Defining Earning and Deduction Elements

This chapter provides an overview of earning and deduction elements and discusses how to:

• Define earning elements.

• Define deduction elements.

Understanding Earning and Deduction Elements

This section discusses:

• Earnings and deductions.

• Calculation rules.

• Components.

• Automatically generated accumulators.

Earnings and Deductions

Earning and deduction elements enable you to send absence-related data to your payroll system so that payees can be appropriately compensated for time off. Think of earnings as adding to a person's pay and deductions as subtracting from a person's pay. There's little difference between defining earning elements and defining deduction elements.

The payroll system with which Absence Management is integrated determines whether you should create earning elements, deduction elements, or both:

• If using PeopleSoft Enterprise Payroll for North America, create earning elements.

• If using PeopleSoft Enterprise Payroll Interface with a third-party payroll system, create earning elements, deduction elements, or both as needed.

After you create earning and deduction elements in Absence Management, you map these elements to their counterparts in your payroll system. The rules that you define in Absence Management should be consistent with the corresponding earning and deduction rules in your payroll system.

See Also

Integration

Calculation Rules

When you define an earning or deduction element, you select from one of four calculation rules:

• Unit × rate.

• Unit × rate × percent.

• Base × percent.

• Amount.

An element's calculation rule determines which values the system can transmit to your payroll system after you process absence events.

In most cases, you'll want to select a calculation rule of unit × rate or unit × rate × percent. This enables you to pass the units of paid and unpaid time calculated by the Absence Take process to your payroll system. Absence Management will pass along the retrieved value for rate, percent, and amount, if these are part of the calculation rule, but its does not calculate values for these components.

Components

Saving an element definition causes the system to automatically generate the following components based on the selected calculation rule: unit, rate, base, percent.

Automatically generated components have the same name as the earning or deduction element plus a suffix. For example, if you create the earning element VACATION = Unit × Rate, the system automatically generates two component elements named VACATION_UNIT and VACATION_RATE. Suffix names are determined by the country that you specify for the earning or deduction element on the Element Name page.

Note. Names of earning and deduction elements are limited to 12 characters because of suffixes. Other element names can have as many as 18 characters.

Components take on the attributes of the earning or deduction element. If you change the attributes of the earning or deduction element, the component attributes also change. To continue with the previous example, if you change the name of the VACATION earning element to PTO, the system changes the component names to PTO_UNIT and PTO_RATE. The only attributes of a component that you can change directly are the description, comments, customer fields, and the Via Element Overrides option. You make these changes on the Components page.

A component is also an element and can therefore be used in another element's definition. As an example, assume that you define the following elements:

• SICK1 = Unit × Rate.

• SICK2 = Unit × Rate.

• SICK2 Rate = SICK1 Rate.

When the system calculates the rate for SICK2, it uses the rate for SICK1. You don't have to redefine the rate for every new element. No matter how the rate for SICK1 is defined (numeric, formula, and so on), the rate for SICK2 always equals the rate for SICK1.

See Also

Updating Component Element Information

Defining Suffixes

Automatically Generated Accumulators

When you define an earning or deduction element, you can specify which accumulators to create. For example, a year-to-date accumulator for an earning or deduction element. You can base the accumulators on calendar periods, fiscal periods, or both. You can also indicate whether you want to store amounts, units, or both and the periods that you want to store in the accumulator: period-, month-, quarter-, or year-to-date.

Note. Although the system creates automatically generated accumulators for earning and deduction elements, it does not update these accumulators. This is because Absence Management does not resolve earning and deduction elements. The use of these accumulators is applicable to PeopleSoft Enterprise Global Payroll.

Like components, automatically generated accumulators take on the attributes of the corresponding earning or deduction element and use the suffixes that you define on the Earnings and Deductions page of the Element Suffixes component (GP_SUFFIX).

Note. The only accumulators whose attributes are tied directly to an earning element or deduction element are those that are automatically generated by the Earning component (GP_EARNING) or the Deductions component (GP_DEDUCTION). Attributes of accumulators that you create using the Accumulators component (GP_ACCUMULATOR) are not tied directly to earning or deduction elements.

See Also

Setting Up Accumulators

Defining Earning Elements

To set up earning elements, use the Earning (GP_EARNING) component.

This section provides an overview of the setup steps for earning elements and discusses how to:

• Name an earning element.

• Define calculation rules for an earning element.

• View generated elements for earnings.

Understanding Setup Steps for Earning Elements

In Absence Management, earnings represent compensation that payees receive for paid absence events. You define earning elements to represent your organization's earning rules. The earning elements that you create in Absence Management should correspond to earning codes that are defined in your payroll system. For example, if your payroll system has an earning code for vacation pay, you should set up an earning element in Absence Management for vacation pay. After you define earning and deduction elements, you map them to payroll earning and deduction codes.

To create an earning element:

1. Define the earning name, security levels, and allowable overrides on the Earnings Name page.

2. Set up the calculation rule on the Earning - Calculation page.

   You select the components that make up the calculation rule: an amount or a combination of a base, percent, rate, and unit.

   Note. You cannot change a calculation rule after you run the Absence Take process.

Pages Used to Define Earning Elements

Note. The Earning component (GP_EARNING) includes several pages that are used by Global Payroll, but not by Absence Management. The table that follows lists only those pages that apply to earning setup in Absence Management.

See Also

Defining Element Names

Naming an Earning Element

Access the Earnings Name page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Earnings Name).

Note. You name every element and define its basic parameters on an Element Name page. All element components within Absence Management share the same first Element Name page (GP_PIN). However, the Earnings Name page contains the following additional fields that apply only to earnings.

Note. All other fields on the Earnings Name page are discussed in another chapter in this PeopleBook.

See Defining Element Names.

Defining Calculation Rules for an Earning Element

Access the Earnings - Calculation page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Calculation).

Calculation Rule	Define the calculation rule for the element. Valid values are Amount, Base x Percent, Unit x Rate, and Unit x Rate x Percent. Your selection affects the availability of other fields. When you process absence events, the system can generate units for the earning elements, which you can transmit to your payroll system. If you integrate Absence Management with Payroll for North America or Payroll Interface, select a calculation rule that includes units. Unit x Rate x Percent is recommended because it enables you to send both rate and percent information to your payroll system. Once you define a calculation rule for an element, you cannot change the rule after output results are generated for the element. If you need to change the element definition, create a new element.
Unit Type, Rate Type, Base Type, Percent Type, and Amount Type	The fields that you can update here depend on the selected calculation rule. Select Payee Level for each applicable component. Note. In Global Payroll, these fields tell the system how to determine the component values or amount. In Absence Management, you use the Absence Take - Day Formula page (when you link the earning element to a take element) to tell the system how to determine the component values or amount.
Unit Element, Rate Element, Base Element, Percent Element, Amount Element, Amount Value and Amount Currency	These fields are not available when you select Payee as the component type.
Generation Control	This field applies only to Global Payroll.
Pre Process Formula and Post Process Formula	These fields apply only to Global Payroll.
Frequency Option and Frequency	These fields apply only to Global Payroll.
Retro Recalculation Option	Specify whether to recalculate an element during retroactive processing. Values are: Always Recalculate Do Not Recalculate If you select Always Recalculate here, the element is recalculated during processing the element in a retroactive situation. Note. You can override this field on the Retro Process Overrides page. See Defining Retroactive Processing.

Viewing Generated Elements for Earnings

Access the Earnings - Generated Elements for Element <name> page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Auto Generated Accumulators).

Components	Displays the automatically generated element for each component of the earning element.
Auto Generated Accumulators	Displays automatically generated accumulators.

See Also

Defining Suffixes

Defining Deduction Elements

To set up deduction elements, use the Deductions (GP_DEDUCTION) component.

This section provides an overview of the setup steps for deduction elements and discusses how to:

• Name a deduction element.

• Define calculation rules for a deduction element.

• View generated elements for a deduction.

Understanding Setup Steps for Deduction Elements

A deduction is a payroll element that subtracts from a person's pay. If you are using Absence Management with Payroll Interface, you can create deduction elements in addition to earning elements to compensate payees for time off. Do not create deduction elements if you are using Payroll for North America with Absence Management. Absence Management does not transmit deduction date to Payroll for North America.

To create a deduction element, define the deduction name and calculation rule.

See Also

Defining Earning Elements

Pages Used to Define Deduction Elements

Note. The Deductions component (GP_DEDUCTION) includes several pages that are used by the Global Payroll application and not by Absence Management. The table that follows lists only those pages that apply to deduction setup in Absence Management.

See Also

Pages Used to Define Earning Elements

Naming a Deduction Element

You name every element and define its basic parameters on an Element Name page. All element components within Absence Management share the same first Element Name page (GP_PIN).

The Deduction Name page is similar to the Earnings Name page.

See Also

Naming an Earning Element

Defining Calculation Rules for a Deduction Element

The Deduction - Calculation page is similar to the Earnings - Calculation page.

See Also

Defining Calculation Rules for an Earning Element

Viewing Generated Elements for a Deduction

The Deduction - Generated Elements page is similar to the Earnings - Generated Elements page.

See Also

Viewing Generated Elements for Earnings