PeopleSoft Enterprise Global Payroll for China 9.1 PeopleBook

Processing Terminations

This chapter provides an overview of terminations and discusses how to:

Set up severance payments calculation.
Set up termination payments calculation.

Understanding Terminations

When an employee is terminated by an employer, his pay out comprises a severance payment and a termination payment. Termination payments may also include pay in lieu of short notice and a payout to compensate for the employee's annual leave balance.

Severance Payment

If an employer terminates an employee, then he has to pay the employee severance. If, however, the employee resigns, then no such payment is required. The monthly salary calculation would be company-specific. Some companies might use a base salary for calculation, while certain state-owned enterprises might include all the components of a salary while calculating the monthly salary. Severance pay is negotiable between the employer and employee. This payment can be calculated as:

A fixed monthly salary as decided by the employer or negotiated with the employee.
An actual average of the employee's salary, the average being calculated over a period of 12 months.

Tax calculation on severance pay is subject to the same taxation rules regardless of how it is calculated.

According to China Labor law, if an employer terminates an employee, then he has to pay the employee severance payment. This amount is taxable, but a specific tax calculation applies. If the employee resigns, however, then no severance payment is required.

The amount of severance pay depends on the years of service (YOS). Generally, for every year of service, one month's salary is paid. For the purpose of salary, the average salary of the last 12 months is used. Thus, the severance pay is calculated as:

Severance Pay =Average monthly salary from last 12 months × YOS

The YOS has a ceiling. For example, it can be a maximum of 12 years. Years of service are rounded up to the nearest integer.

This severance pay is further taxed per the taxation requirements, depending on the tax area. To determine severance pay tax amount, you initially determine the taxable income amount to obtain the tax rate and quick deduction amount to use.

Severance taxable income = (Severance Pay Amount – Severance Pay Exempted Amount (based on tax area)) ÷ Years Of Service

Using the Severance Taxable Income, you can determine the tax rate based on the employee's tax area. You can then calculate the actual amount of tax due on the severance payment in the following way:

Initial Severance Tax Amount = (Severance Taxable Income – Tax Exempt Amount) × Tax Rate – Quick Deduction Amount

Severance Tax Amount = Initial Severance Tax Amount × YOS

Severance Tax Amount is rounded off to jiao.

Termination Payment

Termination payments are composed of:

Any breach of notice as established in the contractual agreement by either side (employee or employer). The party would pay the other in lieu of short notice period.
The compensation of accrued annual leave balance. Employers must pay out the leave balance.

Termination payments:

Are taxed along with the last month's salary of the employee. Not all companies have contractual agreements for the notice period.
Use one of two methods to determine the salary for the purpose of calculation:
- A fixed monthly salary as decided or negotiated by the employer with employee.
- The previous month's actual salary paid by the employer.

Leave Compensation for Annual Leave Balance

When an employee is terminated, if an outstanding annual leave is accrued to his account, the company may compensate the leave. This amount is taxable along with normal earnings.

The amount paid in lieu of the balance annual leave is calculated in the following way:

Annual Leave Payment = Daily Rate X Balance Annual Leaves × 300%

The calculation of daily rate is based on the type of the employee.

If the employee is a daily-rate employee, the same rate is used. If the employee works on a monthly rate, the daily rate is calculated as:

Daily rate = Monthly Salary ÷ Average working days in a month

The average working days in a month is regulated by the Ministry of Labor and Social Security (MOLSS) of China.

Pay In Lieu of Short Notice Period

If a breach of notice period occurs as detailed in the contractual agreement by either side, the party breaching the contract must pay the other in lieu of the short notice period. This amount is taxable along with normal earnings. Calculation of the notice period is:

Payment for Short Notice = Daily Rate × Days short of notice period

The Daily rate is calculated as:

Daily-Rate = Monthly Salary ÷ Average working days in a month

Payment in lieu of notice by the employer is a pretax earning for the employee. Payment in lieu of notice by the employee is a pretax deduction for the employee. As such, it would need to be taxed with the last month's salary.

Setting Up Severance Payments Calculation

This section lists the pages used to set up your Global Payroll China system to calculate severance payments and discusses how to:

Define start and end dates used by historical rules.
Define severance payment variables.
Define severance payment formulas.

You can follow the setup process using the demo data provided by PeopleSoft Global Payroll along with the references to relevant topics in PeopleSoft Enterprise Global Payroll 9.1 PeopleBook,which provide greater background detail.

Pages Used to Set Up Severance Payments Calculation

Page Name	Definition Name	Navigation	Usage
Earnings Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings	Name the earnings element (for example, the demo data uses SEVERANCE) and define its basic parameters. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Calculation	GP_ERN_DED_CALC	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Calculation	Define calculation rules for the earnings element. Set the Calculation Rule value to Amount, the Amount Type value to Formula - Monetary and Decimal, and the Amount Element value to CN FM SEV AVG PAY. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Rounding/Proration	GP_ERN_DED_RND	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Rounding/Proration	Specify rounding and proration options for the components of the earnings element by selecting Use Pay Group Rounding in the Rounding Option - Resolved Amount field. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Auto Generated Accumulators	GP_AUTOGEN_ACUM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Auto Generated Accumulators	Define characteristics of automatically generated accumulators for the earnings element. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook," Defining Earning and Deduction Elements."
Process Lists - Definition	GP_SECTION	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Processing, Process Lists, Definition On the search page, in the Element Name field, enter CN PR PAYROLL.	Change Process List CN PR PAYROLL and add Termination section CN SE TERMINATION, with a conditional formula CN FM TERM CHECK. This formula checks whether the employee was terminated within the current segment being processed.
Section - Section Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Processing, Sections, Section Name On the search page, in the Element Name field, enter CN SE TERMINATION.	Use this page to set up the CN PR PAYROLL process list. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Processing Elements," Setting Up Sections.
Section - Definition	GP_SECTION	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Processing, Sections, Definition	For the CN PR PAYROLL process list, use this page to add the earnings element as an earnings element type. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Processing Elements," Setting Up Sections.
Element Group Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Element Groups, Element Group Name	Define the CN EG TERMINATION element group. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Organization Structure," Defining Element Groups.
Element Group Members	GP_ELEMENT_GROUP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Element Groups, Element Group Members	Insert the earnings element into the CN EG TERMINATION element group. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Organization Structure," Defining Element Groups.
Eligibility Group	GP_ELIG_GROUP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Eligibility Groups, Eligibility Groups	Insert the CN EG TERMINATION element group into the K6MONTHLY eligibility group. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Organization Structure," Defining Eligibility Groups.
Array Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Arrays, Array Name	Define the Array CN AR EE JOB. This array picks up the termination job row (last row in the current segment), determining whether the action reason entered indicates that severance pay is to be calculated. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Array Elements.
Field Map and Keys	GP_ARRAY_KEYS	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Arrays, Field Map and Keys	Select the database table for the FROM clause of the SQL statement. Define the keys and retrieval criteria for the array and the WHERE clause of the SQL statement that the system uses when retrieving data for the array. Define the fields to be returned and the elements to be filled by the array. This provides the data for the SELECT clause of the SQL statement and determines the elements to resolve from this array call. You also use this page to define the sort order for retrieving rows from a database. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Array Elements.
Accumulator Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Accumulators, Accumulator Name	Define a custom accumulator CN AC ROLLAVG SAL (no expiry, continues forever). Based on HIRE DATE, this accumulator holds all the earnings that make up the average monthly salary. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Setting Up Accumulators," Defining Accumulators.
Level	GP_ACCUMULATOR_1	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Accumulators, Level	Specify keys for the CN AC ROLLAVG SAL accumulator and indicate the timing of the accumulator's resolution. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Setting Up Accumulators," Defining Accumulators.
Period	GP_ACCUMULATOR_2	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Accumulators, Period	Define the period for the accumulator CN AC ROLLAVG SAL. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Setting Up Accumulators," Defining Accumulators.
Members	GP_ACCUMULATOR_3	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Accumulators, Members	Define the list of elements that contribute to the accumulator CN AC ROLLAVG SAL. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Setting Up Accumulators," Defining Accumulators.
Historical Calculation Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Historical Rules, Historical Calculation Name	Define historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. These historical rules read the accumulator CN AC ROLLAVG SAL, starting from the previous pay period and going back a number of periods. This number can be 12 months (default value), or the number of months since the hire date, if the employee was employed fewer than 12 months). A value can also be entered as a payee supporting element override in cases in which 12 months of pay history is not available. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Historical Rule Elements.
Processing Period	GP_HIST_RULE1	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Processing Period	Define the details of the processing period for the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. Depending on what you select as the rule type, some fields may not be available for entry. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Historical Rule Elements.
Parameters and Mapping	GP_HIST_RULE2	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Historical Rules, Parameters and Mapping	Define the formula for the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Historical Rule Elements.
Date Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Dates, Date Name	Define the start and end dates used by the historical rules. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Data Retrieval Elements," Defining Historical Rule Elements.
Variable Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Variable Name	Define severance payment variables. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Calculation Elements," Defining Variable Elements.
Definition	GP_VARIABLE	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Definition	Define the value of a variable according to the format specified on the Variable Name page. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Calculation Elements," Defining Variable Elements.
Formula Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Formulas, Formula Name	Define severance payment formulas. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Calculation Elements," Defining Formula Elements.

Defining Start and End Dates Used by Historical Rules

Start date = previous period:

CN DT ROLLAVG STRT is set from the period end date minus one month.
CN DT ROLAVG ST-1 is set from the begin end date minus one month.

End date = 12 months prior, or less if employee is a new hire or if a payee override is entered (CN VR NBR PERIODS).

CN DT ROLLAVG END is set from the CN DT ROLLAVG STRT minus the variable CN VR NBR PERIODS that contains the number of months.
CN DT ROLLAVG END -1 is set from the CN DT ROLAVG ST-1 minus the variable CN VR NBR PERIODS that contains the number of months.

Defining Severance Payment Variables

Define the following variables:

Variable	Description
CN VR ROLAVG START CN VR ROLAVG END	Values retrieved from the historical rule.
CN VR NBR PERIODS	The number of months that the historical rule will interrogate (the default is 12 months). If the employee is not a new hire, but 12 months pay results do not exist, then as part of the payroll process, this field will be set using payee overrides.
CN VR AVG SEV PAY	Holds the average severance pay. The default value is 999999.99 (rolling average calculation). This can be overwritten at payee, pay group, or pay entity to a value of 0.00 to indicate that the calculation is to be based on monthly base pay. It can be set to a specific value at payee level to indicate that the calculation is to use this value and not the base pay rolling average.
CN VR ACTION REAS	Holds the action reason from the termination job row. The array populates this variable.
CN VR TERM ACTION	This is set to the default of RED, for staff reduction. This is the action reason that will invoke severance pay. This can be overwritten at the Pay Entity/Group level.

Defining Severance Payment Formulas

Define the following formulas:

Formula	Description
CM FM TERM CHECK	Ensures that the termination date is within the current segment being processed. This formula checks the employee's status: Q=Retired with Pay, R=Retired, T=Terminated, U=Terminated with Pay.
CN FM SEV AVG PAY	This formula is invoked from the earning code SEVERANCE. Calculates average pay for Severance. Sets the variable CN VR AVG SEV PAY with specific payee value entered or base pay (MONTHLY RT) or Rolling Average (CN FM SEV AVG HIST is invoked if this is the case) Severance Pay = CN VR AVG SEV PAY X Years of Service (YOS). YOS is rounded up to full years (no decimal). YOS is based on LAST HIRE DATE.
CN FM SEV AVG HIST	Severance Pay Historical Rule This invokes the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. The historical rule interrogates the accumulator CN AC ROLLAVG SAL and returns two accumulator values—starting pay and ending pay. Sets the number of months variable (CN VR NBR PERIODS) based on whether the number of months was overridden at the payee level or whether the employee is a new hire. In neither, then the default variable is 12 months. Calculates the average pay variable (CN VR AVG SEV PAY) based on starting pay minus the ending pay divided by the number of periods. (CN VR ROLAVG START – CN VR ROLAVG END ) ÷ CN VR NBR PERIODS Note. If the value of this calculation is zero, then the monthly salary is used.

Setting Up Termination Payments Calculation

This section provides an overview of the termination payment calculation setup and discusses how to:

Define termination variables.
Define termination formulas.

Understanding the Termination Payments Calculation Setup

Upon termination, the employee or employer must give notice. If this notice is not sufficient, then the termination payment process considers a Payment in Lieu of Notice. You indicate this by entering the number of days notice in the variable CN VR DAYS NOTICE using the payee supporting element override. The amount calculated can be either an earning or a deduction. If the employee (E) has instigated the termination, then the amount calculated is considered a deduction. The variable CN VR NOTICE FLAG becomes E by default. If, however, the employer (R) has terminated the employee, then the amount is an earning. You indicate this by setting the variable CN VR NOTICE FLAG to R using the payee supporting element override.

As part of the calculation of Payment in Lieu of Notice, any outstanding annual leave balance (VAC_ENT_BAL) is also paid.

Pages Used to Set Up Termination Payments Calculation

Page Name	Definition Name	Navigation	Usage
Earnings Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Earnings Name	Name the element (for example, the demo data uses TERM PAY) and define its basic parameters. The earning will be set up as amount, with CN FM TERM PAY set as the amount type. This will add to the accumulators GROSS and TAXABLE NORMAL SAL. It will also enable payee override so that the termination pay can be entered rather than calculated. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Calculation	GP_ERN_DED_CALC	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Calculation	Define calculation rules for the earnings element. Set the Calculation Rule value to Amount, the Amount Type value to Formula - Monetary and Decimal, and the Amount Element value to CN FM TERM PAY. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Rounding/Proration	GP_ERN_DED_RND	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Rounding/Proration	Specify rounding and proration options for the components of the earnings element by selecting Use Pay Group Rounding in the Rounding Option - Resolved Amount field. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Earning Elements.
Earnings - Auto Generated Accumulators	GP_AUTOGEN_ACUM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Auto Generated Accumulators	Define characteristics of automatically generated accumulators for the earnings element. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook," Defining Earning and Deduction Elements."
Accumulators	GP_AUTOGEN_ACUM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earnings, Accumulators	Add the earnings accumulator elements CHN GROSS and TAXABLE NORMAL SAL with the accumulator signs of Add. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements."
Deduction Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Deductions, Deduction Name	Name the element (for example, the demo data uses TERM DED) and define its basic parameters. The deduction is set up as an amount, with CN FM TERM DED set as the amount type and subtracts from the accumulator GROSS. Payee override is enabled so that the termination deduction can be entered rather than calculated. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Deduction Elements.
Earnings - Calculation	GP_ERN_DED_CALC	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Deductions, Calculation	Define calculation rules for the deductions element. Set the Calculation Rule value to Amount, the Amount Type value to Formula - Monetary and Decimal, and the Amount Element value to CN FM TERM DED. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Deduction Elements.
Deductions - Rounding/Proration	GP_ERN_DED_RND	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Deductions, Rounding/Proration	Specify rounding and proration options for the components of the deductions element by selecting Use Pay Group Rounding in the Rounding Option - Resolved Amount field. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Earning and Deduction Elements," Defining Deduction Elements.
Deductions - Accumulators	GP_ERN_DED_AC_ADDL	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Deductions, Accumulators	Add the deductions accumulator element CHN GROSS with the accumulator sign of Subtract.
Section Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Processing, Sections, Section Name From the search page, in the Element Name field, enter CN SE TERMINATION.	Add the earning TERM PAY and the deduction TERM DED. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Processing Elements," Setting Up Sections.
Element Group Members	GP_ELEMENT_GROUP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Element Groups, Element Group Members	Add the earning and deduction elements to the CN EG TERMINATION element group. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Organization Structure," Defining Element Groups.
Variable Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Variables, Variable Name	Define termination variables. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Calculation Elements," Defining Variable Elements.
Formula Name	GP_PIN	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Formulas, Formula Name	Define termination formulas. See PeopleSoft Enterprise Global Payroll 9.1 PeopleBook, "Defining Calculation Elements," Defining Formula Elements.
Text Definition	GP_FORMULA2_V2	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Supporting Elements, Formulas, Text Definition	View or modify formula text for CN FM TERM PAY and CN FM LVE TERM formulas.

Defining Termination Variables

Define the following variables:

Variable	Description
CN VR DAYS NOTICE	Days Short Notice Period. This is entered as a payee override as part of the termination process.
CN VR NOTICE FLAG	EE or ER Notice Flag, default of E. This indicates that the type of payment is employee. If the payment is employer, than this variable is set to R using payee override as part of the termination process.

Defining Termination Formulas

Define the following formulas:

Formula	Description
CN FM TERM PAY	Invoked from TERM PAY earning, this formula calculates the Payment in Lieu of Notice by Employee (R). It is a pretax earning for the employee. Enter the number of days notice using PI. It calculates the leave balance outstanding, calling CN FM LVE TERM. If the variable CN VR NOTICE FLAG = R (employer instigated termination), then it calculates: Payment = Monthly Rate/Numbers of day in a month × number of short days notice It adds the amount calculated for the leave and the amount calculated for the notice period and places the result in CN FM TERM PAY.
CN FM LVE TERM	Called from CN FM TERM PAY, this formula checks whether the employee has a leave balance (VAC_ENT_BAL), then calculates: Payment = Monthly Rate/Numbers of day in a month × Leave Balance
CN FM TERM DED	Invoked from TERM DED deduction, this formula calculates the Payment in Lieu of Notice by Employee (E). It is a pretax deduction for the employee. You enter the number of days using PI. If CN VR NOTICE FLAG = E (employee instigated termination). Then the system calculates: Payment = Monthly Rate/Numbers of day in a month × number of short days notice