Understanding Global Payroll for India

This chapter discusses:

• Global Payroll for India.

• Global Payroll for India business processes.

• Delivered elements for India.

• Delivered elements naming conventions.

• Archiving data for Global Payroll for India.

Global Payroll for India

Global Payroll for India is a country extension of the core PeopleSoft Enterprise Global Payroll application. It provides you with the payroll rules, elements, and absence processes that you need to run a payroll in India.

Note. If you want to use the delivered rules for this country, we recommend that you use only employment instances in PeopleSoft Enterprise Human Resources.

Global Payroll for India Business Processes

Global Payroll for India supports the following business processes:

• Establishments.

  Establishments are used to identify separate units of a company, based on location. Global Payroll for India provides pages on which you capture establishment information. Pages provided record the head of the establishment, nature of business, whether the establishment is registered under the Factories Act or the Shops and Establishments Act, whether the establishment is covered under the Employee State Insurance (ESI) Act, Workmen's Compensation Act, or both, and ESI, provident fund, professional tax, and income tax registration details.

  See Setting Up Establishments.

• Allowances.

  Companies might provide payees certain types of allowances. Global Payroll for India enables you to process leave travel and medical allowances.

  For the leave travel allowance program, you can define the program (including who can be covered for reimbursements), capture the leave travel allowance amount (per payee) for the year, track payee claims details and whether the minimum days of leave have been taken, and track payee balances.

  For the medical allowance program, you can define the program (clearly defining the exemption amount that a payee can claim), track payee claims details (while ensuring that the claims in excess of the exemption limit are added to the taxable earnings of the payee), and track payee balances.

  See Processing Allowances.

• Absences.

  PeopleSoft Global Payroll delivers predefined rules for processing absences due to privilege leave, sick leave, maternity leave, casual leave, and other reasons. We designed these rules according to India's statutory requirements. You can easily modify many of these rules to reflect absence policies (leave policies) that are specific to your organization or to labor agreements that might be in force for the employees.

  We deliver sample values for many absence take and absence entitlement elements.

  PeopleSoft delivers predefined sections and process lists for absence processing. You can use these, modify them, or create your own.

  See Understanding Absence Rules.

• Provident funds.

  The provident fund program exists as a method of retirement savings for India's workforce. With Global Payroll for India you can:

  • Define the type of provident fund chosen by the company (statutory provident fund or recognized provident fund).

  • Ensure that all payees are registered with a provident fund and capture the personal information for the payee and his or her beneficiaries.

  • Define the three programs under the provident fund and the calculation methodology for each.

  • Ensure that the deductions for payee contributions are properly calculated and deducted on a monthly basis.

  • Ensure that the employer contribution is properly calculated.

  • Ensure that the monthly contributions are correctly deposited with the proper provident fund authority.

    See Enrolling Payees in Provident Funds.

• ESI.

  ESI is a social security program designed to provide income protection to workers and their dependents when a payee becomes unable to work or when a payee dies. With Global Payroll for India you can ensure that all of the payees are registered per the ESI Act, capture relevant personal information of payees and their dependents, and ensure that the deductions for contributions from payees are deducted from their pay each month.

  See Enrolling Payees in Employee State Insurance.

• Reports.

  For certain payroll business processes, you need to generate reports to comply with legislative reporting requirements. Such reports are required for processes related to ESI, provident funds, profession tax, income tax, medical allowance, and leave travel allowance. Global Payroll for India provides samples of these for your reporting needs.

  The Payee Reports feature of Global Payroll for India provides you with a flexible reporting solution for payroll information. Setup pages are provided that enable you to change the Global Payroll elements that are used in the delivered sample reports. This feature enables you to change the contents of a report without making a change to the program that prints the report.

  Additionally, Global Payroll provides generic reporting pages to address additional reporting needs. You create a generic report by defining report parameters such as break levels, sorting, and the rows and columns to be printed on the report. After you define the parameters, you can run the report. At the time you run the report, you can define additional parameters on the run control page to further refine the resulting reports.

  See Creating Payee Reports.

  See Global Payroll for India Reports.

• Labour Welfare Fund (LWF).

  The Indian Ministry of Labour has introduced the concept of Labour Welfare Fund to extend a measure of social assistance to workers in the unorganized sector. With Global Payroll for India, you can ensure that all payees are registered for LWF deductions.

  The deductions towards LWF are different for each state and are based on the Active status of the employee on the last day of the month. Enrolling Payees in LWF: The Specify Tax Details IND page is used to enroll employees under LWF. A new field, Eligible for LWF, is introduced to capture employee registration.

• Loans and advances.

  Many companies in India make loans and advances available to employees. Global Payroll for India enables you to issue loans and advances to payees and then process repayment as deductions over a period of time. With Global Payroll for India you can define the different types of loans that the company provides (such as home loans, car loans, and personal loans), define the repayment schedules that the payee requests based on the type of loan, and ensure that repayment from payees is deducted on a monthly basis and that the monthly repayments are adjusted against the loan balance or the advance balance. The payee has the option of early payment of the loan, commonly known as foreclosure in India. Payment and balance information is easily provided to payees.

  See Managing Loans and Advances.

• Taxes.

  Companies must deduct and report on taxes. Global Payroll for India provides functionality to meet legislated tax recording, reporting, and processing requirements for taxes deducted per the Indian Income Tax Act and Profession Tax Act. Refer to the year end processing section later in this chapter for more details on reporting.

  See Withholding Taxes.

• Banking.

  The banking process uses input from Global Payroll setup, payee, and result tables. The process creates the data required for direct deposit into output tables. This includes the Employee, Account number, Net Pay, and other fields. This process must be run after the payroll run. We deliver specifications to a sample financial institution as a guide for you to use for the financial institution.

  A report and a flat file to be sent to the bank are generated from these output tables.

  The preceding process can be run separately for reimbursements such as medical or leave travel allowance. If the earnings for reimbursements are nontaxable, then the gross and net amounts are the same.

  For other types of pay (such as bonuses), you follow the same process as for a regular payroll, which you run separately.

  See Working with Banking.

• Payslips.

  The Global Payroll for India payslip solution provides you with a series of features including payslip definition pages, run control pages, and a Structured Query Report program.

  The data used in the production of the payslips is generated by the pay calculation process and resides in various result tables. Additional data from PeopleSoft Human Resources and Global Payroll are also used. While some customers have their own pay advice designs, we provide a generic payslip that you can modify to meet your needs.

  See Working with Payslips.

• Year end processing.

  One of the tasks that you must undertake in the annual payroll cycle is year end processing. We provide functionality to meet the requirements for year end recording, reporting, and processing. Year end reports are generated in formats for annual reporting required under legislation such as the Factories Act, ESI Act, Provident Fund Act, Profession Tax Act, Minimum Wages Act, and Income Tax Act. You can easily provide year end information to both the regulatory authorities and the payees at the close of the financial year.

  See Managing Year End Processing.

Delivered Elements for India

This section discusses:

• Creation of delivered elements.

• Element ownership and maintenance.

Creation of Delivered Elements

Global Payroll defines each business process for India in terms of delivered elements and rules. Some of these elements and rules are specifically designed to meet legal requirements, while others support common or customary payroll practices.

All of the elements and rules delivered as part of the country extension were created by means of the core application—the same application that you use both to create additional elements or rules and, in many cases, to configure existing elements delivered as part of the Global Payroll system. Because the tools that you need to redefine or create new payroll elements are fully documented in the core application PeopleBook, we do not reproduce this information here. Instead, we briefly review the relationship between the core application (which contains the tools that you need to define your own elements and rules) and the country extensions (which contain country-specific rules and elements defined by PeopleSoft Global Payroll).

The core application has the following characteristics:

• It consists of a payroll rules engine—a flexible tool that enables you to define the rules and elements of the payroll system and perform payroll and absence calculations.

  Global Payroll does not embed payroll-specific logic or computations in application code. Instead, it specifies all business application logic, such as earnings, deductions, absences, and accumulators, in terms of payroll rules and elements. Global Payroll enables you to enter and maintain payroll rules through a set of pages and offers a comprehensive set of features that enable you to work in your preferred language or currency.

• It provides a payroll processing framework—a flexible way to define and run payroll and absence processing flows, such as calendars, run types, pay periods, and process lists.

Country extensions have the following characteristics:

• They are built by means of the core application.

• They consist of statutory and customary objects (country-specific payroll rules, elements, payroll processes, reports, pages, and self-service applications).

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

See Also

Viewing Delivered Elements

Element Ownership and Maintenance

The delivered elements and rules of the Global Payroll country extension can be classified according to whether they are owned and maintained by the customer or by PeopleSoft. Some elements and rules are maintained exclusively by PeopleSoft and cannot be modified, while others can be configured to meet requirements unique to each organization.

Element Ownership in Global Payroll

Five categories of element ownership exist in Global Payroll.

Element Ownership in Global Payroll for India

Of the five categories of element ownership, only the following two are used to define Indian elements: PS Delivered/Maintained and PS Delivered/Not Maintained. Although Global Payroll for India delivers some elements as PS Delivered/Maintained, the large majority of elements are designated PS Delivered/Not Maintained. This enables you to modify, update, and reconfigure the delivered elements to meet needs that are specific to your organization.

Note. In general, Global Payroll for India uses the ownership category PS Delivered/Not Maintained except where the modification of an element might interfere with calculations designed to satisfy strict (and generally invariable) legal requirements, such as in the case of taxes. The value of this approach is clearly evident in the setup of delivered accumulators. Because balance accumulators (for example, those storing taxable gross on a year-to-date basis) must be set up to comply with rigid legal requirements for reporting taxes and contributions, Global Payroll for India defines them as PS Delivered/Maintained (meaning that you cannot modify or directly add new elements to them). However, you can add new elements to these accumulators by using the delivered segment accumulators, which serve as the basic entry point into the system and are not maintained by PeopleSoft. Therefore, when you define a new earning or deduction, you can assign the element to a segment accumulator, and the segment accumulator automatically contributes to the correct balance accumulators.

The following table contains an element-by-element description of the Global Payroll for India approach to element ownership and maintenance:

See Also

Defining Element Names

Delivered Elements Naming Conventions

This section discusses:

• Element names.

• Functional area codes.

• Element type codes (PIN_TYPE).

Element Names

One of the keys to understanding how delivered payroll elements function in the system is to understand their names. Understanding the naming convention developed for PeopleSoft-delivered elements can help you determine how an element is used, the element type, and even the functional area it serves. Depending on whether the element is a primary element, a component of a primary element, or a supporting element, one of the following naming conventions applies.

Supporting Elements

For supporting elements, such as variables, formulas, dates, durations, and so on, PeopleSoft Global Payroll uses the following naming conventions: FF TT NAME or FFF TT NAME.

The following list further describes this naming convention:

• FF or FFF: Functional area code.

  See Functional Area Codes.

• TT: Type of supporting element.

  See Element Type Codes (PIN_TYPE).

• NAME: The name provides a further means of identifying the element.

For example, in the provident fund array PF AR ENROLLMENT, PF represents the functional area, AR represents the element type, and ENROLLMENT provides a further means of identifying the element.

Note. This naming convention applies to the following element types: arrays, brackets, counts, dates, durations, formulas, rate codes, variables, historical rules, fictitious calculation rules, proration rules, rounding rules, and generation control conditions.

Primary Elements

Primary elements, such as earnings, deductions, absence take, and absence entitlement elements generally do not contain functional area codes or element type codes in their names. This is because primary elements have names based on Indian terms that identify the function and element type without the use of additional codes. For example, the name of the earning element BASE SALARY clearly identifies this element as an earning, and more specifically, as a base salary element.

Other Elements

Although no fixed naming convention exists for accumulators, sections, and element groups, Global Payroll for India commonly uses the following naming conventions: FF TT NAME and FFF TT NAME.

The following list further describes this naming convention:

• FF or FFF: Functional area code.

  See Functional Area Codes.

• TT: Type of supporting element.

  See Element Type Codes (PIN_TYPE).

• NAME: The name provides a further means of identifying the element.

For example, a section in a process list for India might be named LA AC LOAN PAY, where LA is a functional area code, AC represents the element type, and LOAN PAY provides a means of uniquely identifying the element.

Additional Clues to the Use of Indian Elements

Many Indian elements contain abbreviations that provide clues (beyond those provided by the functional area codes or element type codes) to their use in the system. For example, consider the following variable element: LT VR CLAIM AMTNTAX is the nontaxable claim amount for leave travel allowance. As you become more familiar with the payroll rules that are created for India, these abbreviations help you to further identify and understand the role played by each element.

The following table lists the most common abbreviations that are used in the names of Indian elements:

Component Names (Suffixes)

In Global Payroll for India, suffixes are used to name the components of earning and deduction elements. For example, when you create an earning, deduction, or absence element in Global Payroll, you must define the components that make up the element, such as base, rate, unit, and percentage. The system automatically generates the components and accumulators for the element based on the calculation rule or accumulator periods that are used. The system also names the components and accumulators by appending a suffix to the element's name.

For example, assume that you define the earning element named EARN1 with the following calculation rule:

EARN1 = Rate × Unit

The system automatically creates two additional elements for the components in the calculation rule: a rate element called EARN1_RATE and a unit element called EARN1_UNIT.

The system creates suffixes to name the components of the element (_RATE and _UNIT). In Global Payroll all suffixes fall into one of the following types:

• Separator.

• Earning/deduction component suffixes.

• Earning/deduction accumulator suffixes.

• Deduction arrear component suffixes.

• Absence entitlement component suffixes.

• Absence entitlement accumulator suffixes.

Note. To view all the suffixes that are defined for a country, use the Element Suffixes page in the core Global Payroll application.

Separator

Global Payroll for India delivers a separator defined as: _ (underscore).

Component Suffixes

The following table lists the component suffixes delivered for India:

Accumulator Suffixes

The following table lists the accumulator suffixes delivered for India:

Deduction Arrears Component Suffixes

The following table lists the deduction arrears component suffixes delivered for India:

Absence Entitlements Suffixes

The following table lists the absence entitlement suffixes delivered for India:

See Also

Defining Suffixes

Functional Area Codes

The following table contains the functional area codes used in the names of Indian elements:

Element Type Codes (PIN_TYPE)

The following table contains codes for all the element types. Because not all element types are delivered for India, not all of these codes appear in the names of Indian elements:

Archiving Data for Global Payroll for India

PeopleSoft Enterprise Global Payroll for India generates a large amount of result data. This data often needs to be maintained for audit or regulatory purposes. To keep the amount of stored data manageable, you should periodically archive it. PeopleSoft PeopleTools delivers an archiving tool called the Data Archive Manager. To help you archive your result data using the Data Archive Manager, PeopleSoft Global Payroll for India delivers a predefined archive object (GPIN_RSLT_ARCHIVE) and an archive template (GPINRSLT). The delivered archive template uses queries that select data by calendar group ID (CAL_RUN_ID field). The calendar group ID can be used to archive single or multiple calendar group data.

The archiving function captures data from the calculation, banking, general ledger, and other post processing tables. The following table lists the result tables that are archived for Global Payroll for India:

Note. Use extreme caution when making changes to delivered archive objects, queries, or templates. Any modifications can result in the loss of important data.

See Archiving Global Payroll Data.