Earnings Table component, but they are critical to the retro pay process. Do not modify, remove, or inactivate either of these earnings codes.

Using a Worksheet to Map Earnings Codes

We suggest that you create a worksheet to map out your needs. For example:

Earnings Type	Earnings Code	Earnings Profile	Tax Method	Other Considerations
Regular	REG	Add to gross pay	Annualized	Adds to leave accruals Savings plan accumulators
Vacation	VAC	Add to gross pay shift differential	Annualized	Subtracts from leave accruals
Sick	SCK	Add to gross pay shift differential	Annualized	Subtracts from leave accruals
Holiday	HOL	Add to gross pay shift differential	Annualized	Statutory
Bonus	BON	Add to gross pay	(USA) Supplemental (or Special Supplemental in California) (CAN) Bonus

Pages Used to Establish Earnings Codes

Page Name	Definition Name	Navigation	Usage
Earnings Table - General	EARNINGS_TABLE1	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, General	Define parameters and rules for calculating earnings. Also specify the effects on Fair Labor Standards Act (FLSA) regular rate calculations, and define retro pay processing options.
Earnings Table - Taxes	EARNINGS_TABLE2	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Taxes	Enter special options and tax methods for earnings codes.
Additional Earnings	GVT_EARNINGS_SEC	Click the Federal button on the Earnings Table - Taxes page.	(USF) Specify additional earnings code settings.
Earnings Table - Calculation	EARNINGS_TABLE3	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Calculation	Specify whether an earnings code is based on other earnings and define special earnings calculation formats that control how the pay calculation handles the earnings code and what results the earnings code produces.
Earnings Table - Special Process	EARNINGS_TABLE4	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Special Process	Define how earnings codes affect leave accruals and special accumulators.
Pay Limit	GVT_EARNINGS_TBL5	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Pay Limit	(USF) Select the corresponding earning process type to include the earnings code in pay limit calculations.
Earnings Report	PRCSRUNCNTL	Set Up HRMS, Product Related, Payroll for North America, Comp/Earnings Table Reports, Earnings, Earnings Report	Generate PAY712, which is a report that lists earnings types and their payroll characteristics.

Defining Parameters and Rules for Calculating Earnings

Access the Earnings Table - General page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, General).

Short Description

Enter a meaningful name that your employees recognize. The check printing processes print this name on payslips.

Allowable Employee Types

The paysheet uses allowable employee types to determine which employees are eligible for this earnings code.

Payment Type

Use this group box to specify the types of payment information that you can enter on an employee's paysheet for this earnings code.

Unit/Override Rate

When you select this option, a blank field appears where you enter the new rate, which the system uses to calculate the earnings amount. This overrides the hourly rate in the employee's Job record. You must enter the number of units, or hours worked, in the Hours field on the paysheet, but you do not need to change the hourly rate on the paysheet. You can use earnings codes based on the unit or override rate for piecework earnings.

For example, you pay 2 USD for each door that an employee fastens on a new vehicle. You define an earnings code, ASM, and enter 2 in the Unit/Override Rate field. During the first pay period, an employee fastens 428 doors. On the employee's paysheet, you insert an Other Earnings entry with the code ASM and enter 428 in the Hours field. The system calculates the earnings as 2 USD × 428, or 856 USD.

If you set up an earnings code for shift pay that uses the unit/override rate and is based on a single earnings code, you must ensure that you include the shift earnings code on each payline that contains the earnings on which it is based. For example, if the shift earnings is based on the REG earnings, and if you add an additional REG payline to the paysheet, you must manually add the shift earnings code to that payline as well.

Flat Amount

When you select this option, a blank field appears where you enter the flat amount. The system uses the flat amount from the Earnings table instead of the rate in the employee's Job record.

To give multiple employees a flat amount of additional pay, make blanket changes to the flat amount in the Earnings table instead of maintaining multiple Additional Pay records at the employee level.

(USA) Effect on FLSA

Specify the effect on the FLSA rate calculation.

Note. You must also assign each earnings code to an FLSA category of regular, overtime, or excluded on the Earnings Table - Calculation page.

See (USA) FLSA and Alternative Overtime Calculations.

Note. Effect on FLSA is also used when setting up earnings codes for tip allocation and for the calculation of Oregon's Workman's compensation.

See Setting Up for FLSA Calculation.

See Maintaining Payroll Data.

Eligible for Retro Pay

Eligible For Retro Pay	Select this check box if payees can receive retro pay for the earnings code. Selecting this check box enables you to include the earnings code in a retro pay program.
Used to Pay Retro	Select this check box if the earnings code is used to pay retroactive earnings. Selecting this check box enables you to associate this earnings code with a retro-eligible earnings code when you set up a retro pay program.

See Setting Up Retro Pay Processing.

Additional Page Elements

Hours Distribution

Select this check box to distribute standard hours to a nonregular earnings code according to the parameters on the Job Data - Earnings Distribution page. This check box controls the distribution of standard hours to nonregular earnings codes for salaried employees whose job earnings distribution type is either by amount or by percent. The distributed hours are based on a proration of the employee's total standard hours defined in the Job Data component (JOB_DATA).

These hours appear on Paycheck Inquiry pages and in the payroll registers. Note, however, that hours are not displayed on paychecks for salaried employees.

The system automatically processes and displays the distribution of standard hours to the regular earnings code, regardless of the hours distribution setting.

Note. For earnings codes with a payment type of amounts only or flat amount, deselect the Hours Distribution check box. These payment types do not calculate or display hours.

For example, a salaried employee has 80 standard hours per biweekly pay period. The job earnings distribution information specifies a 50 percent distribution to a regular earnings code (REG) and a 50 percent distribution to a nonregular earnings code (STD). The STD earnings code has a payment type of Either Hours or Amounts OK.

If the Hours Distribution check box for the STD earnings code is not selected, 40 hours are associated with the REG earnings code, and blank hours are associated with the STD earnings code.
If the Hours Distribution check box for the STD earnings code is selected, 40 hours are associated with the REG earnings code, and 40 hours are associated with the STD earnings code.

Note. (CAN) To accumulate the hours that are distributed to nonregular earnings codes and report them as EI hours, you must select the Hours Distribution check box for those earnings codes. The system sets a salaried employee's EI hours to zero if none of the earnings codes on that employee's job earnings distribution page specify hours distribution. To maintain the integrity of EI hours processing and reporting, ensure that you correctly define the hours distribution definitions that are associated with each earnings code.

(E&G, CAN) Administrative Stipend Flag

Select this check box to indicate that this earnings code is an administrative stipend. The system uses this information, in conjunction with the Job Earnings Distribution table, to distribute administrative stipend earnings for the Statistics Canada Academic Teaching Survey.

(USA) Setting Up the Earnings Table for FLSA Calculations

Use the Earnings Table - General page and the Earnings Table - Calculation page to specify the earnings codes in the company that are affected by FLSA regulations, and to assign the earnings codes to FLSA categories. Only these two pages in the Earnings Table component (EARNINGS_TABLE) effect FLSA payment.

The following steps are required, but not necessarily in this order.

Complete the Earnings Table - General page.
Complete the Earnings Table - Calculation page.

Completing the Earnings Table - General Page

Use the Effect on FLSA (effect on Fair Labor Standards Act) group box to specify whether the hours and/or amount affect FLSA regular rate calculations. For regular pay, the calculation includes both hours and amount. For shift pay only, the calculation includes amount only, because the hours are already recorded in the regular pay.

Completing the Earnings Table - Calculation Page

Assign each earnings code to a FLSA category (regular, overtime, or excluded). If the FLSA category is overtime, the Regular Pay Included? check box becomes available for entry.

Select the Regular Pay Included? check box if the multiplication factor for the overtime earnings is greater than 1.0. This depends on the company's business rules. Some companies include all straight time pay with the overtime calculation, while other companies separate straight time pay from the premium portion of overtime.

Entering Special Options and Tax Methods for Earnings Codes

Access the Earnings Table - Taxes page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Taxes).

Earnings Information

(USF) Federal

Click this button to access the Additional Earnings page.

Payback Deduction Code

Use this field when setting up a payback earnings code to use for payback situations such as pay advance or negative adjustment. In this field, enter the payback deduction code that corresponds with the payback earnings code. If you enter a deduction code in this field, the system will automatically create an arrears balance assigned to that deduction code for the earnings amount that you enter with the corresponding payback earnings code on the paysheet.

See Setting Up and Processing Payback Deductions.

Tax Method

Use this group box to select the tax calculation method. For example, for a U.S. bonus earnings, select a supplemental option; for a Canadian bonus earnings, select the Bonus option.

Note. You can assign only one tax method to each earnings code. Multi-country employers must define separate earnings codes to apply country-specific tax methods.

Note. If you select a tax method other than Specified on Paysheet when you set up the earnings code on this page, you cannot override the tax method on paysheets—for all other tax methods, the system calculates according to the tax method selected on this page, even if you select a different method on the paysheet.

Before completing this group box, review the overview information about tax methods:

CAN:

See Understanding Canadian Tax Methods.
USA:

See (USA) U.S. Tax Methods and Calculations.

Annualized	Select this option to annualize the earnings, calculate tax on the annualized amount, and divide the tax by the number of pay periods in the year. The result is the withholding for the pay period. This is the most common tax method.
Cumulative	(USA) Select this option to add together the YTD earnings and the earnings for this pay period, annualize the result, and calculate the annualized tax. The system de-annualizes the tax by dividing it by the number of tax periods on the paysheet. If the result is greater than the YTD withholding, the difference becomes the withholding for the pay period. Use this option for employees whose wages vary significantly from pay period to pay period, such as salespeople on commission.
Specified on Paysheet	Select this option to instruct the system to use the tax method specified on the paysheet. The default method on the paysheet is annualized, which you can override on the paysheet if you set up the earnings code's tax method as Specified on Paysheet. Note. If you select a tax method other than Specified on Paysheet when you set up the earnings code on this page, you cannot override the tax method on system generated paysheets—the system calculates according to the tax method selected on this page. However, if you add a payline manually to a system generated paysheet, you can select any tax method.
(USA) Supplemental	Select this option for earnings codes that identify supplemental wages. Do not use it for bonus and stock option payments if you have employees in California. Indicate whether supplemental wages are paid with regular pay or as separate pay on the Federal/State Tax Table - General page. Note. Set up a special accumulator for supplemental payments and associate it with all earnings codes that you designate for supplemental or special supplemental tax method. See (USA) U.S. Tax Methods and Calculations.
(USA) Special Supplemental	Select this option for bonus and stock option payments if you have employees in California. These payments in California are subject to a higher supplemental withholding rate than other types of supplemental wage payments such as commissions and overtime pay. If you have employees in California and other states, use the Special Supplemental option. When you use this option to pay bonuses to an employee not in California, the system automatically calculates the tax using the supplemental method. This enables you to set up one bonus earnings code for all U.S. employees.
(CAN) Bonus	Select this option to calculate taxes on irregular payments, such as bonus payments. The system calculates tax differently, depending on whether the payment is included with other earnings or paid in a separate check.
(CAN) Commission	Select this option to use amounts from the Commission group box (Income, Expenses, and RPP/RRSP Limit [Registered Pension Plan/Registered Retirement Savings Plan limit] fields) on the Canadian Income Tax Data page and the Quebec Income Tax Data page. If these amounts are not entered, the system calculates tax using the annualized tax method, resulting in a higher amount of tax withheld. The commission tax method calculates the taxes on commissions differently, depending upon whether you are calculating CIT or QIT. Note. Commission income and expenses amounts from the Canadian Income Tax Data page and the Quebec Income Tax Data page represent the total annual estimated earnings and expenses reported by employees on the Revenue Canada Statement of Remuneration and Expenses and Revenue Quebec Statement of Commissions and Expenses for source deduction purposes.
(CAN) Lump Sum	Select this option to determine the withholding for the period using the corresponding taxable gross rates from the Federal CIT Lump-Sum Rates group box or the Quebec (QIT) Lump-Sum Rates group box on the Tax Rates, Credits and Other page.

(USA) U.S. Only

Before completing this group box, review the overview information about U.S. Taxes.

See (USA) U.S. Tax Specification.

Subject to FWT (subject to federal withholding tax), Subject to FICA (subject to Federal Insurance Contributions Act), and Subject to FUT (subject to federal unemployment tax)	Specify the effect that the earnings code has on the corresponding taxable grosses. The system maintains separate accumulators for each of the taxable grosses. Note. A Taxable Gross Definition Table entry is always required when you want to stop state or local income tax withholding on a particular earnings, regardless of whether or not the state or locality follows the federal rule for including the amount in taxable income, and regardless of whether or not you have selected this check box for the earnings. See (USA) Updating the Taxable Gross Definition Table.
Withhold FWT (withhold federal withholding tax)	This check box is selected by default, indicating that the earnings code is subject to federal income tax withholding. If you deselect this check box, you can still add to the earnings to the taxable gross, but withholding isn't taken for this earnings code. For example, tuition reimbursement is an earnings code that adds to taxable gross, but is not subject to withholding. Normally, this check box should be selected to prevent underwithholding. Most earnings are taxable for FWT, FICA, and FUT, but deselect these check boxes for nontaxable earnings codes (such as expense reimbursements and salary advances). Note. For states and localities, use the Taxable Gross Definition table to specify whether withholding on a taxable gross component follows the rule that you select here. Regardless of federal withholding, you must have a taxable gross component ID for any earnings code for which you do not withhold state or local income tax.
Taxable Gross Component ID	Payroll for North America normally sets the taxable gross used for calculating state and local income tax withholding to the same value as the taxable gross for federal withholding. It also sets the taxable gross for state unemployment and disability to the same value as the taxable gross for federal unemployment. However, some states and localities don't follow federal rules for the taxability of all types of wages. Select a value to override the federal rules for taxability: 125, 401K, GTL (group-term life), or TIP. The taxable gross component ID code defines a taxable gross base—different from federal—to use when calculating state and local taxes. This code points to information in the Taxable Gross Definition table, which: Indicates which federal taxable gross level (such as FWT, FUT, or FICA) is used as a base for state and local taxable gross. Specifies how to add to, or subtract from, the state and local base when it differs from the federal definition. PeopleSoft maintains state and local taxable grosses that have been adjusted for 401(k), Thrift Savings Plan, Section 125, group life plans, and Federal Employee Group Life Insurance (FEGLI) plans. You can add entries to the Taxable Gross Definition table for other types of earnings that need adjusting. PeopleSoft also maintains a taxable gross definition called TIP for employers of tipped people. Important! The taxable gross component ID must be unique! If it is not unique, it can cause incorrect taxable grosses. Note. You must define a taxable gross component ID in the Taxable Gross Definition table before entering it in the Earnings table.
(E&G) Income Code (for 1042-S)	Specify a nonresident alien income code for 1042-S processing: 12: Royalties 15: Scholarship/Fellowship 16: Independent Personal Services 17: Dependent Personal Services 18: Teaching 19: Studying and Training 50: Other Income

Earnings

Add to Gross Pay	Select this check box to indicate that an employee receives actual dollars for this earnings code. Most, but not all, earnings add to gross pay. For example, some earnings don't actually consist of dollars paid, such as the value of a company-supplied automobile. Because the company supplies the employee with a car—not with the money to buy one—you do not add these earnings to the gross income. However, the value of the car must appear as taxable wages, and you must track it for the reporting on W-2 or T4. To define this auto earnings code, deselect the Add to Gross Pay check box, and select the appropriate U.S. or Canadian subject to tax check boxes. For an expense advance, however, select the Add to Gross Pay check box, but do not select a subject to tax check box.
Maintain Earnings Balances	Select this check box to automatically maintain YTD, quarter-to-date, and month-to-date earnings balances. Select this check box for all earnings codes.
Subtract from this Draw	This check box is for your information only.
Elig. for Shift Differential (eligible for shift differential)	Select this check box if the earnings code is for shift pay and you're using the pay group setID and Shift table method of calculating shift pay. If an employee is assigned to a shift, the system checks each earnings code that is eligible for shift differential and performs the calculation based on the routines selected in the Shift table and on the shift to which the employee is assigned. You can also specify shift differentials at the employee level. See Understanding Shift Pay Calculation Methods.
Hours Only (Reduce from Reg Pay)	Select this check box to have hours or earnings entered for the earnings code reduce the employee's regular pay by an equivalent number of hours entered on the paysheets. Use this check box for earnings codes such as holiday, sick leave, and vacation leave. Hours posted to the earnings code reduce regular hours for hourly employees (or regular earnings for salaried employees) by the number of hours entered during the payroll calculation run. How you use this check box depends on how you report time. You typically use positive time entry for hourly employees, so in effect their hours are already reduced. For example, you might enter 32 hours of regular pay and eight hours of vacation pay on an hourly employee's paysheet. For exception hourly and salaried employees, you typically enter only exception pay, but not regular pay. If a salaried employee takes eight hours off in a given week, you only enter eight hours of vacation time on paysheets. For different employee types, you can establish some earnings codes that use this feature and others that don't.
Subject to Garnishments	Select this check box to include the earnings code in garnishment processing.

(CAN) Canadian Only

Before completing this group box, review the overview information about Canadian taxes.

See (CAN) Canadian Tax Specification.

Warning! It is imperative that you define all earnings that are subject to CIT, T4A, QIT, and RL-2 withholding before they are paid to employees. To ensure that all amounts are allocated to the proper accumulators, you must complete this setup before running the first payroll of the new tax year.

Subject to CIT (subject to Canadian income tax), Subject to QIT (subject to Quebec income tax), Subject to CPP (subject to Canada Pension Plan (CPP)), and Subject to QPP (subject to Quebec Pension Plan)	Most earnings are taxable for CIT, EI, and CPP, but deselect these check boxes for nontaxable earnings (such as expense reimbursements, uniform allowances, auto reimbursements, and so on). If the company is in Quebec, most earnings also reflect QIT and QPP.
Subject EI Earn (subject to Employment Insurance earnings) and Subject EI Hrs (subject to Employment Insurance hours)	Select the Subject EI Earn check box if the amount that is associated with an earnings code is subject to EI premiums and insurability. Select the Subject EI Hrs check box if EI reporting requires the hours associated with an earnings code. This information is for the Record of Employment. When setting up earnings subject to EI, you must determine whether to accumulate both the dollars and hours, or just the dollars. To accommodate the accumulation of dollars, but not hours, the system segregates EI options by hours and earnings when multiple earnings codes representing the same hours (and subject to EI) are paid in conjunction with one another. This applies to premiums or differentials that are paid in conjunction with regularly paid work hours. For example, if you define shift premiums as earnings codes in the Earnings table, but pay them in conjunction with regular pay, use the following EI tax options: Regular pay: EI earnings (yes), EI hours (yes) Shift premiums: EI earnings (yes), EI hours (no)
Subject True T4	Select this check box if the earnings represent the accumulation of total federal employment income for Canada.
Subject True RL	Select this check box if the earnings represent the accumulation of total provincial employment income for Quebec.
Subject to T4A and Subject to RL-2	Specify whether the earnings are subject to T4A or RL-2 withholding. This ensures that the appropriate amount of tax appears on the T4A and RL-2 year-end slips. The system automatically selects the Subject to CIT check box (for T4A) or the Subject to QIT check box (for RL-2) when you save the record. Note. You must define earnings codes subject to T4A and RL-2 withholding in the T4A and RL-2 Tax Form Definition tables before running the year-end process for that tax year. You can reclassify the same earnings code between T4 and T4A (or RL-1 and RL-2) earnings before running payrolls in the new tax year. A mid-year reclassification of earnings, however, requires that you define a separate earnings code to allocate the earnings to the correct T4 and T4A (or RL-1 and RL-2) accumulators.
Subject to Payroll Tax	Select this check box if the earnings are subject to the Northwest Territories or Nunavut payroll tax. By default, the system calculates and withholds a 1 percent payroll tax on specified remuneration paid to employees for work performed in the Northwest Territories or Nunavut. A Northwest Territories or Nunavut employee whose total Northwest Territories or Nunavut earnings do not total more than 5,000 CAD for the calendar year are not subject to this tax. To stop the tax withholding for these exempt employees, select the Payroll Tax Exempt check box on the Canadian Income Tax Data page.
Subject to QPIP Earn (Subject to Quebec Parental Insurance Plan Earning)	Deselect the check box if the earnings is not subject to QPIP.

Note. Because the system maintains separate accumulators for each of these taxable grosses, consider each option individually when determining whether to select a check box.

See Also

Understanding Canadian Tax Methods

(CAN) Canadian Tax Specification

(USA) U.S. Tax Methods and Calculations

(USF) Specifying Additional Earnings

Access the Additional Earnings page (click the Federal button on the Earnings Table - Taxes page).

Addl Earning Control Settings

Adds to Other Pay	Select if the earnings adds to other pay in the employees Job - Compensation Data - Other Earnings page.
Adds to Pay Limit	Select if the earning code adds to pay limits calculations.
Adds to FEGLI Base Rate (adds to Federal Employee Group Life Insurance base rate)	Select if earnings add to FEGLI base rate calculation.
FMLA Flag (Family Medical Leave Act flag)	Select if the earning code is for the FMLA.
Federal Overtime Indicator	Select if the earnings code is used to pay federal overtime.
Add to Other Pay on SF50/52	Select if the earnings code adds to other pay on the SF50 or SF52.
FEFFLA Flag (Federal Employees Family Friendly Leave Act flag)	Select if this earning code is for the FEFFLA.

CPDF Earnings Report Type

CPDF Earns Type (Central Personnel Data File earnings type)

If additional earnings for this earnings code are reportable to the CPDF, select the CPDF earnings code: Not Rpted (not reported), Retn Allow (retention allowance), Staff Diff (staffing differential), or Suprv Diff (supervisory differential).

Leave Bank and Transfer Type

Leave Earnings Type

Select a value if you're defining an earnings code to use with a leave transfer program type. Valid values are:

Donate to Bank: For donor activity in Leave Bank Transfer programs.

Donate to Emergency: For donor activity in Emergency Leave Transfer programs.

Donate to Recipient: For donor activity in Voluntary Leave Transfer programs.

Receive from Bank: For recipient activity in Leave Bank or Emergency Leave Transfer programs.

Receive from Donor: For recipient activity in Voluntary Leave Transfer programs.

IRR Reporting Settings

IRR Reportable (Individual Retirement Record reportable)	Select this check box if additional earnings for this earnings code are associated with basic compensation and are IRR reportable.
Leave Without Pay	Select this check box if additional earnings for this earnings code are considered leave without pay on the IRR. These earnings are reported on the Leave Audit SF1150 report (FGSF1150).

See Also

Setting Up Leave Transfer Programs

Administering Pay Caps and Limits

Specifying Calculation Rules

Access the Earnings Table - Calculation page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Calculation).

Earnings Calc Sequence (earnings calculation sequence)

Enter a number to indicate the order in which to process earnings during payroll calculation. Lower sequence numbers result in a higher processing priority for the earnings code.

Sequence is important only if one earnings calculation is dependent on another. For example, regular earnings must have a lower sequence number than any earnings codes that reduce regular earnings (that is, earnings designated to have hours only reduced from regular pay).

Note. The default earnings calculation sequence is 500. To ensure that the system calculates regular pay first, change the earnings calculation sequence to 001.

For example:

Earnings for hourly employees = (pay rate or unit/override rate + shift rate + rate adjustment factor) × (hours + hours adjustment factor) × multiplication factor) + earnings adjustment factor

Earnings for salaried employees = earnings amount × multiplication factor

(USF) When a pay limit is reached and there is more than one earnings code included in the limit, the earnings code with the highest earnings calculation sequence is depleted before the next earnings code is reduced.

For example, if regular pay sequence is 001 and premium pay sequence is 500, the premium pay is depleted before regular pay is reduced.

Rate Adjustment Factor

Enter a dollar amount to adjust the hourly rate that is associated with an earnings code. For example, if a union negotiates a 0.30 USD per hour cost of living adjustment, enter 0.3 in this field for any applicable earnings, such as regular, overtime, vacation leave, and sick leave. Employees receiving these types of earnings get 0.30 USD per hour in addition to the compensation rate specified in their Job records.

Hours Adjustment Factor

Enter a positive or negative number to adjust the number of hours that are associated with an earnings code, such as 40 hours for regular. For example, Jan was a nurse at Diablo Hills Hospital where she was paid for a full 40-hour week. However, because she was required to record her lunch hours, her time cards showed that she worked only 37.5 hours a week—the actual number of hours that was entered on her paysheets. To set up this salary structure, enter an hours adjustment factor of 2.5.

Multiplication Factor

For hourly earnings, enter the number by which you multiply earnings, such as 1.5 for overtime, or 2.0 for double time. To calculate alternative overtime, the system uses the multiplication factor specified for the overtime earnings code on the Earnings table instead of the fixed 0.5 used in federal FLSA calculation.

Note. The use of negative multiplication factors in Alternative Overtime calculation will not work. Any multiplication factors other than the values needed to comply with Alternative Overtime regulations will result in incorrect calculations. A warning will be generated during batch processing in Payroll Error Messages if earnings codes are set up with negative multiplication factors.

See Multiplication Factors in FLSA Calculations.

Earnings Adjustment Factor

Enter a flat amount that does not affect pay rate or hours. Use this field for earnings codes for which the dollar amount always remains the same for all employees, such as a 100 CAD holiday bonus. When you define this type of earnings, set the multiplication factor to zero.

Maximum Hourly Rate

This field is for your information only.

Maximum Yearly Earnings

To set a yearly ceiling on the earnings code, enter the maximum yearly earnings. You cannot pay more than this amount to any employee in a year.

Note. Use this field with individual earnings codes only—not special accumulators.

Budget Effect

This field is for your information only.

(USA) Tips Category

Specify how tips affect taxable gross:

Not Tips: Select this value if the earnings code does not represent earnings subject to tipping or reported tips for calculating tip credit. This is the default value.

Reported Tips: Select this value if the earnings code represents cash or charge tips that your employees report.

Other Sys Calc'd Tips (other system calculated tips): Select this value if the earnings code represents amounts used to bring employee earnings up to minimum wage when the cash wage plus tips is less than minimum wage.

Tip Allocation: Select this value if the earnings code represents system-calculated amounts of tips allocated to employees.

Tip Credit: Select this value if the earnings code represents system-calculated amounts of tip credit.

Special Calculation Routine

Select this check box if you have modified the COBOL code to perform a calculation routine.

Note. Before you modify the COBOL code, discuss the proposed alterations with your PeopleSoft account executive.

Based on Other Earnings/Hours

Use this group box to designate earnings codes based on other earnings codes or special accumulators. The system can calculate earnings as a percentage of another earnings code, a rate multiplied by a single hour, or a rate multiplied by a group of hours. You might use this feature to keep shift earnings separate from regular earnings by creating a separate earnings code for shift earnings, based on a percentage of regular earnings.

Single Earnings and Special Accumulator

Select an option to indicate the type of other earnings on which the earnings code is based, and enter an earnings code or special accumulator code in the associated field.

Based on Employment Records

Select this check box to base the earnings on the specified earnings code or special accumulator for the employment record being processed. Deselect the check box when the earnings code is based on the combined earnings or special accumulator for all of an employee's jobs.

Based on Amount or Hours

Specify how to calculate earnings:

None: The default.

Amount: The system calculates the earnings by applying the multiplication factor to the current period amount for the earnings code or special accumulator code specified. For example, to calculate the earnings code that you're setting up as 4 percent of a specified earnings code, enter a multiplication factor of .04.

Hours: The system calculates the earnings by multiplying the current period hours for the specified earnings code or special accumulator code by the hourly rate on the paysheet entry. Then it applies the multiplication factor.

For example, to calculate a bonus earnings code as ten percent of the employee's regular pay, select the Single Earnings type option and enter the earnings code REG. Specify that the calculation is based on amount, and enter .1 as the multiplication factor.

(USA) Category for FLSA

Regular	Select this option if these earnings are not overtime and are used in the calculation of the FLSA rate.
Overtime and Regular Pay Included	Select this option if this earnings code has an effect on overtime or alternative overtime pay. When selected, the system displays a Regular Pay Included check box. If the multiplication factor for overtime is .9 or less, deselect this check box. If the multiplication factor is 1.1 or greater, select this check box.
Excluded	Select this option if these earnings have no effect on the FLSA calculation.

Allocating Tips

Setting Up for FLSA Calculation

Defining How Earnings Codes Affect Leave Accruals and Special Accumulators

Access the Earnings Table - Special Process page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Special Process).

Leave Plan Accrual(s)

Use this group box to indicate how the hours for each earnings code affect leave plans. Employees can accrue time using the number of hours they've worked (service hours) or the length of time they've worked for the company (based on the service date in the Job Data component). Set up the accrual method in the Leave Plan table in the Benefits component.

Add to Accrual Balance

Taken	Select this check box for earnings codes (such as vacation or sick) that subtract from the leave plan balance. The system updates the unprocessed data on the Leave Accruals page by adding to the leave plan balance for hours taken, but it does not update the hours taken from the actual leave plan balance until you run the leave accrual program.
Service Hours	Select this check box if the leave plan accrues based on the number of hours an employee has worked (service hours). The system adds the hours that are associated with the earnings code to an employee's service hours that are maintained on the leave plan accrual balances. However, if the employee is not enrolled in that leave plan, the system does not update the service hours fields in leave accruals. For example, suppose a company's employee leave plan offers 0.02 hours of vacation time for every hour of regular time and overtime that employees work. In this case, select the Service Hours check box for regular and overtime earnings codes to show that they add to the accrual balance for the employee leave plan. If Jan has 30 hours of regular and 10 hours of overtime earnings, the system adds 40 service hours to her leave plan. It also updates the leave accruals unprocessed data for her leave plan, and accrues 0.8 hours of vacation time when the leave accrual program is run. Note. If you base your leave plan on months of service, the leave accrual program does not use the service hours accumulated by payroll. Instead, it uses the service date in the Employee record to accrue hours for your leave plan.
Adjusted	Select this check box if you are defining the earnings code only to add hours to, or subtract hours from, an employee's accrual balances. When you perform the actual adjustments on paysheets, the system accepts positive or negative hours. For example, Jessica Morris, came to CCB from her former company with an intercompany transfer agreement. As part of the agreement, CCB let her carry over 25 hours of vacation time from her old company. To do this, the payroll clerk added 25 hours of accrual adjustment time to Jessica's paysheet. The system—looking at the Earnings table already set up for this type of situation (with Adjusted selected for the VAC leave plan type)—did the rest.
Bought and Sold	If your company has a vacation buy or sell plan, select a check box to indicate that the earnings code affects vacation hours bought or sold. Use deductions to handle the actual buying and selling and earnings codes to handle the accruals. For example, Theresa bought 20 hours of vacation time. The payroll clerk added the hours using an earnings code defined with the VAC leave plan type and the Bought check box selected. He used a deduction to take the money that Theresa used to buy the vacation time. If an employee sells vacation time, subtract from the accrual balance using an earnings code defined with the VAC leave plan type and the Sold check box selected. Use a negative deduction to give the employee the money.

Note. You must run the leave accrual program before the system recognizes or reports any leave accrual information that you define for your company and specific employees.

Special Accumulator(s)

Accumulator Code

Use special accumulators to roll together earnings codes to use later in deduction earning calculations or for tracking supplemental wages for tax purposes.

Before you enter this code, define the special accumulator code in the Special Accumulator table.

Effect

Select a value to designate how the earnings affects the special accumulator:

Adds to Special Balance: Adds to the special accumulator balance.
Subtracts from Special Balance: Subtracts from the special accumulator balance.
Adds TXGRS to Special Balance: Adds taxable gross to the special accumulator balance. Select this option for the special accumulator associated with supplemental earnings.

Supplemental Tax Calculations

Establishing Special Accumulator Codes

(USF) Specifying Pay Limit Processing

Access the Pay Limits page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Table, Pay Limit).

Earning Process Type

To include the earnings code in pay limit calculations, select the applicable process types:

Overtime: Overtime rate is subject to an overtime rate limit.

Pay Limit (pay limit - premium pay): Earnings are subject to a pay period limit.

Tot Annual (pay limit - total annual): Total annual earnings are subject to an annual pay limit.

See Also

Understanding Pay Caps and Limits

Establishing Earnings Programs

To set up earnings programs, use the Earnings Program Table (EARNS_PROGRAM_TBL) component.

This section provides an overview of earnings programs and discusses how to define earnings programs.

Understanding Earnings Programs

After you define earnings codes in the Earnings table, you must establish earnings programs in the Earnings Program table. An earnings program is a set of earnings codes that are valid for one or more pay groups. A single company can have any number of earnings programs. An individual employee can belong to only one program, and the earnings codes constituting that program are the only valid earnings codes for that employee.

To define an earnings program, you define valid earnings codes for the pay groups that use that program, and hence for the employees belonging to those pay groups. For example:

If executives don't get overtime pay, their pay group's earnings program doesn't include overtime as a valid earnings code.
You might exclude part-time employees who work fewer than 30 hours a week from certain benefits.

The earnings program that you enter on the Company - Default Settings page becomes the default earnings program for the pay groups that you define in the Pay Group Table component (PAYGROUP_TABLE). To override this default, specify a different earnings program for a pay group on the Pay Group Table - Calc Parameters page. You cannot override the pay group earnings program at the employee level. If Nancy belongs to a certain pay group, she must belong to that pay group's earnings program.

Pages Used to Establish Earnings Programs

Page Name	Definition Name	Navigation	Usage
Earnings Program Table	EARNS_PROGRAM_TBL	Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Program Table, Earnings Program Table	Define earnings programs for pay groups and the employees belonging to those groups.
Earnings Program Report	PRCSRUNCNTL	Set Up HRMS, Product Related, Payroll for North America, Comp/Earnings Table Reports, Earnings Program, Earnings Program Report	Run PAY717, which generates a report that lists information from the Earnings Program table.

Defining Earnings Programs

Access the Earnings Program Table page (Set Up HRMS, Product Related, Payroll for North America, Compensation and Earnings, Earnings Program Table, Earnings Program Table).

Earnings Code

Select each earnings code to include in the program. Insert additional rows if necessary.

Short Description	Enter a meaningful name that your employees recognize. The check printing processes print this name on payslips.
Allowable Employee Types	The paysheet uses allowable employee types to determine which employees are eligible for this earnings code.

Earnings Calc Sequence (earnings calculation sequence)	Enter a number to indicate the order in which to process earnings during payroll calculation. Lower sequence numbers result in a higher processing priority for the earnings code. Sequence is important only if one earnings calculation is dependent on another. For example, regular earnings must have a lower sequence number than any earnings codes that reduce regular earnings (that is, earnings designated to have hours only reduced from regular pay). Note. The default earnings calculation sequence is 500. To ensure that the system calculates regular pay first, change the earnings calculation sequence to 001. For example: Earnings for hourly employees = (pay rate or unit/override rate + shift rate + rate adjustment factor) × (hours + hours adjustment factor) × multiplication factor) + earnings adjustment factor Earnings for salaried employees = earnings amount × multiplication factor (USF) When a pay limit is reached and there is more than one earnings code included in the limit, the earnings code with the highest earnings calculation sequence is depleted before the next earnings code is reduced. For example, if regular pay sequence is 001 and premium pay sequence is 500, the premium pay is depleted before regular pay is reduced.
Rate Adjustment Factor	Enter a dollar amount to adjust the hourly rate that is associated with an earnings code. For example, if a union negotiates a 0.30 USD per hour cost of living adjustment, enter 0.3 in this field for any applicable earnings, such as regular, overtime, vacation leave, and sick leave. Employees receiving these types of earnings get 0.30 USD per hour in addition to the compensation rate specified in their Job records.
Hours Adjustment Factor	Enter a positive or negative number to adjust the number of hours that are associated with an earnings code, such as 40 hours for regular. For example, Jan was a nurse at Diablo Hills Hospital where she was paid for a full 40-hour week. However, because she was required to record her lunch hours, her time cards showed that she worked only 37.5 hours a week—the actual number of hours that was entered on her paysheets. To set up this salary structure, enter an hours adjustment factor of 2.5.
Multiplication Factor	For hourly earnings, enter the number by which you multiply earnings, such as 1.5 for overtime, or 2.0 for double time. To calculate alternative overtime, the system uses the multiplication factor specified for the overtime earnings code on the Earnings table instead of the fixed 0.5 used in federal FLSA calculation. Note. The use of negative multiplication factors in Alternative Overtime calculation will not work. Any multiplication factors other than the values needed to comply with Alternative Overtime regulations will result in incorrect calculations. A warning will be generated during batch processing in Payroll Error Messages if earnings codes are set up with negative multiplication factors. See Multiplication Factors in FLSA Calculations.
Earnings Adjustment Factor	Enter a flat amount that does not affect pay rate or hours. Use this field for earnings codes for which the dollar amount always remains the same for all employees, such as a 100 CAD holiday bonus. When you define this type of earnings, set the multiplication factor to zero.
Maximum Hourly Rate	This field is for your information only.
Maximum Yearly Earnings	To set a yearly ceiling on the earnings code, enter the maximum yearly earnings. You cannot pay more than this amount to any employee in a year. Note. Use this field with individual earnings codes only—not special accumulators.
Budget Effect	This field is for your information only.
(USA) Tips Category	Specify how tips affect taxable gross: Not Tips: Select this value if the earnings code does not represent earnings subject to tipping or reported tips for calculating tip credit. This is the default value. Reported Tips: Select this value if the earnings code represents cash or charge tips that your employees report. Other Sys Calc'd Tips (other system calculated tips): Select this value if the earnings code represents amounts used to bring employee earnings up to minimum wage when the cash wage plus tips is less than minimum wage. Tip Allocation: Select this value if the earnings code represents system-calculated amounts of tips allocated to employees. Tip Credit: Select this value if the earnings code represents system-calculated amounts of tip credit.
Special Calculation Routine	Select this check box if you have modified the COBOL code to perform a calculation routine. Note. Before you modify the COBOL code, discuss the proposed alterations with your PeopleSoft account executive.