PeopleSoft Enterprise Human Resources 9.1 PeopleBook: Manage Commitment Accounting

Setting Up Encumbrance Definitions

This chapter provides an overview of encumbrance definition functionality, lists prerequisites, and discusses how to:

Set up fringe matrix codes.
Set up encumbrance definitions.

Understanding Encumbrance Definitions

Encumbrance definitions specify how the system calculates deduction and tax encumbrances, as well as the combination codes used.

Encumbrance Definitions

Using the encumbrance definition functionality in the commitment accounting business process you can:

Specify how tax and deduction encumbrances and pre-encumbrances are funded for departments (that is, for the whole department or at lower levels within the department, such as position, position pool, job code, or appointment—or any combination of these).
Specify how the system should encumber taxes and deductions and what funding sources to use for each.
Specify the default currency code for the encumbrance definition and maintain multiple effective-dated encumbrance definitions by department.

The encumbrance processes use the encumbrance definition information to calculate and distribute encumbered deductions and taxes, as a flat amount, and/or as a percent of encumbered earnings.

Note. Information stored on the Dept Budget Earnings page (DEPT_BUDGET_ERN) determines how earnings are funded during encumbrance processing.

Fringe Matrix Codes

When you create an encumbrance definition, you list the combination codes to use for tax distribution and for deduction distribution. For each combination code, you indicate the percent of earnings to encumber. You can enter a fixed percent, or you can vary the percent according based on the salary for the employee or position. For example, you could encumber 10% of salary for employees who earn up to 30,000.00 and 8% of salary for employees who earn more than that.

Note. Any given employee falls into one salary range category, and the system creates encumbrances using only the settings for that range. The system does not apply different percentages to different ranges within a single employee's salary.

Prerequisites

Before creating encumbrance definitions, you must set up valid combination codes, position pools (if you use them), offset groups, and budget benefit groups.

Setting Up Fringe Matrix Codes

To set up encumbrance definitions, use the Encumbrance Salary Range Code (HP_ENCUMB_SAL_RANG) and Encumbrance Fringe Matrix Code (HP_ENCUMB_FRG_MAT) components.

This section discusses how to:

Define salary range codes.
Define fringe matrix codes.

Pages Used to Set Up Fringe Matrix Codes

Page Name	Definition Name	Navigation	Usage
Encumbrance Salary Range Code	HP_SALARY_RANGE	Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Salary Range Code, Encumbrance Salary Range Code	Define fringe encumbrance percentages and additional amounts based on salary ranges.
Encumbrance Fringe Matrix Code	HP_FRINGE_MATRIX	Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Fringe Matrix Code, Encumbrance Fringe Matrix Code	Define an overall encumbrance fringe matrix code where you assign different salary range codes to different groups based on companies, pay groups, employee classifications, employee types, and full time/part status. You also establish an overall default salary range code and company-specific default salary range codes for employees who don't fall into any of the classifications that you create.

Defining Salary Range Codes

Access the Encumbrance Salary Range Code page (Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Salary Range Code, Encumbrance Salary Range Code).

Minimum Salary and Maximum Salary

Use these fields to define salary ranges that have different encumbrance percentages or additional amounts. There must not be any gaps in the ranges you set up, nor can there be any overlap. For example, if the maximum salary for one range is 30,000.00 then the next higher range must have a minimum salary of 30,000.01.

Encumbrance Percent

Enter the percent of the encumbered salary to be encumbered. This percentage is applicable only to either tax encumbrances or deduction encumbrances that use this salary range code.

Additional Encumbrance Amount

Enter any additional amount to be encumbered above the encumbrance percent. This amount is applicable only to deduction encumbrances (and not tax encumbrances) that use this salary range.

Defining Fringe Matrix Codes

Access the Encumbrance Fringe Matrix Code page (Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Fringe Matrix Code, Encumbrance Fringe Matrix Code).

Default Salary Range Code

Enter the overall default salary range code to use for employees who do not fall into any of the classifications that you define on this page.

Company and Pay Group

These fields are required for each row in the matrix.

You do not have to create entries for all of your companies: companies that you do not specifically configure use the overall default salary range code.

If all pay groups in the company use the same salary range code, create a row for any one pay group, then select the Company Default Salary Range Code check box.

If some pay groups use a salary range code other than the company default, create additional rows for those pay groups.

Employee Classification, Employee Type, and Full/Part Time

To assign salary range codes at a more granular level than company and pay group, you can create additional rows in the matrix and assign salary range codes based on the employee classification, employee type, and full/part time status.

Salary Range Code

Enter the salary range code to use for the specified company, pay group, employee classification, employee type, and full/part time status.

Company Default Salary Range Code

Select this check box to use the salary range code as the default for employees who do not fall into any of the more granular classifications that you defined for a specific company.

Setting Up Encumbrance Definitions

To set up encumbrance definitions, use the Encumbrance Definition component (ENCUMB_DEFN).

This section provides an overview of encumbrance definition setup and describes how to:

Access the Encumbrance Definition component.
Create an encumbrance definition for taxes and deductions.

Understanding Encumbrance Definition Setup

PeopleSoft Enterprise Human Resources uses the distribution information you enter on the Encumbrance Definition page to calculate an encumbrance amount for employer-paid taxes and employer-paid deductions. (The system doesn't calculate projected actuals.) It also uses this information to determine the funding sources for employer-paid taxes and deductions (but not for earnings: the funding source for encumbered earnings is defined on the Dept Budget earnings page).

If you choose not to encumber employer paid taxes and employer paid deductions, leave the Tax Distribution and Deduction Distribution sections of this page blank, but at a minimum, you must still establish each department on this page.

Page Used to Set Up Encumbrance Definitions

Page Name	Definition Name	Navigation	Usage
Encumbrance Definitions	ENCUMB_DEFN	Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Definitions	Create an encumbrance definition for taxes and deductions.
ChartField Detail	HMCF_HRZNTL_CFLD	Click the Edit ChartFields links on the Encumbrance Definitions page.	Use to select individual ChartField values or search for an existing combination code.

Accessing the Encumbrance Definition Component

When you select Encumbrance Definition from the Define Commitment Accounting, Setup menu, the following search page appears.

Using this search page, you can pinpoint the exact level of detail you want to see on the Encumbrance Definition page. Enter the SetID and Department of the encumbrance definition.

Select a Default Level by selecting one of the following options:

Appointment: Select if you are setting up the encumbrance definition at the appointment level. When you select this option, also select an EmplID. People may include full time employees, part time employees, contractors, and so on. Also indicate an Empl Record for this person.
Department: Select if you are setting up the encumbrance definition at the department level.
Jobcode: Select if you are setting up the encumbrance definition at the job code level. When you select this option, also select a valid Job Code.
Position: Select if you are setting up the encumbrance definition at the position level. When you select this option, also select a valid Position Number.
Position Pool: Select if you are setting up the encumbrance definition at the position pool level. When you select this option, also select a Position Pool.

Creating an Encumbrance Definition for Taxes and Deductions

Access the Encumbrance Definitions page (Set Up HRMS, Product Related, Commitment Accounting, Encumbrance Information, Encumbrance Definitions).

Combination Code

Both the Tax Distribution grid and the Deduction Distribution grids list the combination codes that you use for fringe encumbrances. The column that displays the selected combination code is read-only; to enter a combination code, access the Combination Code Description tab and click the ChartField Details link.

ChartField Details

Click the Edit ChartFields link to access the ChartField Detail page, where you can search for an existing combination code or select a unique combination of ChartFields.

The ChartField values are based on the general ledger ChartField values that you imported as part of the combination code.

See Editing ChartField Combinations in HRMS Transactions.

Funding End Date

You can optionally enter a funding end date for each combination code in both the Tax Distribution grid and the Deduction Distribution grid.

Funding End Date

Enter the date through which to create encumbrances. If you do not specify a funding end date, the encumbrance processes calculate fringe encumbrances through the end of the fiscal year. Otherwise, the encumbrance processes create encumbrances and pre-encumbrances up to the date you enter. This can result in partial-year fringe encumbrances for the current or future fiscal years.

Note. If the funding end date for earnings (as entered on the Department Budget Earnings page) is earlier than the funding end date for fringe encumbrances, the system does not calculate future fiscal year fringe encumbrances past the funding end date for earnings. This cut off occurs because fringe encumbrance calculations are based upon the salary encumbrances, and once the salary encumbrances end, there can be no fringe encumbrances.

If the Funding Source Information page has a funding end date for the combination code, and if the Department Budget Defaults page is configured to use that date as a default, then that date appears as a default value when you insert a row in either the Tax Distribution or Deduction Distribution grid. When checking to see if the Department Budget Defaults page is configured to use the default ending date, the system looks at the settings for the fiscal year that matches the fiscal year on the Encumbrance Process Control page.

Note. To activate funding end date defaulting on the Encumbrance Definitions page, you must set up the Encumbrance Process Control page.

See Defining Processing Parameters for Real-Time Budget Checking.

Tax Distribution

Employer Tax % or Fringe Matrix Code

For each combination code, specify the percentage of salary to encumber for taxes. You can either enter a fixed percentage in the Employer Tax % field, or you can select a fringe matrix code. A fringe matrix code matches the employee or position to the appropriate salary range code, which in turn provides a percentage that is based on the salary for the employee or position. (Any additional amount specified in the salary range code is disregarded for tax encumbrances.)

Because you must choose between entering a flat percentage and selecting a fringe matrix code, entering data in one of these fields makes the other one unavailable for entry. To switch which field you use, you must clear data from the field you don't want to use before you can enter data in the field that you do want to use.

Leave both fields blank if you do not want to generate encumbrances or pre-encumbrances for employer-paid taxes.

FY Encumbrance Tax Cap (fiscal year encumbrance tax cap)

Enter the encumbrance tax cap amount per fiscal year. The encumbrance calculation only encumbers employer paid taxes up to this amount per fiscal year. Any employer paid taxes above and beyond this amount won't be encumbered.

Deduction Distribution

Benefit Group

Select a benefit group.

Deduction %, Fiscal Year Deduction Amount, and Fringe Matrix Code

For each combination code, specify the percentage of salary to encumber for deductions in this benefit group. You can either one of the following:

A fixed percentage plus a flat amount: enter these in the Deduction % and Fiscal Year Deduction Amount fields.
A fringe matrix code: this matches the employee or position to the appropriate salary range code, which in turn applies a percentage and an optional additional amount based on the salary amount.

When you enter data for one of these options, the other option is not available for entry. To switch which option you use, you must clear data from the fields that you don't want to use before you can enter data in the fields that you do want to use.

Leave all three fields blank if you do not want to generate encumbrances or pre-encumbrances for employer-paid deductions.

Minimum Salary and Maximum Salary	Use these fields to define salary ranges that have different encumbrance percentages or additional amounts. There must not be any gaps in the ranges you set up, nor can there be any overlap. For example, if the maximum salary for one range is 30,000.00 then the next higher range must have a minimum salary of 30,000.01.
Encumbrance Percent	Enter the percent of the encumbered salary to be encumbered. This percentage is applicable only to either tax encumbrances or deduction encumbrances that use this salary range code.
Additional Encumbrance Amount	Enter any additional amount to be encumbered above the encumbrance percent. This amount is applicable only to deduction encumbrances (and not tax encumbrances) that use this salary range.

Default Salary Range Code	Enter the overall default salary range code to use for employees who do not fall into any of the classifications that you define on this page.
Company and Pay Group	These fields are required for each row in the matrix. You do not have to create entries for all of your companies: companies that you do not specifically configure use the overall default salary range code. If all pay groups in the company use the same salary range code, create a row for any one pay group, then select the Company Default Salary Range Code check box. If some pay groups use a salary range code other than the company default, create additional rows for those pay groups.
Employee Classification, Employee Type, and Full/Part Time	To assign salary range codes at a more granular level than company and pay group, you can create additional rows in the matrix and assign salary range codes based on the employee classification, employee type, and full/part time status.
Salary Range Code	Enter the salary range code to use for the specified company, pay group, employee classification, employee type, and full/part time status.
Company Default Salary Range Code	Select this check box to use the salary range code as the default for employees who do not fall into any of the more granular classifications that you defined for a specific company.