Many earnings and deductions - such as salary, pension deductions, and taxes - are discussed under specific functional headings, such as Salary and Grade Related Pay, or Savings and Retirement, or Payroll Statutory Deductions. In this area, we look at payroll earnings and deductions, such as wage attachments, that have not already been covered under other functional headings.
We also focus on additional setup required by Oracle Payroll for processing earnings and deductions. This setup includes the creation of formulas and balances. In some localizations, and for certain types of earnings and deductions, you can select template elements in the Configuration Workbench, or you can use the Element Design Wizard or template windows to generate all the components required for payroll processing, including elements, formulas, balances, and formula result rules.
Certain types of earnings and deductions require additional setup to enable special processing such as net-to-gross and proration, where this is enabled for your localization. Such setup is also discussed in this section.
Note: Mexico only: Oracle HRMS for Mexico does not support net-to-gross processing.
To get the most out of the earnings and deductions functionality of Oracle HRMS, you need to understand the following key concepts:
Pay values
Formulas
Frequency rules
Payroll balances
Earnings and deductions templates
Proration
Net-to-gross processing
Third-party payments
Oracle HRMS provides an integrated solution for Human Resources and Payroll. Therefore your setup of compensation and benefits supports both compensation management and payroll management.
Yes it can, through its use of formulas to specify calculations for each earnings or deduction. These formulas use values from the HRMS database and can include conditional logic to perform different calculations for different groups of employees. For example, they can check balances or employee status to control how to process the earning or deduction. Many of the formulas you need, for example for tax calculations, are supplied with Oracle Payroll.
The sequence of processing in a payroll run is determined by classifications, such as Pre-tax Deductions and Tax Deductions. You can also prioritize the processing for an individual employee, for example to determine the order in which deductions are processed for wage attachments.
You control whether any value is processed just once, in every payroll run, or periodically (such as once a quarter). Your formulas can also change or stop the processing of an earning or deduction during a run, based on employee status.
The system can accumulate balances of payroll run results or values entered before the run. You can accumulate a balance over different time dimensions such as current run, month, and year to date. You can review balances after payroll processing and use balances to control the processing performed in the payroll run.
Yes, you can define whatever additional balances your enterprise requires. For example, you may require a Pensionable Earnings balance for a defined benefit pension plan your enterprise offers employees.
Some values, such as salary, can be entered once and used in every payroll run (or periodic runs) until you need to update them. Other values, such as hours worked, need to be entered or calculated fresh for each run.
You can do one of the following:
Use default values (which may be different for groups of employees)
Enter values employee-by-employee
Enter values in a batch
Leave it to the system to enter values based on calculations performed during the payroll run
You can define validation rules to minimize data entry errors.
The wage attachments that you can process depend on the specific payments that apply to your legislation. Examples of payments include child support payments, educational loans, taxes to local authorities, alimony, and bankruptcy orders.
See: Third-Party Payments Overview
US Only:
When the court issues a release notice for a wage attachment, or if you receive a Form 668-D for a federal tax levy, you must end the employee's wage attachment. Oracle Payroll also stops processing wage attachments when the total owed is reached.
Oracle Payroll supports electronic funds transfer (EFT) of state child support garnishments for the state of Illinois. However, all states accept the Oracle EFT format, but normally require different data dependent upon individual state requirements. You can use the Illinois EFT format to send support payments electronically to all states. You need to include only the information required by the state in the file. You create a separate file for each state containing different routing and account numbers, so you need to set up a separate third-party payment method for each state.
Yes, if you operate in the US, you can use the Wage Attachment Fee Administration process to recoup costs. This process recoups costs in administering alimony, bankruptcy orders, employee requested attachments, and tax levies.
Using Wage Attachment Earnings Rules you can determine which earnings types are considered disposable income and liable for wage attachment deductions.
You can determine the overall priority of a wage attachment compared to other deductions, and you can also determine sub priorities. For example, if an employee has multiple court orders against them, you can ensure that Oracle Payroll deducts the most important order first.
The standard processing priority order for processing the various categories of attachment is the following:
Alimony
Child Support Orders
Spousal Support Order
Tax Levy
State Tax Levy
Bankruptcy Order
Credit debt
Debt Collection Improvement Act orders
Educational Loan
Garnishments
Employee Requested Payment
If enabled for your localization, you can use Oracle Payroll's Third Party Cheque Writer features to produce cheques for either organizations or individuals. Localizations that do not have Oracle Payroll's Cheque Writer features available can make payments by credit transfer.
You can use an external system to manage your wage attachments. If you want to make entries from that system into Oracle Payroll for payroll processing, you can use predefined deductions that come with Oracle Payroll.
Oracle Payroll fully supports the federal overtime calculation rule. The new functionality performs calculations for periods that are longer than a single workweek. You can configure the product to handle either Federal FLSA or State FLSA. You can also configure alternative overtime calculations as specified by selected states or by union contract.
Oracle Payroll uses the term Augments to refer to amounts paid which are in addition to the employee's regular rate of pay and which are considered to be non-discretionary, such as a commission or bonus. The new functionality prorates the augment across all periods during which it was earned.
Oracle Payroll comes with certain earnings types and deductions ready for you to use. You initiate the other earnings and deductions you need, as well as non-payroll payments such as expense reimbursements.
The predefined earnings types are:
These earnings types come with their elements, input values, balance feeds, formulas, processing rules and result rules already in place, and available for review.
Oracle Payroll comes with all current federal, state and local-level tax deductions already in place. Oracle has made an agreement with Vertex Inc. to provide this data.
To set up these deductions, you enter the appropriate information for each GRE in the Federal, State and Local Tax Rules window. You must create an element link for the VERTEX element, and the Workers Compensations elements. You do not need to create element links for the other tax deductions, unless you want to do specific tax balance adjustments. Your system administrator receives tax updates from Vertex Inc., and applies them as necessary.
Oracle US Payroll enables employers to calculate and process state tax levies, a type of involuntary deduction similar to the federal tax levy that is administered at the individual state level. For more information, see: Processing State Tax Levies
To supplement the earnings types and deductions included in your startup data, you initiate earnings types, payments and deductions that accord with your own compensation policies and practices. After you choose the appropriate processing and amount rules in the Earnings or Deduction window, the system generates:
An element for the earnings, payment or deduction, with all necessary input values, balances and balance feeds
A formula that utilizes the input values, together with a processing rule for the formula.
Once you create links for the earnings, payments and deductions you initiate and make entries to their input values, they are ready for use in payroll runs.
If the generated components of an earnings or deduction do not precisely meet your needs, you can make certain modifications to them. See: Customizing Generated Elements, Formulas, and Balances
Elements are processed during payroll runs according to the business rules for each element that you define at setup. Many of these rules are defined in formulas, written using Oracle FastFormula. Formulas specify how the payroll run should perform calculations for the element.
This is a basic formula for the calculation for the element Wages:
Wages = Hours Worked in Week * Wage Rate
The processed results for each element are called the run results. They become balance feeds for different balances. Some balance feeds are predefined to feed required statutory balances, and you can create your own balance feeds to your own user defined balances.
Formulas obtain some of the data they need from entries to their element's input values. The Wages formula above, for example, could locate each employee's hours worked as an entry to the input value Hours of the Wages element.
Formulas can also obtain information from database items. Much of the information in the Oracle HRMS database, including extensive information on employees and their assignments, is available to formulas as database items. For example, the Wages formula can locate each employee's wage rate as a database item.
There are several ways to vary the processing performed by formulas:
You can use conditional logic (IF..THEN) within a formula to perform different calculations depending on any information taken from input values or database items (such as length of service).
You can associate more than one formula with an element, each triggered by a different assignment status (such as Active Assignment or On Sabbatical).
You can use one formula but associate different formula results with each assignment status.
You can associate a skip rule formula with an element. This formula can check balances, other element entries, the assignment status or any other database items to determine whether the payroll run should process the element for an assignment.
Mexico only: Mexican implementations do not support skip rules by default. They must be enabled manually.
Formulas can produce different types of run results:
The direct result is the amount of an earnings or deduction, for example, the rand amount of wages an employee has earned that week. As well as calculating the amount to be paid, direct results can be used for costing purposes and analysis (such as tracking hours of overtime).
Indirect results, updates, and stops. A formula result can make an entry to the input value of another element for its formula to use. An indirect result is an entry to a nonrecurring element. An update is an entry to a recurring element. A stop puts an end date on a recurring entry of another element, to prevent it being processed in the run.
Order indirect. This result updates the subpriority of an element that has not yet been processed.
Messages. For example, you can write a formula that checks the length of a text string, and have it issue a message for payroll users if the string is too short or too long.
You set up formula result rules to determine the type of each result, and the names and input values of any other elements the result may affect.
Oracle Payroll comes with formulas specific to your legislation. Generally, you receive all the calculations required for employee tax withholding and employer taxes. When there are changes to taxes, you receive updates. You may also receive formulas for other earnings and deductions, depending on your legislation.
When you have occasion to look at the structure of an element online, you may see an input value named Pay Value at the top of its input value listing.
The Pay Value is different from other input values. Its purpose is to store an element's run result. For example, suppose the formula for the Wages element is:
Wages = Hours Worked x Wage Rate
If an employee whose wage rate is $10/hour works 40 hours in a week, the payroll run produces a run result of $400 for him or her. It stores this result in the element's Pay Value.
However, if you give an entry to a Pay Value before a run, this entry becomes the element's run result. For example, suppose you enter 40 in the Time Worked input value of the Wages element for an employee who earns $10/hour, but also enter $100 in the element's Pay Value. The run ignores the entry of hours worked and the Wages formula, and simply produces a run result of $100 for this employee.
Pay Values sometimes appear as the first input value for elements having the rule Process in Run, providing a place to store run results. For some elements with the Process in Run rule the Pay Value may be enterable, so you can put in it a run result amount when the element has no formula, or when you do not want its formula to process.
However for generated elements, the Pay Value is usually not enterable. This is because Oracle Payroll provides other ways for you to supply run result amounts for these elements when formulas are unnecessary, or when you need to add to, subtract from or replace calculated run results.
Oracle HRMS enables you to calculate proportionate earnings amounts whenever payroll-relevant data is changed during a payroll period, for example, if an employee joins or leaves the company during a payroll period or if an employee's pay grade changes during a payroll period. Oracle HRMS performs a proration calculation to ensure that the employees' earnings are calculated correctly after taking account of these changes.
If you want to prorate an earnings element, such as basic salary, assign an event group to it. An event group is a collection of proration points that share similar characteristics. You can create an event group to group together all proration points that affect an employee's salary, for example. This event group could contain proration points such as salary increases, assignment changes, and pay rate changes.
You then process the element using a formula that handles proration. You can either use a payroll formula that handles proration, or create a separate proration formula that runs after the main payroll formula only in payroll periods when a proration event occurs.
See: Sample Payroll Formulas Enabled for Proration (UK), Oracle HRMS FastFormula User Guide, Sample Proration Formula, Oracle HRMS FastFormula User Guide, and Writing Proration Formulas, Oracle HRMS FastFormula User Guide
When you define the event group, you select the events that will activate proration calculation, such as:
An employee joining or leaving the enterprise
Changes to pay grades or grade rates
Changes to pay scales and progression points
Changes to hourly or annual pay rates
Changes to working hours
Changes to allowances or deductions
Note: The proration unit can be periods, days, or hours. Proration can be applied to a monetary, time-based, or numeric amount.
Follow this process to set up earnings, deductions, and other items in the compensation package you offer to employees. There are additional steps for setting up the following types of compensation and benefits:
Salaries for Salary Administration
Absence elements and PTO Accrual plans
See: Setting Up Absence Management and Setting Up PTO Accrual Plans
Benefits
See: Standard and Advanced Benefits Setup: Overview and Setting Up Basic Benefits
Items subject to collective agreements
See: Setting Up a Collective Agreement, Oracle HRMS Enterprise and Workforce Management Guide
Define Validation
Define validation for entries of any new elements you are creating for information. You can also define validation rules to add to elements generated for payroll processing.
To restrict compensation entries to a list of valid values, define a new Lookup Type and add Lookup Values for this new lookup.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
To validate compensation entries using formulas, write a formula of type Element Input Validation.
See: Writing Formulas for Validation, Oracle HRMS FastFormula User Guide
Define Categories
If you need a new category within the Information classification for an element, add it in the application utilities Lookups window for the Lookup type US_INFORMATION.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
Define Elements for Information and Benefits
Define elements to hold information on tangible items distributed to employees. If you are not using Oracle Payroll, define elements to hold information on employee compensation and benefits.
See: Defining an Element for Information
See: Defining an Element's Input Values
Note: Every element you create automatically includes the Jurisdiction input value.
See also: Deleting an Element
Define frequency rules, if necessary, to determine the periods in which the element should be processed.
If you are using Standard or Advanced Benefits, also define elements for each activity rate calculation.
Define Earnings and Deductions for Payroll Processing
If you are using Oracle Payroll to process earnings and deductions:
Define additional tax categories, if you need them, by entering new Lookup Values for the following Lookup Types: US_INVOLUNTARY_DEDUCTIONS, US_VOLUNTARY_DEDUCTIONS, US_PRE_TAX_DEDUCTIONS, US_EARNINGS, US_SUPPLEMENTAL_EARNINGS, US_IMPUTED_EARNINGS, US_PAYMENT.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
Define or customize user tables, if deduction amounts will come from a payroll table you set up in the database. The following tables are predefined: Company Work Schedules, GTL Premiums, Shift Differentials, Wage Rates.
Initiate earnings, non-payroll payments, and deductions to generate elements, formulas, and balances.
Review the generated items and customize them if necessary. For example, you can customize the processing rules, add validation rules, and add new user balances.
Define Links for Predefined, Generated and User-defined Elements
If the payroll costs of an element should be distributed over other elements, define the distribution set.
Define element links to define one or more groups of employees who are eligible to receive an element.
See also: Running the Element Link Details Report
Make Entries
For elements without Standard links, make entries of your elements for all employees who should receive them.
You can review at any time the earnings types, non-payroll payments, and deductions you initiate in Oracle Payroll, as well as the earnings and deductions included with the system.
Note: US and Canada: When reviewing earnings or deductions, you may find two with the same name, the second however including the words "Special Inputs" (such as, Regular Salary and Regular Salary Special Inputs). The special inputs element exists to provide a convenient way to enter a change to an earnings or deduction before a payroll run. There is no special inputs element for net-to-gross earnings types.
Mexican implementations do not support special inputs.
To review the structures of earnings and deductions, use these windows:
Element
Formula
Formula Result Rules
US and Canada only: Earnings template
US and Canada only: Deductions template
Mexico only: Element Design wizard
To review processing and amount rules
For an earnings or payment, use the Earnings window/Element Design wizard, and query the earnings or payment.
For US and Canada, see: Initiating Earnings and Non-Payroll Payments, Oracle HRMS Compensation and Benefits Management Guide
For Mexico, see: Defining Earnings and Deductions Elements, Oracle HRMS Compensation and Benefits Management Guide
For a deduction, use the Deduction window/Element Design wizard, and query the deduction.
For US and Canada, see: Setting up Deductions
For Mexico, see: Defining Earnings and Deductions Elements, Oracle HRMS Compensation and Benefits Management Guide
To review input values and balance feeds
Using the Element window, query the earnings, payment, or deduction.
Click Input Values to review the input values.
Every element has the default Jurisdiction input value.
Click Balance Feeds to review the balance feeds.
To review formulas and formula result rules
Query the earnings, payment, or deduction in the appropriate window:
Formula window
See: Writing or Editing a Formula, Oracle HRMS FastFormula User Guide
Formula Result Rules window
When you initiate the earnings, non-payroll payments, and non-tax deductions your enterprise requires, Oracle Payroll generates:
Elements
Balances and balance feeds
Formulas for payroll calculations and element skip rules
Formula processing and result rules
You can modify these generated components to enhance their suitability or efficiency for use at your installation. Some modifications can be made even after processing has occurred, but most should be made before processing the element in a payroll run.
Important: If a generated element requires changes because of mistaken entries made when initiating the earnings or deduction, it is best to delete the results and re-initiate.
For example, if you select the wrong processing rule or amount rule when initiating an earnings or deduction, simply delete the generated components and begin again.
| Use This Window . . . | For . . . |
|---|---|
| Element | Processing rules include: termination rules, closed for entry, process in run, third-party payment, processing priority, and skip rule. |
| Frequency Rules | Defining Frequency Rules for recurring deductions |
| Use This Window . . . | For . . . |
|---|---|
| Further Element Information |
US only
Mexico only
|
| Use This Window . . . | For . . . |
|---|---|
| Input Values |
| Use This Window . . . | For . . . |
|---|---|
| Balances | Defining User Balances |
| Balance Feeds | Creating Balance Feeds |
| Use This Window . . . | For . . . |
|---|---|
| Formulas | Writing or Editing a Formula, Oracle HRMS FastFormula Guide, |
| Formula Result Rules | Modifying Formula Processing and Result Rules |
You use Information Time elements to enter information time for salaried employees. The system uses the information time to calculate the percentage of earnings and distribute the earnings over different jurisdictions. Information time does not affect gross earnings.
To define an information time element
Navigate to the Element Description window and set the effective date early enough to handle any historical entries.
Enter a unique name for the element, for example, Daily Information Time. The system uses this name for both the generated element and formula. The name must start with a letter of the alphabet, not a number or symbol and must not exceed a length of 31 characters.
Optionally enter a reporting name, for example, Daily Info Time, which is a short name that appears on reports and the statement of earnings. If you leave this field blank, Oracle Payroll uses the elements long name.
Select the classification of Information.
Check Nonrecurring as the element type.
Check Last Standard Process as the termination rule.
Check the box for Multiple Entries Allowed.
Click on the Input Values button and enter the following input values:
Jurisdiction
Select Character for the units, 1 for the sequence, and check the box for user enterable.
Hours
Select Number for the units, 2 for the sequence, and check the box for user enterable.
Click on the Extra Information button and select Yes for US Information Time.
Save your entries for the element.
Before you can begin using the element, you must configure an element link or links depending on your business requirements.
Oracle Payroll generates elements when you initiate earnings and deductions. Using the Element window, you can modify some of the processing information for these elements.
Do not change the following options:
Processing type (recurring or nonrecurring)
Indirect results only
The Additional Entry Allowed rule has no applicability for North American installations. It is available for use at sites outside North America, and benefit classifications do not apply in Canada.
To modify processing information
In the Element window, query the generated element you are modifying.
To control the processing of entries to the element after employee termination, you can select an alternative termination rule.
If the termination rule is Actual Termination, and the element's processing type is recurring, entries to the element close down on the employee's termination date. If the element's processing type is nonrecurring, entries close down either on the last date of the pay period in which the employee leaves or on the date the assignment ends (the final process date) if this is earlier.
If the termination rule is Final Close, entries to the element stay open beyond the actual termination date. This makes it possible to pay bonuses, severance pay, and so on, and to make year end adjustments after the employee's actual termination date.
Note: Recurring elements with the Final Close rule only process in runs after the Last Standard Process Date if there is also a nonrecurring entry to process in that run.
If the termination rule is Last Standard Process, entries to the element are not processed after the Last Standard Process date. The Last Standard Process date defaults to the last day of the pay period in which the employee is terminated, but you can set it to a later period when you terminate an employee. This is the appropriate rule for many recurring earnings types.
You can prevent the element from accepting any new entries, either temporarily or permanently, as of a certain date. Set the effective date to the date from which you want to close down the element, and check Closed for Entry. This does not affect any existing entries.
Note: Use the Closed for Entry feature with caution. When you perform certain important tasks in Oracle HRMS, the system may automatically create or delete element entries. These tasks include hiring and terminating people, and updating assignments. Therefore, if you check Closed for Entry for an element, this might prevent users terminating employees and updating assignments. If there are standard links for the element, it will also prevent users hiring people who are eligible for the element.
You can control an element's availability for processing in runs by selecting or deselecting the Process in Run box.
To make third-party payments from an earnings or deduction element, check the Third Party Payment box.
If you want to determine the order in which the element processes within its classification range, you can change the default priority number appearing in the Priority field. The payroll run processes elements with lower priority numbers first.
You can select a skip rule for the element in the Skip Rule field.
To select foreign currencies for element entries or run results
Define the balances required to hold amounts of the local currencies if you set up earnings types to produce payments in local currencies (instead of the ledger currency of the Business Group). The system does not generate these balances.
To make entries for the element in a currency other than the Business Group's ledger currency, select the currency in the Currency Input field.
For example, if the element represents a housing allowance of 500 pounds sterling paid monthly to a North American employee working in the UK, you select GBP as the input currency.
To produce run results in a currency other than the Business Group's ledger currency, select the currency in the Currency Output field.
To set qualifying conditions for receiving element entries
If there is a minimum age for employees to receive the element, enter it in the Age field.
If employees must complete a minimum length of service before receiving the element, enter a number in the Length of Service field and select a unit of measure (such as months or years) in the Units field.
To automatically enter the element and its default input values for all eligible employees, check the Standard box.
You cannot check this box for nonrecurring elements, or for those with the rule Multiple Entries Allowed.
Note: The qualifying conditions and Standard check box provide defaults for the element. You can override them for particular groupings of employees when you build links for the element.
To set an iterative priority
Pre-tax deductions are calculated iteratively to ensure that the maximum amount is deducted while ensuring that taxes and garnishments are paid in full, and net pay is zero or a positive amount. If multiple pre-tax elements are given to an employee, the element with the lowest processing priority (that is, the highest priority number) will be reduced first when there are insufficient earnings. You can also set an iterative priority.
Important: Iterative priority numbers must be in the reverse sequence of the processing priority numbers. This means that the element that is processed first is reduced last.
Choose the Advanced tab.
Enter a value in the Iterative Priority field.
The element with the lowest iterative priority number is reduced first. If this deduction is reduced to zero and net pay is still insufficient to cover taxes and garnishments, the element with the next lowest priority number is reduced, and so on.
Note: Do not choose the Exclude Balances button for pre-tax deductions. You use the Exclude Balances window when you are defining net-to-gross earnings; it is not relevant for pre-tax deductions.
To add or change further information
In the Element window, query the element you are modifying. Click in the Further Information field (in the lower right-hand corner of the window). This opens the Further Element Information window.
The fields that appear in this window depend on the primary classification of the element. Use these fields to make the entries described below.
Note: The names of certain balances that the system can accumulate for an earnings type or deduction appear in fields of the Further Element Information window. Whether a balance actually does accumulate depends on the selections made in the Earnings or Deduction window.
For example, the Toward Bond Purchase balance accumulates only for deductions for which you have checked the Series EE Bond box in the Processing region of the Deduction window.
To include the amount of the earnings in the calculation of the FLSA overtime base rate, select Yes in the field Include in OT Base. To exclude the amount of this earnings type, select No.
To include the hours worked for this earnings type in the calculation of the FLSA overtime base rate, select Yes in the field FLSA Hours. To exclude the hours worked for this earnings, select No.
See: Identifying the Earnings or Payment
Note: The application defaults the date in the fields based on if you check the FLSA Overtime Earnings and FLSA Overtime Hours on the Earnings window.
If you have defined an external organization with the classification Benefits Carrier, you can select the carrier name in the field Benefits Carrier.
See: Creating an Organization, Oracle HRMS Enterprise and Workforce Management Guide
To set the processing frequency of a benefit deduction
Select a processing period in the field Period Type. For example, for a benefit deduction that should be taken once each month, select the period type Calendar Month.
Note: When a benefit deduction does not have the same processing frequency as a payroll, give the deduction a frequency rule for the payroll using the Frequency Rules window.
For example, if a benefit deduction taken monthly should process in the second period of the month for the semi-monthly payroll, check 2 as this deduction's regular processing period for this payroll. You can enter or change deduction frequency rules for payrolls at any time.
See: Defining Frequency Rules.
To change a deduction's run type
Change the selection in the Processing Run Type field. The choices are:
Regular (process only in Regular runs)
All (process in both Regular and Supplemental runs).
To change a deduction's partial amount rule
Change the selection in the Partial EE Contributions field. The choices are:
Yes (The payroll run should take partial amounts for the deduction if employee funds are insufficient to take the full amount.)
No (The run should never take partial amounts for the deduction.)
To adjust or replace the Regular Salary or Regular Wages entry
If the element is nonrecurring, you can select how the element entry affects Regular Salary and Regular Wages. Notice that the Regular Salary or Wages entry is processed unchanged when there is no entry of this element.
Select a value in the Regular Earnings Adjustment field to specify whether the element entry replaces (T), adds to (A), or reduces (R) the Regular Salary or Regular Wages entry.
Use the Iterative Processing Rules window to specify how to use the iterative formula results for an element. For example, you can specify which formula result adjusts an input value to feed into the next processing iteration, and which result stops the iterations.
To define iterative processing rules
Enter or query the element in the Element window - making sure the Iterative Flag check box on the Advanced tab is checked - and choose the Iterative Rules button.
Select a formula result in the Return Name field, and select a rule type: Adjust, Message, or Stop.
For a message, select the severity level: Fatal error, Information, or Warning. A Fatal message creates an error for the assignment action.
For an Adjust type, select the input value to adjust.
Save your work.
If you are using the DEFAULT_GROSSUP iterative formula, then define the following rules:
Note: For South African users only: If you are using the ZA_DEFAULT_GROSSUP iterative formula, then define the following rules:
| Return Name | Rule Type | Input Value to Adjust |
|---|---|---|
| ADDITIONAL _AMOUNT | Adjust | Additional Amount |
| HIGH_GROSS | Adjust | High Gross |
| LOW_GROSS | Adjust | Low Gross |
| REMAINDER | Adjust | Remainder |
| STOPPER | Stop | -- |
| For South Africa users only: TARGET_AMOUNT |
Adjust | Amount |
Recurring elements may require frequency rules to determine in which pay periods they should process. For example, a monthly deduction might be processed in the third period of the month for weekly-paid employees and in the second period of the month for employees paid on a semi-monthly basis.
It is possible to set frequency rules to process once- or twice-yearly deductions on monthly, quarterly, or semi-annual payrolls. These rules' periods then refer to periods within a year (months, quarters or half years) instead or periods within a month. However, for infrequent deductions, you may prefer to define them as nonrecurring and use BEE to make entries when required.
Use the Frequency Rules window to define or change an element's frequency rules at any time.
US and Canada Payroll only: Use the Deduction form to define or change a deduction's frequency rules.
Mexico only: Use the Element Design Wizard to define or change a deduction's frequency rules.
To define frequency rules
Select the name of the payroll for which you want to define frequency rules.
In the Date field, you can override the default date that the payroll run uses to assess the frequency rule, if required.
For example, suppose you are defining frequency rules for a monthly deduction. If you select Effective Date for a Weekly payroll and check Processing Period 1, the payroll run only takes the deduction if the run's effective date is in the first week of the month.
Check the boxes for the processing period or periods in which you want the element to process for each payroll.
For example, if you want a monthly deduction to process in the second week of the month for a weekly payroll, check the box under 2 for that payroll.
Notice that some periods are not available for all payrolls. For example, a bi-weekly payroll can only have, at most, three periods a month, so periods 4, 5, and 6 are not relevant to this payroll.
Use the Formula Result Rules window to modify the formula processing rules assigned to an element. These rules are generated by the system when you initiate an earnings or deduction. If you substitute a modified formula for the one generated for an element, or write additional formulas for the element, you also need to modify or write new processing and result rules.
At minimum, an element needs one standard processing rule. This identifies the formula the payroll run uses to process the element for employees with an Active assignment status (and a Payroll system status of Process). It is also the default formula for other assignment statuses. However, you can define other processing rules if you need to use different formulas for assignments at other statuses. For example, you could have two rules for a Wages element: Standard Wages and Paid Training Leave.
Also use this window to define how each formula result is used by the payroll run.
To modify processing rules with elements
Set your effective date to the start date for the processing rule.
Select the element you want to modify. The element's description and classification automatically display.
Click Find to display any existing processing rules for this element.
In the Processing Rules region, modify the formula selections and assignment statuses for this element.
Note: If you select a formula with inputs that do not match the element, you will receive a warning message, but you can still save your rule. Remember to update the formula before running the payroll.
Save your entries.
To modify formula result rules for each processing rule
Click on a processing rule to select it.
In the Formula Results region, select a formula result name from the list of results specified when the formula was written.
Select the appropriate formula result type. There are five possible types:
Direct result: This is the element's run result (if you send the result to the element's pay value), or a direct result updating another of the element's input values.
Indirect result: This result passes as an element entry to another nonrecurring element not yet processed.
Message: The formula issues messages under certain conditions. For example, a formula can check a loan repayment balance and, if the balance is zero, issue the message "Loan is repaid." You read formula messages using the View Run Messages window.
Order Indirect: This result updates the subpriority of the element you select in the Element field.
Stop: This formula result uses the Date Earned of the payroll run to put an end date on a recurring entry of this or another element (which must be defined with multiple entries not allowed).
Update recurring entry: This result updates recurring entries of this or another element on the effective date of the payroll run. The receiving element must be defined with multiple entries not allowed unless you are passing a recurring element's entries to itself, that is updating another entry of the same element.
Important: If your result type is Update Recurring Entry, then any future dated changes to the entry will be overwritten by the results of the current payroll run.
For all formula result types except Direct Result or Message, select the name of the element to which you want to pass the formula result. This element must have a processing priority causing it to process after the element sending the result.
For the formula result types Direct Result, Indirect Result, and Update Recurring Entry, select the input value to update.
If you select Message as the formula result type, select a message severity level. There are three choices:
Fatal: When a message with this severity results from your formula, the run rolls back all processing for the employee assignment.
Warning: A message with this level of severity does not affect payroll processing but warns the user of a possible problem.
Information: A message with this level of severity simply gives information.
Correcting and Updating Processing Rules
When you add a formula result, it takes on the effective end date of its processing rule. Any date effective changes you make to existing processing rules can affect formula results as follows:
Update: If you update a processing rule or give it an effective end date, all the rule's currently effective and future-dated formula results automatically get identical end dates.
Correction: If you correct a processing rule, all its currently effective and future-dated formula results remain unchanged.
Future delete: If you delete all future changes scheduled for a processing rule, this also deletes any future changes scheduled for the rule's formula results.
Follow these steps if you want to set up your system for proration or retro-notification.
To complete basic setup for proration or retro-notification
In the Table Event Updates window, ensure that the events you want to use are already included in the required tables. Enter the table name. The lower half of the screen displays the fields that trigger proration or retro-notification if their values are changed.
If the table has already been defined but the required event is missing, create either an Update, Delete, or Insert event and enter the table row or column to which the event refers. You can only enter a column name if you are creating an Update event. Select the change type defined by the event.
Note: The Table Event Update window is not available in all localizations.
See: Making Table Event Updates, Oracle HRMS Payroll Processing Management Guide
If the events you require have not been defined in the Table Event Update window, set up the dynamic triggers for proration or retro-notification in the Dynamic Trigger Generation window. The triggers you need depend on the method you use to compensate your employees. For example, the tables required for compensation using Salary Administration are different from those required for compensation using pay grades. The tables you are likely to use are:
PER_ALL_ASSIGNMENTS_F
PER_ALL_PEOPLE_F
PAY_ELEMENT_ENTRIES_F
PAY_ELEMENT_ENTRY_VALUES_F
PER_SPINAL_POINT_PLACEMENTS_F
PER_GRADE_RULES_F
See: Defining Dynamic Triggers, Oracle HRMS Payroll Processing Management Guide
Note: French users: Ensure you enable the dynamic triggers for PAY_ELEMENT_ENTRIES_F and PER_ALL_ASSIGNMENTS_F.
Create an event group for your proration or retro-notification events. You must create the event groups before you can create your elements.
Select the Incident Register functional area in the Functional Area Maintenance window. Make sure that your triggers are included in this functional area. If your triggers are not included, insert them.
You must also activate the triggers according to legislation or business group. For more information, see: Grouping Dynamic Triggers into Legislative Functional Areas, Oracle HRMS Payroll Processing Management Guide
Setup for retro-notification should now be complete, meaning you can proceed to running the appropriate report. However, if you are setting up proration continue with the next steps.
See: Running the Retro-Notifications Report, Oracle HRMS Payroll Processing Management Guide
To set up the elements for proration
Create your proration element. US and Mexico users: Initiate the earnings type or deduction, then query the generated element in the Element window to add a proration group and, optionally, a proration formula.
Make sure that you select a proration group for each element
Select a proration formula if you are using a separate proration formula to handle proration events (rather than enabling your payroll formula to handle proration)
Select Actual Termination as the termination processing rule
Define the input values for the element. For example, if you were using the sample payroll formulas that are enabled for proration, you would create the following input values:
Amount for a salary management element
Date Worked for a spinal point/pay scale element
Annual Deduction for a deduction or allowance
Link the element to a specific payroll or payrolls. If you want the element to be used automatically each time the payroll is assigned, select the Standard check box. If you do not select this check box, you must enter the element for each assignment.
See: Defining Element Links, Oracle HRMS Compensation and Benefits Management Guide
To create the formula
Check that the database items to be used in your formula are available. If the required database items are not available, create them.
Create the proration formula or write a payroll formula that is enabled for proration.
To create a proration formula, see: Writing Proration Formulas, Oracle HRMS FastFormula User Guide
UK users: For examples of payroll formulas enabled for proration, see: Sample Payroll Formulas Enabled for Proration, Oracle HRMS FastFormula User Guide
For more information on writing formulas, see: Writing or Editing a Formula, Oracle HRMS FastFormula User Guide and Writing Payroll Formulas for Elements, Oracle HRMS FastFormula User Guide
Link the formula to your element in the Formula Result Rules window.
See: Defining Formula Processing and Result Rules, Oracle HRMS FastFormula User Guide
Attach the element to the salary basis if the salary is relevant for proration. Select the input value you created (such as Amount) in the Input Value Name field of the Salary Basis window.
You define an event group from the Table Event Group window. You use an event group to group together all proration or retro-notification points that affect an employee's salary, such as salary increases.
To define an event group
Enter a name for your event group.
Select one of the following event group types:
Proration for a proration event group
Retro for a retro-notification event group
Select the proration or retro period.
Save your entries.
Select the events that can trigger proration or retro-notification in the Datetracked Events region. To do this, select the update type, the table containing the data, and the table column.
Save your work.
Balances show the positive or negative accumulation of particular values over periods of time. They are fed either by the direct run results (that is, Pay Values) of elements processed in the payroll run, or by input values. For example, in North American installations, the input value Hours of the element Time Entry Wages feeds the balance Regular Hours Worked.
Balances exist for various time dimensions, such as current run, period to date, month, quarter to date, and year to date.
Balances also exist at different levels, such as assignment level or person level. Balances for individual employee assignments are at the assignment level (in North America, they can be at the assignment level within a GRE). If your enterprise permits employees to hold more than one assignment at the same time, you can hold balances at the person level. For example, a person level Gross Earnings balance is the sum of an employee's assignment level Gross Earnings balances.
You can select elements to feed a balance in three ways:
Select a primary classification. The run results of all elements in the classification feed the balance. However, you must have an input value of Pay Value if you want to create a feed between an element and a balance.
Select a secondary classification. You choose which elements from a primary classification (such as Earnings) are to feed the balance by giving these elements a secondary classification. Again it is the run results of the elements that feed the balance.
Note: Secondary classifications are not used in the North American versions of Oracle Payroll at this time.
Select an individual element. You can select either the run result or an input value to feed the balance. The input value must have the same unit of measure (such as hours or number) as the balance.
You can choose any number of classifications or any number of elements to feed a balance. However you cannot use a mixture of classifications and individual elements to feed a balance. When you select an element or classification as a balance feed, you specify whether the run results (or input values) should add to or subtract from the balance.
The balances and balance feeds for the elements supplied with Oracle Payroll are present in the system when you receive it. For North American users, when you initiate earnings types, deductions and other items that process in the payroll run, the system generates the appropriate balances and balance feeds together with the necessary elements.
You can define any additional balances your enterprise requires. For example, you may require a Pensionable Earnings balance for a pension plan your enterprise offers employees.
Important: You cannot have two or more elements with the same primary balance. This setup will cause incorrect elements to show up on reports or Statement of Earnings when the process uses balance reporting architecture.
You define primary balance using the following navigation:
Balance window (Total Compensation > Basic > Balance):
You define primary balance by selecting an element and an input value in the Primary Balance region in the Balance window. This type of balance is fed by a single element and can only be inserted if no balance feeds exist for the balance, with the exception of Balance Initialization feeds. When you create a primary balance, the associated feed is created automatically. No other feeds can be created for the balance. Note that if the Primary Balance region is disabled, then the primary balance functionality is not enabled for that localization.
Earnings or Deductions window:
When you create a balance, the balance gets created with name same as that of the element and the element input "Pay Value" gets added as a feed to this balance. This balance is considered as a Primary Balance for this element and can be seen from the Primary Balance field in the Element Description, Further Information window. Changing this Primary Balance in the Further Element Information will result in incorrect values to be reported. For example, Statement of Earnings (SOE) is designed to display the values based on the Primary Balance associated with the elements that are processed.
Oracle Payroll users can define secondary classifications to create subsets within primary classifications. You decide which elements, from a primary classification, are in each secondary classification, then you use the secondary classification to feed balances.
Note: If you are an HR-only user, you cannot define secondary classifications. For more information on user types and the associated HR: User Type profile option, see: User Profiles, Oracle HRMS Configuring, Reporting, and System Administration Guide.
To create secondary element classifications
Query a primary element classification. The check box indicates whether it is for nonpayment elements. These are elements that do not feed the Payments balance.
On the Priority, and Costing tabs, you can view the following information about the classification:
Priority: The processing range displays together with the default priority.
Costable: If this check box is checked, you can select all costing options on the element link for elements of this classification, including Not Costed.
Distributable: If this check box is checked, you can create a distribution set from elements of this classification over which you can distribute costs.
Debit or Credit: These option buttons display the cost type for elements in the classification, that is, whether the accounts they feed are to be debited or credited.
On the Frequency Rules tab, you can view the following information about the classification:
Enabled: If this check box is checked, you can define frequency rules for elements of this classification. The payroll run uses a frequency rule to determine in which pay periods it processes a recurring element.
Date: The date the payroll run uses, by default, to assess frequency rules in your localization. You can select a different date when you define a frequency rule.
Enter a unique name for the secondary classification you want to associate with the displayed primary classification. You can also add a description.
Select the Default check box if you want all elements in the primary classification to be in the secondary classification by default. Then, if there are any exceptions, you must manually remove these elements from the secondary classification. You can do this at any time using the Balance Feed Control window, which opens from the Element window.
Note: For some legislations, Oracle Payroll has already defined a number of secondary classifications. Some of these are default classifications, but not all. You cannot delete these classifications, and you cannot delete them from the Balance Feed Control window for predefined elements.
Use the Balance Feeds window to select balances to be fed by the input values of an element. Balances are either fed by whole classifications of elements or by individual elements, but not by both. Therefore, in this window you cannot select balances that are fed by classifications. You can query a balance in the Balance window and choose the Classifications button to view the list of classifications that feed it.
You can use an element to feed as many balances as you require.
To create balance feeds for one element
Set your effective date to when you want the balance feed to start.
Enter or query the element in the Element window and choose the Balance Feeds button.
In the Balance Feeds window, select the input value that you want to feed the balance with.
The list displays all the input values defined for the element. These input values may have different units of measure. When you select an input value its unit of measure displays in the Units field. To feed a balance with the element's direct run result, select Pay Value.
Select the balance you want the input value to feed.
The list restricts your choice to balances having the same unit of measure as the input value you selected.
Select Add or Subtract for the balance feed.
Note: Secondary classifications and balance feed controls currently do not apply to the US version of Oracle Payroll.
In the Balance Feed Control window, you can classify an element using secondary classifications. These determine the balances that the element feeds. You can query a balance in the Balance window and choose the Classifications button to view the list of classifications that feed it.
To select or remove secondary element classifications
Set your effective date to when you want the element to begin feeding the balances that the secondary classifications feed.
Enter or query the element in the Element window and choose the Balance Feed Control button.
In the Balance Feed Control window, delete any default secondary classifications you do not require for the element.
When this window opens, it displays any default secondary classifications for the element's primary classification. Unless they are predefined, you can delete any of these classifications, and you can change their effective start dates.
Select any non-default secondary classifications you require.
Defining a balance includes defining its feeds and dimensions. When selecting feeds for the balance you have to choose between specifying element input values directly, and selecting element classifications to determine the feeds. You cannot choose both methods together.
You can group similar balances - such as all earnings balances - in a single category for quicker and easier processing. Each localization has a defined set of categories. If there are no categories in the list of values, this means your legislation is not yet using the category functionality.
Balances often share a common relevancy to certain assignments. In some localizations, you can define base balances to imply a relationship between the balances that can be relied upon when processing and reporting. For example, "Loan Repayment" could be the base balance for "Loan Repayment Arrears".
You define balances in the Balance window.
To define a user balance
Do one of the following:
Enter a unique name and a reporting name for the new balance. If you do not provide a reporting name, the first seven characters of the balance name appear on reports.
Query any user balances you want to change.
Optionally, select a balance category in the Category field.
Australian Users: Attach all user-defined balances to the relevant balance category and to the _ASG_RUN and _ASG_YTD dimensions to populate the run balances. You must attach all user-defined allowance balances required to be reported individually on the Payment Summary to the Balance Category of Allowance and to the _ASG_LE_RUN and _ASG_LE_YTD dimensions.
New Zealand Users: You must assign a balance category for each element that you define.
Optionally, select a Base Balance.
Enter the unit of measure for the balance. The choices are days, hours (listed in different formats), integer, money and number. If you select money as the unit you must also select a currency.
Note: Do not select the Use for Remuneration check box. This displays the balance that has been predefined as the Remuneration balance. Only one balance within a legislation can have this value.
To define a primary balance - one fed by a single element - select an element and input value in the Primary Balance region (if this region is available for your localization).
Go to the Balance Feeds window or the Balance Classifications window.
Set your effective date to the start date for the balance feeds.
Select one or more elements to feed the balance. Only those elements whose input values have the same unit of measure as the balance are listed.
When you select an element, its classification is displayed. You can select elements with different classifications.
Select the input value that is to feed the balance.
For most payroll balances select Pay Value so that the element's run result feeds the balance.
Select Add or Subtract for the balance feed.
Select one or more element classifications and select Add or Subtract for each. The run results of all elements in the classification will feed the balance.
The list includes all the primary and secondary element classifications that are valid for this balance. If you select a secondary classification, you cannot also select its parent primary classification.
Note: Secondary classifications are not used in the North American or Singapore versions of Oracle Payroll at this time.
Choose the Dimensions button.
Select the dimensions you require.
New Zealand Users: For each new balance, you must attach the balance dimension _ASG_RUN for it to generate run balances.
Australian Users: Select the _ASG_RUN and _ASG_YTD dimensions for all user-defined balances. You must attach the _ASG_LE_YTD and _ASG_LE_RUN dimensions to the allowance balances required in the Payment Summary reports.
You can remove any dimension previously selected for a user-defined balance. You can also add dimensions to the startup balances included with your system, and later remove these additional dimensions. However, you cannot remove the dimensions that were predefined for the startup balances.
Note: To hold balances for a fiscal year that is different from the calendar year, you must supply the fiscal year start date for your Business Group.
Optionally, select the Grossup Balance check box for one of the dimensions, to make the balance eligible for grossup.
UK users: If you want to make the balance eligible for grossup, you must select this check box for the _ASG_RUN dimension.
Choose the Initial Feed button.
In the Initial Balance Feed window you can see details of the element and input value used for the Initial Balance feed. This feed is defined by implementation consultants prior to performing an initial balance upload at implementation time.
Choose the Attributes button.
Select an attribute definition and a dimension.
Balance attributes identify which balances can be used in which reports. Attributes can be predefined by localizations, created as a result of predefined defaults, or you can enter them in this window.
Note: For UK SOE Balances, ensure you attach the attribute to the Balances1 segment in the Business Group Information. Attach the attribute to each balance you want to display on the Online SOE. For every balance with an attached attribute, you must add individual balance to the SOE Details Information (in the Business Group Information).
The balances you attach to the SOE Details Information are defined at business group level, hence even if you change the user category profile it will not have any result on the data defined in the SOE Details Information.
Additional Information: Saudi Users: Oracle Payroll provides Saudi SOE Balance Attributes to view the SOE report. You can use the predefined balance attributes or create your own balance attributes.
For elements that require a net-to-gross (or grossup) calculation, you can specify which balances are included in the calculation. By default, all balances that can be grossed up are included. Use the Exclude Balances window to view these balances and to exclude any of them from the element's calculation.
US and Canadian users: You can exclude additional balances for individual element entries using the Gross Up Balances window (which opens from the Element Entries window).
To exclude balances from an element's grossup calculation
Enter or query the element in the Element window - making sure the Gross Up check box on the Advanced tab is checked - and choose the Exclude Balances button.
Select any balances that you want to exclude from the element's calculation. The list of values shows all balances that are eligible for grossup.
Note: A balance is eligible for grossup if the Grossup Balance check box is checked for one of its dimensions in the Balance Dimensions window.
Save your work.
Oracle Payroll enables you to make both single and recurring deductions from worker salary for third-party payments, and to specify either corporate bodies or individuals as payees. The deductions you can make include third-party payments and union dues.
You need to define payment methods for third-party payments and enter these for your payrolls.
How you pay third parties is determined by the Third Party Payment check box on the Element window when you define the deduction. If this check box is unchecked, you must pay third parties outside Oracle Payroll through Accounts Payable. If it is checked, you can pay third parties through Oracle Payroll, using a third-party payment method that you have defined.
Third-party payments is also known as Wage Attachments, Wage Garnishments, and Court Orders in different localizations, and your legislation may already have predefined elements to support each of these types of deduction.
Third-party payments are deductions from earnings incurred by court debts or fines. For example, payments of maintenance, child support or other legally incurred obligations. Oracle Payroll enables you to process these deductions from worker wages. Third-party payments in Oracle payroll are rule-driven, so you can tailor them to meet your business needs.
Oracle Payroll provides a robust answer to administering third-party payments, a type of involuntary deduction. Like other features in Oracle HRMS, third-party payments are rule-driven so that you can tailor the software to fit your business requirements.
Oracle Payroll features for third-party payments enable you to:
Create third-party payments
Determine which earnings are eligible for third-party payments
Administer fees for recouping processing costs of third-party payments (if administrative fees are payable for your legislation)
Establish the priority of payments if a worker has several third-party payment obligations that cannot be met in a single pay period
Stop making third-party payments when your worker has discharged the obligation
Oracle Payroll handles third-party payments using:
Elements and input values
Formulas
Balances and balance feeds
Depending on the country in which you operate, third-party payments are either provided for you, along with their associated elements, balances, balance feeds and formulas, or you can create your own. To create your own, enter some of the information you require into a template, and let Oracle Payroll generate the elements, balances and balance feeds for you. You create North American third-party payments using this second method.
You can only use one of the two methods, depending on your legislation, and not a mixture of both.
Each third-party payment is represented by one element. For example, the third-party payment of Court Order is represented by the element called Court Order.
Once you have created a third-party payment, or selected one of the third-party payments provided, you record all changes by entering input values for the third-party payment element.
You determine when to deduct each third-party payment from a worker's earnings using element classifications and processing sequences.
For example, you may need to ensure that Oracle Payroll always processes court orders before other deduction types. You may also need to prioritize the court orders further to ensure that Oracle Payroll always processes child support deductions before education loans. In this example, these third-party payments belong to an element classification with a low-numbered processing sequence. This ensures that they are processed before all other deductions.
Then, to ensure that Oracle Payroll always processes your child support payments before education loans, you could determine a secondary processing sequence. You do this in the Element Entries window.
If you don't specify a secondary processing sequence, third-party payments are processed in date order.
During payroll processing, the appropriate formula calculates the deduction from the worker's wages, and considers the correct percentage of the balance which stores the worker's net income.
Korea users only: While processing your third-party payment, use only the KR Monthly Payroll, KR Bonus Payroll, and KR Separation Pay Payroll processes. If you use QuickPay Run, the third-party payment will not be properly processed because you cannot specify its payout date.
You can use the predefined formulas to determine how third-party payments are processed in your organization. For example you can do the following:
Determine the amount of pay that is liable for third-party payment deduction. For example, the worker's take home pay after tax and other deductions, and the amount that is protected or exempt from third-party payment deductions. During payroll processing, a formula calculates the deduction from the worker's wages. During calculation, 50 percent of the Attachable Earnings balance is considered; this balance stores the worker's net income. Irrespective of the payroll run type, only 50 percent of Attachable Earnings will be considered.
Calculate the amount to withhold. The third-party payment court order provides the amount to be withheld per pay period and a total amount due. If you do not enter a pay period, Oracle Payroll defaults to the maximum amount allowed by law. The amount withheld can also include any arrears owing or any fees payable to the employer for setup and administration of the deduction.
Verify the amounts withheld. After Oracle Payroll has calculated all third-party payments for a worker, the relevant formula checks that all rules and limits applicable to these payments are accounted for. If it finds any violations, the formula makes adjustments to the previously calculated amounts, prorating them and creating arrears amounts if necessary.
See: Formulas and Payroll Run Results
Oracle Payroll uses balances to record the amount of third-party payments paid or amount remaining. Depending on your legislation, Oracle Payroll either provides the balances and balance feeds that you need for predefined third-party payment elements, or it generates them automatically.
The amount of court order debt paid at any time is held in an Inception-to-date (ITD) balance. For those elements that have multiple occurrences, this balance exists at element level, reflecting the need to keep track of how much has been paid for each separate occurrence. Otherwise the balance exists at assignment level.
The amount of the debt still outstanding is the difference between the amount in the ITD balance dimension and the Initial Debt input value.
For Assignment level ITD balance dimensions, you must ensure that, once the total debt has been repaid and the element has been given an end date for processing, that the balance is cleared back to 0.00. If you do not do this and a new element entry is given to the worker for the same court order type element, the formula finds the 'old' balance and the element is not processed correctly.
The attachable pay balances Run and Period balance are referenced within the formulas because of the possibility of there being more than one run in a period.
You enter the initial debt. The system then manages the deductions automatically and ends the process when the debt is cleared. If you do not enter a value for the debt the system continues to process the deductions each pay period as ongoing maintenance payments.
Local legislation determines the amount and type of earnings from which third-party payments can be deducted. Typically, there is a minimum amount of earnings below which you cannot deduct third-party payments. Similarly, there is a proportion of a worker's earnings that are considered liable to third-party payment deductions.
You can use Oracle Payroll to manage both kinds of third-party payment:
Where the total amount of the deduction is known in advance, for example, a fine.
Where the total amount is not fixed, but you must make a deduction from each salary payment, for example, child maintenance orders.
Depending on the third-party payment, and whether the deduction is ongoing or a diminishing balance, you can set a deduction end date. Alternatively you can set up the deduction so that Oracle Payroll stops processing it when the full balance has been paid.
You can also override these settings, for example, if you want to stop maintenance payments immediately before reaching the end date.
If a worker's third-party payment is still being processed after the worker has left the organization, then you must manually enter deposition-related information into the Deposition Info predefined element. This element is for informational purposes only. Your company will request the court that has mandated the third-party payment to stop the process, and the court will be sent the information contained in the element.
US users only:
Oracle Payroll provides the ability to consolidate individual third-party payments at the payee level. For example, if there are 20 employees with child support payments that need to be paid to the same child support disbursement unit, these payments can be "rolled up" into a single third-party check. A remittance listing of the individual employee payments that contribute to a particular third-party check is provided along with an additional report to ease reconciliation. The Third-Party Payments Rollup functionality groups all applicable third-party payments towards the same organization account, across all assignments so that it eliminates writing multiple checks to the same organization or initiating multiple direct deposit towards the same organization account.
For an overview of the Third-Party Payments Rollup functionality in Oracle US Payroll, see Third-Party Payments Rollup for US Payroll , Oracle HRMS Payroll Processing Management Guide (US).
For how to process Third-Party Payments Rollup, see Processing Third-Party Payments Rollup for US Payroll, Oracle HRMS Payroll Processing Management Guide (US).
The third-party payments that you can process depend on the specific third-party payments that apply to your legislation. Examples of third-party payments include child support payments, educational loans, taxes to local authorities, alimony, and bankruptcy orders.
The following table lists the deductions you can make using Oracle Payroll.
| Third-Party Payment | Legislation |
|---|---|
| Credit Debt/Garnishments | US |
| Bankruptcy Order | US |
| Federal Tax Levy (Local Tax Levies are not supported by Oracle Payroll) | US |
| State Tax Levy | US |
| Federal DCIA Order | US |
| Spousal Support Order, Child Support Order, and Alimony | US |
| Educational Loan | US |
| Employee Requested Payment | US |
| Court Orders and Arrestments | UK |
| Council Tax Attachments | UK |
| Court Orders | France |
| Maintenance Orders | Ireland |
| Variation Orders | Ireland |
| Interim Orders | Ireland |
| Compensation Orders | Ireland |
| Social Welfare Orders | Ireland |
Use this process to make third-party payments through Oracle Payroll. Third-party payments include:
Wage Attachments
Wage Garnishments
Court Orders
In Australia, you can also use this process to set up employer superannuation contributions. After payroll processing takes place, the pay value of the deductions element is paid according to the third-party payments method you selected.
To make third-party deductions from individual assignments
Create the organization or person to receive the third-party payment.
You create payee organizations in the Organization window, selecting the Payee Organization classification.
See: Creating an Organization, Oracle HRMS Enterprise and Workforce Management Guide
You create individual payees as contacts of the person making the deduction. In the Contacts window, check the Payments Recipient check box when you create the payee.
See: Entering Next of Kin and Other Contacts, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide
Link the third-party element to your payroll.
In the Personal Payment Method window, select a third-party payment method for the assignment. In the Payee region, select the payee you have created.
See: Entering Payment Methods for an Employee Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide
Create an element entry for the deduction.
See: Entering Third-Party Payment Information
In the Entry Values window, you enter details of payment, payee and payment method. Required entry information varies according to the kind of deduction you are making.
When you have completed these setup steps you can run a payroll to process the third-party payment that you have just defined.
Information about each Third-Party Payment that must be discharged against your worker is stored in a separate third-party payment element.
Third-party payments can include Wage Attachments, Wage Garnishments, and Court Orders and your legislation may already have predefined elements to support each of these types of deduction.
Use the Element Entries window to assign your worker a Third-Party Payment element.
To enter Third-Party Payment for a worker
Query your employee in the People window, and set your effective date to the day on which the third-party payment should commence for your worker.
In the Element Entries window, select the third-party payments element .
Enter costing information in the Cost Allocation KF window or choose Cancel.
Choose the Entry Values button to open the Entry Values window.
Enter the unique attachment sequence number of the third-party payment.
You must supply a unique attachment sequence number for your third-party payment; otherwise, your payroll run will fail. After your payroll run is successfully processed, in the Result Values window, you can identify the Results element created for your third-party payment by its attachment sequence number.
Enter the time you received the third-party payment and the unique case number assigned by the court administering the third-party payment.
Select the third-party payment's processing type.
Enter the third-party payment's sub-processing type and administering court's name. The sub-processing type is used by the system only for information and is not considered during calculation or administration of the third-party payment.
Enter the principal base and court fee base for the third-party payment.
If the third-party payment has an interest base, enter it. Enter the start and end dates for the interest base. The start and end dates for a third-party payment that has an interest base are only for information and have no bearing on administration or calculation.
Indicate whether or not a judicial decision statement of the obligation-release processing type has been received for the third-party payment and the date of such receipt. To set the Obligation Release field to Yes, you must update the field.
When the third-party payment's processing type changes to obligation release from any other processing type, you must select Yes in the Obligation Release field. You do not need to assign a new third-party payments element to the employee.
Select the third-party creditor for the court order from the list of values in the Payee Details field.
Save your work.
To enter interest bands
If the third-party payment has interest bands, then you need to specify them in the Further Element Entry Information window:
Click in the Further Entry Information field to open the Further Element Entry Information window.
Specify the start date, end date, base, and rate of each interest band. You can specify a maximum of five interest bands. A interest band is invalid if it does not have a start date. If an end date is not specified, the system uses the next applicable payout date.
Save your work.
To change processing type from provisional attachment to actual seizure and collection, actual all attachment
Some localizations enable you to specify whether a third-party payment is a provisional attachment, an actual seizure and collection, or an actual all attachment.
When the processing type of the third-party payment changes from provisional attachment to actual seizure and collection or actual all attachment, you must assign a new third-party payments element to the employee in the payroll-processing period in which the processing type changes.
In the Element Entries window, enter information pertaining to the new judicial decision statement.
If the third-party payment uses an interest base, enter the same values for the principal base, court fee base, and interest base that you entered for the old third-party payments element.
If the third-party payment uses interest bands, enter the same values for the principal base and court fee base that you entered for the old third-party payments element. While setting up interest bands, begin with the interest band within which the next payroll-processing date will fall. The start date of this band should be the last payout date for the old third-party payments element.
Select the case number for the old judicial decision statement for the third-party payment in the Further Element Entry Information window.
Save your work.
| Classification: | Earnings |
| Category: | Regular |
| Processing Type: | Recurring |
The earnings types Regular Salary and Regular Wages can process in the Regular run each period to produce regular pay for salaried and waged employees, respectively.
| Input Value | Purpose of Entry |
|---|---|
| Monthly Salary | Gives amount of employee's salary to formula. |
| Jurisdiction | Jurisdiction cannot be entered for this element. If you wish to override the default behavior of the Regular Salary element (i.e., tag the regular pay to a different jurisdiction) use the nonrecurring element, Time Entry Wages. |
| Input Value | Purpose of Entry |
|---|---|
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Jurisdiction | Jurisdiction cannot be entered for this element. If you wish to override the default behavior of the Regular Wages element (i.e., tag the regular pay to a different jurisdiction) use the nonrecurring element, Time Entry Wages. |
For information about the Wage Rates table, see: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
Working together with the Regular Salary and Regular Wages earnings are three additional elements, Time Entry Wages, Labor Recording and Regular Hours Worked.
| Classification: | Earnings |
| Category: | Regular |
| Processing Type: | Nonrecurring |
| Input Values | Purpose of Entry |
|---|---|
| Hours | Gives hours worked to Regular Wages formula. |
| Rate | Overrides rate appearing on Regular Wages. |
| Rate Code | Overrides rate code appearing on Regular Wages. |
| Shift | Gives formula shift designator, for locating shift differential in the Shift Differentials table if no entry exists for Rate or Rate Code. |
| Date Earned | For information only. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Separate Check | Yes signals that this earnings should be paid by separate check. Default is No. |
| Deduction Processing | Tax Only means, process tax deductions only for this earnings. Tax and Pre-tax Only means, process only these deductions for this earnings. Default is All. |
| Tax Separately | Default is No; if the value is Yes, then only the tax for this earnings amount is taken. |
For information about the Shift Differentials table, see: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
Time Entry Wages functions to receive timecard data through the Batch Element Entry (BEE) facility. As well as hours worked, it can receive overrides to existing Regular Wages entries, and other information affecting employees' pay. For example, if day shift workers temporarily work the evening shift at a plant in another state at a special wage rate, they enter on their timecards for the week not only hours worked, but also the location and rate code or shift designator.
These entries go via BEE to the Time Entry Wages input values Hours, Jurisdiction, Shift and Rate Code. The Regular Wages formula then uses these entries, rather than entries on Regular Wages and the work location information on the employees' records, to produce correct pay for the week.
Entries to Time Entry Wages also signal to the Regular Salary and Regular Wages formulas that waged employees required to submit timecards with hours worked each period have in fact done so.
| Classification: | Information |
| Category: | Labor Hours |
| Processing Type: | Nonrecurring |
| Input Values | Purpose of Entry |
|---|---|
| Hours | Holds entries of hours worked at a particular labor distribution or project accounting code. |
| Rate | Holds rate paid for the hours entered. |
| Rate Code | Holds rate code for the hours entered. |
| Shift | Gives formula shift designator, for locating shift differential in the Shift Differentials table if no entry exists for Rate or Rate Code. |
| Date Earned | For information only. |
Labor Recording functions also receives entries of time worked, and optionally other information, for salaried employees who submit timecards only for project accounting or labor distribution purposes. These entries usually go in through BEE, but you can make them manually as well.
| Classification: | Information |
| Category: | Regular Hours |
| Processing Type: | Nonrecurring |
| Input Value | Purpose of Entry |
|---|---|
| Pay Value | Receives entries of hours worked for use in reports. |
Regular Hours Worked functions to receive entries of each employee's hours worked as indirect results of the Regular Salary and Regular Wages formulas. You do not enter the hours worked - they are entered automatically during the payroll run. Oracle Payroll can then access these entries for use in reports such as the Statement of Earnings and Earnings Audit.
The payroll run passes information to this Information element as an indirect result of processing Regular Wages, Time Entry Wages, Overtime, or Shift Pay. The element holds information about the number of hours worked at a particular rate so that the statement of earnings can display earnings by hourly rate.
Link these elements to all payrolls during implementation. When you enter vacation or sick time into absence elements for employees who do not submit timecards (Timecard Required = No on the Statutory Information tab of the Assignment window), the payroll run creates indirect results for these elements. Oracle Payroll uses this information in reports such as the Statement of Earnings.
Note: This section summarizes the processing except for final pay to terminating employees. You can control how these earnings types process for terminating employees by selecting a termination rule for your business group or payrolls.
See: Business Groups: Selecting a Termination Rules for Seeded Earnings, Oracle HRMS Enterprise and Workforce Management Guide
See: Creating a Payroll, Oracle HRMS Payroll Processing Management Guide
The formula for these earnings types does the following:
Checks employee's assignment to see if timecard is required.
If timecard is not required
Calculates salary or wages due. Feeds results into Regular Pay balance for the employee.
Checks employee's work schedule or standard working hours to locate hours worked in period.
IF timecard is required because employee is salaried but must submit timecard with hours worked for project accounting/labor distribution recording
Checks whether Labor Recording element has received entries of hours worked.
IF no entries exist, issues message to this effect and does not calculate pay.
IF entries exist, enters hours and project accounting/labor distribution codes on employee's record. Sends hours worked to Regular Hours Worked information element, for reports such as Statement of Earnings and Earnings Audit.
ELSE IF timecard is required because employee must submit hours worked on timecard to receive pay
Checks whether Time Entry Wages element has received current entries of hours worked from timecard.
IF no entries exist, issues message No timecard entries exist and does not calculate pay.
IF entries exist, locates correct pay rate and calculates earnings due. Feeds results into Regular Pay balance for the employee. Enters hours and any other period-specific information on employee's record. Sends hours worked to Regular Hours Worked element for reports such as Statement of Earnings and Earnings Audit. Sends hours worked and rate paid to Hours by Rate element for reports such as Statement of Earnings.
| Classification: | Earnings |
| Category: | Overtime |
| Processing Type: | Nonrecurring |
The earnings type Overtime produces pay for overtime worked both at straight time rates and premium rates. You can provide the rate of pay for overtime work either as an entry to the input value Rate, or as an entry in the Wage Rates table, to be located by an entry to the input value Rate Code. Otherwise, the Overtime formula itself calculates the FLSA (Fair Labor Standards Act) overtime base rate.
See: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
For correct calculation of the FLSA overtime base rate, when you initiate an earnings type you must identify whether to include the pay resulting from the type in the overtime base rate calculation, and whether to count hours worked for the type as FLSA hours.
Important: . Oracle Payroll does not support payroll periods greater then a single work week if you use the predefined Overtime element. If you use this element you must perform manual calculations of the overtime amounts. If you create user defined elements, the system supports all payroll and overtime periods.
See:Overtime Elements
See: Identifying the Earnings or Payment
The following table describes the input values for the Overtime element.
| Input Values | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Overtime earnings run result. |
| Hours | Gives overtime hours worked to formula. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Multiple | Gives rate multiple for overtime hours to formula. |
| Date Earned | For information only. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Separate Check | Yes signals that this earnings should be paid by separate check. Default is No. |
| Deduction Processing | Tax Only means, process tax deductions only for this earnings. Tax and Pre-tax Only means, process only these deductions for this earnings. Default is All. |
The Overtime formula does the following:
Checks employee's job to see if it is exempt from overtime payments under Fair Labor Standards Act (FLSA) rules.
IF job is exempt
Issues message Job is exempt and stops payroll processing for the employee.
IF job is not exempt
Finds overtime rate using entry to Rate or Rate Code.
IF no entries exist
Calls function to calculate the overtime base rate. This function:
1) Determines pay this period for each earnings type entered for employee and identified as contributing to the overtime base rate.
For example, the following table shows two earnings types contributing to the overtime base rate:
| Earnings Contributing to Overtime Base Rate | Pay Amount |
|---|---|
| Regular Hours | $600.00 |
| Production Bonus | $200.00 |
| Total | $800.00 |
2) Determines hours worked this period for each earnings type entered for employee and identified as contributing to FLSA hours.
| Earnings Contributing to FLSA Hours | Hours Worked |
|---|---|
| Regular Hours | 40 |
| TOTAL | 40 |
Formula then produces direct result Overtime Pay:
= Overtime hours worked * overtime base rate
or
= Overtime hours worked * overtime base rate * Multiple.
Produces indirect result Straight Time Overtime Pay:
= Overtime hours worked * regular rate.
Also sends indirect result of hours worked and rate paid to Hours by Rate element for reports such as Statement of Earnings.
| Classification: | Earnings |
| Category: | Shift Pay |
| Processing Type: | Nonrecurring |
| Input Value | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Shift Pay run result. |
| Hours | Gives shift hours worked to formula. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Shift | Gives formula shift designator, for locating shift differential in the Shift Differentials table if no entry exists for Rate or Rate Code. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Date Earned | For information only. |
Employees receive earnings type Shift Pay instead of Regular Wages only when they work a shift other than their usual one. They record work on such a shift by entering a designator, such as E (Evening) or N (Night), on their timecards. Employees working their usual shift need not enter shift designators. They receive Regular Wages with wage rates that already include any applicable shift differential or multiplier.
Oracle Payroll includes this table for entry of shift differentials. For example, suppose day shift employees earn twice the day rate for the night shift, while evening shift workers earn 1.5 times their rate for night work. Workers from both shifts get three times their regular rate for the split shift. You make these entries in the Shift Differentials table:
| -- | D | E | N | S |
|---|---|---|---|---|
| Day | 10 | -- | 20 | 30 |
| Evening | -- | 10 | 15 | 30 |
When a formula for an earnings locates a pay rate or a rate code for pay, it looks also for a shift designator. It uses the designator to find the correct differential for the employee in the Shift Differentials table.
See: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
The formula for Shift Pay does the following:
Looks for rate to use to determine pay.
If entry exists for the input value Rate, multiplies shift hours worked by this rate to produce run result.
If there is no entry for Rate but entry for the input value Rate Code exists, uses code to find rate in Wage Rates table. Multiplies shift hours worked by this rate to produce run result.
If there is no entry for Rate Code, takes employee's regular rate from Regular Wages earnings. Uses shift designator to locate correct differential for regular rate in Shift Differentials table. Multiplies regular rate by differential to obtain shift rate. Multiplies shift hours worked by shift rate to produce run result.
Also sends indirect result of shift hours and shift rate to Hours by Rate element for reports such as Statement of Earnings.
Employees are eligible for paid vacation for certain number of periods during a year and once in a year all employees receive their full vacation entitlement (wages earned for paid vacation) on one pay date. Actual time-off or vacation occurs throughout the remainder of the year and employees do not receive pay in this vacation or time-off because the amount earned during vacation period is already paid in advance. Taxation of these vacation wages must be handled separately as these wages are earned in later periods but are paid in advance during the current period.
Oracle supports the following components to process advance vacation pay:
The Advance Vacation Pay earnings category supports taxation requirements of advance vacation pay. Elements created with this category are added as element entries. These elements capture advance vacation pay details, which are used to process advance vacation pay as per the taxation requirements.
The Advance Vacation Pay earnings category is available in the Earnings window (US Super HRMS Responsibility > Total Compensation > Basic).
| Classification: | Earnings |
| Earnings | Advance Vacation Pay |
| Processing Type: | Nonrecurring |
As employees receive advance vacation pay in a particular period of a year, the processing type is nonrecurring. The Process Once in Each Run is check box is automatically selected for the Advance Vacation Pay earnings category. You can use either the Flat Earnings or Hour*Rate*Factor calculation method in advance vacation pay processing.
The following table lists the input values for the elements created with the Advance Vacation Pay earnings category.
| Input Value | Required | Additional Information |
|---|---|---|
| Pay Value | No | This input value is fed to the Vacation Earnings balance. |
| Amount/Percentage/Hours*Rate | No | The input value depends on the calculation mode selected for earnings. For flat earnings it is Amount. For percentage earnings it is Percentage. For Hour*Rate*Factor, the following input values are applicable: Rate, Hours, and Factor. This input value is used to enter advance vacation pay wages (rate*hours). |
| No of Tax Periods | Yes | This input value records the number of periods for which taxation needs to be spread across. This input value is mandatory and a value must be entered for this input when the element entries are created. This input value is fed to the Vacation Periods balance. |
| Jurisdiction | No | |
| Deduction Processing | Yes | |
| Separate Check | Yes |
The following sections describe the balances available for Advance Vacation Pay.
The Vacation Earnings balance tracks advance vacation wages paid during a period. The pay value of all elements created with the 'Advance Vacation Pay' category is fed to this balance. The balance values are utilized in tax calculations when advance vacation pay elements are processed in a payroll run.
| Field | Field |
|---|---|
| Name | Vacation Earnings |
| Reporting Name | Vacation Earnings |
| Category | Earnings |
| Base Balance | NULL |
| Units | Money |
| Currency | USD |
| Use for Remuneration Check Box | Not Checked |
| Gross Up Flag | Not Checked |
| Legislation Code | US |
| Field | Value |
|---|---|
| Element | Every earning element with 'Advance Vacation Pay' category |
| Classification | Earnings |
| Input Value | Pay Value |
| Scale | +1 |
Following is a list of dimensions enabled for this balance:
| Dimension Name | Database Suffix |
|---|---|
| Assignment Default Run | _DEFAULT_ASG_RUN |
| Government Reporting Entity Month | _GRE_MONTH |
| Government Reporting Entity Quarter to Date | _GRE_QTD |
| Government Reporting Entity Year to Date | _GRE_YTD |
| Person within Government Reporting Entity Quarter to Date | _PER_GRE_QTD |
| Person within Government Reporting Entity Year to Date | _PER_GRE_YTD |
| Government Reporting Entity Run | _GRE_RUN |
| Government Reporting Entity Period to Date | _GRE_PTD |
| Person Period to Date | _PER_PTD |
| Person Month | _PER_MONTH |
| Person Quarter to Date | _PER_QTD |
| Person Year to Date | _PER_YTD |
| Person within Government Reporting Entity Run | _PER_GRE_RUN |
| Person within Government Reporting Entity Period to Date | _PER_GRE_PTD |
| Person within Government Reporting Entity Month | _PER_GRE_MONTH |
| Assignment within Government Reporting Entity Month | _ASG_GRE_MONTH |
| Assignment within Government Reporting Entity Quarter to Date | _ASG_GRE_QTD |
| Assignment within Government Reporting Entity Year to Date | _ASG_GRE_YTD |
| Person Run | _PER_RUN |
| Assignment-Level Current Run | _ASG_RUN |
| Assignment Period to Date | _ASG_PTD |
| Assignment Month | _ASG_MONTH |
| Assignment Quarter to Date | _ASG_QTD |
| Assignment Year to Date | _ASG_YTD |
| Assignment within Government Reporting Entity Run | _ASG_GRE_RUN |
| Assignment within Government Reporting Entity Period to Date | _ASG_GRE_PTD |
| Person within a Payroll and Government Reporting Entity Period to Date | _PER_PAYROLL_GRE_PTD |
The Vacation Periods balance tracks the number of vacation periods for which the advance pay is processed. The input value of 'No of Tax periods' of all elements created with the 'Advance Vacation Pay' category is fed to this balance. The balance values are utilized in tax calculations when advance vacation pay elements are processed in a payroll run.
| Field | Field |
|---|---|
| Name | Vacation Periods |
| Reporting Name | Vacation Periods |
| Category | Earnings |
| Base Balance | NULL |
| Units | Number |
| Currency | NULL |
| Use for Remuneration Check Box | Not Checked |
| Gross Up Flag | Not Checked |
| Legislation Code | US |
| Field | Value |
|---|---|
| Element | Every earning element with 'Advance Vacation Pay' category |
| Classification | Earnings |
| Input Value | No of Tax Periods |
| Scale | +1 |
Following is a list of dimensions enabled for this balance:
| Dimension Name | Database Suffix |
|---|---|
| Assignment Default Run | _DEFAULT_ASG_RUN |
| Government Reporting Entity Month | _GRE_MONTH |
| Government Reporting Entity Quarter to Date | _GRE_QTD |
| Government Reporting Entity Year to Date | _GRE_YTD |
| Person within Government Reporting Entity Quarter to Date | _PER_GRE_QTD |
| Person within Government Reporting Entity Year to Date | _PER_GRE_YTD |
| Government Reporting Entity Run | _GRE_RUN |
| Government Reporting Entity Period to Date | _GRE_PTD |
| Person Period to Date | _PER_PTD |
| Person Month | _PER_MONTH |
| Person Quarter to Date | _PER_QTD |
| Person Year to Date | _PER_YTD |
| Person within Government Reporting Entity Run | _PER_GRE_RUN |
| Person within Government Reporting Entity Period to Date | _PER_GRE_PTD |
| Person within Government Reporting Entity Month | _PER_GRE_MONTH |
| Assignment within Government Reporting Entity Month | _ASG_GRE_MONTH |
| Assignment within Government Reporting Entity Quarter to Date | _ASG_GRE_QTD |
| Assignment within Government Reporting Entity Year to Date | _ASG_GRE_YTD |
| Person Run | _PER_RUN |
| Assignment-Level Current Run | _ASG_RUN |
| Assignment Period to Date | _ASG_PTD |
| Assignment Month | _ASG_MONTH |
| Assignment Quarter to Date | _ASG_QTD |
| Assignment Year to Date | _ASG_YTD |
| Assignment within Government Reporting Entity Run | _ASG_GRE_RUN |
| Assignment within Government Reporting Entity Period to Date | _ASG_GRE_PTD |
| Person within a Payroll and Government Reporting Entity Period to Date | _PER_PAYROLL_GRE_PTD |
The 'PAY_US_VERTEX_VACATION' information element determines the Vacation factor using inputs of the Vacation elements. The Vacation Factor calculated using this tax information element is used to handle the taxation on the wages. This tax element is automatically triggered by the US_TAX_VERTEX tax element and it is not required to create element entries for this separately.
Following are the element details.
| Field | Value |
|---|---|
| Element Name | US_TAX_VERTEX_VACATION |
| Reporting Name | US_TAX_VERTEX_VACATION |
| Classification | Information |
| Processing Type | Non-Recurring |
| Processing Priority | Non-Recurring |
| Once Each period Flag | Yes |
| Legislation Code | US |
Following are the input value details:
| Field | Value |
|---|---|
| Input Value Name | Jurisdiction |
| Display Sequence | 1 |
| Mandatory Flag | No |
| Generate DB Item Flag | No |
| Unit of Measure | Character |
| Legislation Code | US |
The US_TAX_VERTEX_VACATION FastFormula defined for this element executes the logic to determine the vacation factor. This FastFormula contains logic to determine Vacation factor by accessing the vacation element entry details and corresponding balances (vacation earnings and number of tax periods).
Follow these steps to process Advance Vacation Pay:
Create a vacation earning element using the Earnings window with Advance Vacation Pay as the earnings category.
Create element links as appropriate.
For employee assignments eligible for advance vacation pay, add vacation element entries for the period in which vacation wages need to be paid. Provide number of vacation periods in the "No of tax periods" input field and vacation wages that must be paid using the Amount, Percentage, or Hours*Rate input.
Note:
You cannot add multiple vacation element entries in a single period. If you try to add multiple vacation element entries, then the application displays an error that multiple entries are not allowed for elements of the Advance Vacation Pay category. If there is a requirement, then calculate the combined result value of advance pay values and advance periods and add this value as a single element entry.
The application does not support the recovery of advance vacation period in subsequent periods.
| Classification: | Imputed Earnings |
| Category: | GTL Insurance |
| Processing Type: | Recurring |
Currently, employer-paid Group Term Life insurance premiums for insurance coverage up to $50,000 are tax-exempt. However premiums for coverage over $50,000 are taxable as imputed earnings.
The premiums for GTL coverage vary depending on the age of the insured person. They are maintained in the IRS Uniform Premiums table. Oracle maintains this table in Oracle HRMS with the name GTL PREMIUMS.
See: Predefined User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
The following table describes the input values for the GTL Imputed Income element.
| Name | Purpose of entry |
|---|---|
| Pay Value | Short-circuits formula and provides GTL Imputed Income run result. |
| Coverage Multiple | Gives formula the number by which to multiply employee's annualized salary to determine GTL coverage. |
| Coverage Amount | Gives amount of employee's GTL coverage to formula. Overrides any entry for Coverage Multiple. |
| EE Contribution | Gives formula amount of employee's contribution, if any, to payments of GTL Insurance premiums. |
(except for final pay to terminating employees)
The formula for the GTL Imputed Income earnings type does the following:
Determines employee's GTL insurance coverage amount, if necessary calculating annualized salary from pay information entered in Salary Administration window. Checks if amount exceeds $50,000.
IF no
Employee has no imputed income. No further calculations occur.
IF yes
Calculates coverage whose premiums are net taxable imputed income to the employee (Coverage amount - $50,000.00)
Checks employee's age. Locates monthly premiums by age group per $1.000 of coverage in the table GTL PREMIUMS.
Uses premiums to calculate employee's imputed earnings. If employee contributed to premium payments, reduces GTL imputed earnings appropriately.
| Classification: | Imputed Earnings |
| Category: | Personal Use of Company Car |
| Processing Type: | Recurring |
The imputed earnings Company Car represents the monetary value to an employee of his or her personal use of a company car. The calculation of this value occurs outside Oracle Payroll. You enter the calculated amount in the input value Imputed Amount.
The following table describes the input values for the Company Car element.
| Name | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Company Car Imputed Earnings run result. |
| Imputed Amount | Provides the externally-calculated amount of imputed earnings for personal use of a company car. |
The Company Car formula does the following:
Checks whether current processing is producing final pay for a terminating employee. If so, deletes entry of Company Car for the employee as of the run date of the current processing.
Create the user defined Regular Salary and Regular Wages elements using the Earnings window and select a calculation rule of Hours * Rate * Factor. You must also include an additional input value called Salary and associate the salary or wages element with a Salary Basis and Salary Administration.
Oracle Payroll processes a Reduce Regular element with both the seeded Regular Salary and Wages elements and with user defined elements associated with a Salary Basis and Salary Administration. The system creates the formula and the result rules for all earnings elements. You must perform a simple formula modification to enable this feature for a user defined element.
See: Initiating Earnings and Non-Payroll Payments
See: Reviewing Earnings and Deductions Structures
Oracle Payroll uses the term Augments to refer to amounts paid which are in addition to the employee's regular rate of pay and which are considered non-discretionary.
The FLSA functionality will prorate the augment amounts across all periods during which it was earned. For example, you pay employee commissions monthly, and the salary semi-monthly. The commission is evenly divided over the pay periods during the period it was earned with 50% allocated to each semi-monthly pay period.
See: Initiating Earnings and Non-Payroll Payments
See: Reviewing Earnings and Deductions Structures
| Classification: | Earnings |
| Category: | Overtime |
| Processing Type: | Nonrecurring |
The Straight Time Overtime element calculates the Straight Time portion of overtime earnings and adds the earnings to the regular hourly rate.
For correct calculation of the FLSA overtime base rate, you must identify whether to include the earnings in the overtime base rate calculation, and whether to count hours worked as FLSA hours. You select the FLSA Overtime Earnings and FLSA Overtime Hours check boxes to include the hours and earnings in the FLSA calculation
If the calculation rule is set to Hours * Rate * Factor, the system defaults the input value Multiple (or factor) to 1. Oracle suggests you make this input value non-user enterable or delete the input value to ensure the value remains at 1.
Best practice for entering Straight Time Overtime suggests you submit time with the date earned attribute. The system distributes the overtime for the pay period if date earned is not entered. If you enter date earned but not hours, the system determines the number of hours based on the work schedule/standard hours calculation.
See: Identifying the Earnings or Payment
| Input Values | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Overtime earnings run result. |
| Hours | Gives overtime hours worked to formula. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Multiple | Gives rate multiple for overtime hours to formula. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Deduction Processing | Tax Only means, process tax deductions only for this earnings. Tax and Pre-tax Only means, process only these deductions for this earnings. Default is All. |
| Separate Check | Yes signals that this earnings should be paid by separate check. Default is No. |
| Reduce Regular Earnings | |
| Reduce Regular Hours |
| Classification: | Earnings |
| Category: | Overtime |
| Processing Type: | Nonrecurring |
| Calculation Rule: | Premium |
The earnings type Premium produces pay for overtime worked at premium rates. The formula calculates the premium or blended rates as FLSA Earnings/FLSA Hours. The FLSA Allocated balances determine the blended rate. The formula compares the blended rate to the standard rate using work schedule/standard hours and salary administration. You must select a Premium Calculation Rule at the payroll level. You select Blended Rate or Higher of Blended Rate or Normal Rate. The formula multiples this rate by a factor of .5 to calculate the pay value. You can modify the formula and change the input valude to 1 to specify doubletime. Do not select the FLSA Overtime Earnings and FLSA Overtime Hours check boxes when you define the Premium element. See: Further Payroll Information Window, Payroll Processing Management Guide
If you enter a rate in the Rate input value, the rate overrides the calculation. If you enter a date earned, but not hours, the system determines the number of hours based on the work schedule/standard hours calculation.
| Input Values | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Overtime earnings run result. |
| Hours | Gives overtime hours worked to formula. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Multiple | Gives rate multiple for overtime hours to formula. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Deduction Processing | Tax Only means, process tax deductions only for this earnings. Tax and Pre-tax Only means, process only these deductions for this earnings. Default is All. |
| Separate Check | Yes signals that this earnings should be paid by separate check. Default is No. |
| FLSA Allocated Earnings | The calculation uses the earnings to determine the blended rate. |
| FLSA Allocated Hours | The calculation uses the hours to determine the blended rate. |
| Reduce Regular Earnings | |
| Reduce Regular Hours |
Oracle Payroll creates a FLSA Period Adjustment Element for all elements defined with the Premium calculation rule. The application automatically attaches a proration event called Entry Changes for Proration to thie element. The payroll process creates an adjustment element entry for an employee if the following two conditions are met:
The Time Definition spans multiple pay periods.
The Premium element does not contain an entry in the Rate input value.
You initiate the earnings types and non-payroll payments you need in accordance with your own compensation policies, by entering information about them in the Earnings window.
In response to your entries in this window, Oracle Payroll generates an element for the earnings or payment, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
The following earnings types are predefined in Oracle Payroll:
Regular Salary and Regular Wages
These types produces regular pay for salaried and hourly paid employees respectively.
Vacation Pay and Sick Pay
Oracle Payroll uses entries in these predefined elements for reports such as the statement of earnings.
Advance Vacation Pay
Oracle Payroll uses entries in this predefined element for reports such as the statement of earnings.
Overtime
This earnings type produces pay for overtime worked both at straight time rates and premium rates.
Shift Pay
Employees receive earnings type Shift Pay instead of Regular Wages only when they work a shift other than their usual one.
GTL Imputed Income
This earnings type represents an employee's imputed income from GTL insurance.
Company Car
This imputed income earnings type represents the monetary value to an employee of his or her personal use of a company car.
You can record hours worked, override rates, or shifts from timecards, using the predefined Time Entry Wages element. Entries to this element override the values on the Regular Wages element. For salaried employees, you can record hours worked for project accounting using the predefined Labor Recording element.
Oracle Payroll uses the predefined Regular Hours Worked element to record the hours worked for reports such as the statement of earnings. You can create a regular non worked hours element (such as jury duty) to record time spent on non-work activities. The system automatically reduces regular hours worked and regular wages so that the correct information is displayed on the statement of earnings.
Wages, overtime pay, and shift pay are typically calculated by multiplying an hourly rate by number of hours worked. Oracle Payroll captures this information for each rate that applies during the payroll period. So if an assignment has element entries paid at different rates during a period, you can display the earnings at each rate on the statement of earnings and online payslip.
This information is automatically available for predefined earnings types: regular wages, time entry wages, overtime, and shift pay. It is also available for any earnings type you initiate with the calculation rule Hours x Rate, or Hours x Rate x Multiple.
You can define earnings types of a fixed net amount and Oracle Payroll will calculate the additional amount you need to pay to cover taxes and other deductions.
If you need to delete elements you created with the Earnings template, do not use the Element window. Query the element from within the template and delete it from there.
See: Deleting an Element
The regular non-worked hours functionality enables you to date effectively reduce Regular Wages for earnings types you specify according to your business rules, such as jury duty, paid holidays etc.
The effects of reducing earnings using regular non-worked hours are seen on the employee's Statement of Earnings. When earnings are reduced for an earnings category such as jury duty, the SOE shows an amount and hours for the employee's regular work actually performed and an amount and hours for the regular non-worked hours.
For example, if a salaried employee, paid bi-weekly, reports 16 hours of jury duty time off this pay period, the employee's SOE might look like this:
| Regular Salary | 64 hours | $6400 |
| Jury Duty Pay | 16 hours | $1600 |
Note that the sum of the hours worked ("Regular Salary") and non-worked hours ("Jury Duty Pay") equals the regular hours (80 hours, in this example).
Without noting the regular non-worked hours difference, the same employee's SOE might look like this:
| Regular Salary | 80 hours | $8000 |
Important: Regular non-worked hours are distinct from the predefined earnings types that are used on accruals, such as Paid Time Off. Regular non-worked hours do not require any kind of accrual plan.
In response to the information you enter for an earnings type or non-payroll payment in the Earnings window, the system generates the essential components of the earnings or payment. These include:
An element whose structure includes the necessary input values and balance feeds
A formula prescribing the correct processing for the earnings or payment, together with the formula processing and result rules.
The following sections discuss the particular input values and rules that you can generate, and the circumstances under which they are used. These input values and rules control the following:
Overrides to the tax jurisdiction of an earnings type
The applicability of supplemental tax withholding to supplemental earnings types processed in Regular runs
Payment of an earnings type or non-payroll payment by a separate payment, issued in addition to the usual paycheck or direct deposit payment
The applicability of deductions to an earnings or payment: all deductions, or only tax deductions, or only tax and pre-tax deductions
The calculation rule used to determine the amount of an earnings or non-payroll payment.
Net-to-gross processing of an earnings type of a fixed net amount.
Initiating Earnings and Non-Payroll Payments
You must sometimes pay employees earnings for work performed in a tax jurisdiction other than their primary work location, or for work performed in prior periods. To permit you to correctly process such earnings, the structure of all the elements Oracle Payroll generates for earnings in the classification Earnings includes the Jurisdiction input value.
The input value Jurisdiction takes entries of locations different from employees' primary work location. The payroll run then finds the jurisdiction code (tax code) of this location in the system's table of jurisdiction codes, so it can process the earnings for this work using the correct tax information.
In Canada, the jurisdiction code is the Canada Post province abbreviation.
| Input Value Name | Purpose of Entry |
|---|---|
| Jurisdiction | Provides the location for work done somewhere other than the primary work location. Entry of a location here prompts system to find the location's tax code in the table of jurisdiction codes, and use it to override the code of the employee's regular work location when calculating taxes. |
Oracle Payroll includes two types of payroll runs, Regular and Supplemental. A payroll normally has just one Regular run each period (to produce the employees' regular earnings), but it can have many Supplemental runs each period (to process supplemental earnings and final pay for terminating employees as needed).
The default tax withholding method for Supplemental runs is supplemental withholding. However when these runs process final pay, they always use regular withholding for any regular earnings included in the final pay.
The default withholding method for Regular runs is regular withholding (Percentage or Annualized Wages withholding), but these runs can use supplemental withholding for any included supplemental earnings.
The following table summarizes the withholding method and use of each run type.
| Run Type | Withholding Method | Frequency and Use |
|---|---|---|
| Regular | Default is regular. Can use supplemental for supplemental earnings. | Regular runs are scheduled in advance to process the employees' regular and imputed earnings once each period. |
| Supplemental | Default is supplemental. Uses regular to process regular and imputed earnings in final pay. | Supplemental runs occur whenever necessary to process supplemental earnings and final pay for terminating employees. |
To identify supplemental earnings that Regular runs should process using supplemental withholding, Oracle Payroll generates all earnings types in the Supplemental Earnings classification with a Tax Separately input value. This input value has a default entry of No. If you change this entry to Yes for a supplemental earnings type, Regular runs use supplemental withholding when processing the earnings.
| Input Values Name | Purpose of Entry |
|---|---|
| Tax Separately | Default No means, apply run's default withholding method. Yes means, always apply supplemental withholding. |
You sometimes pay certain earnings or non-payroll payments by physically separate payments that employees receive in addition to their regular paychecks or direct deposit payments. For example, you might pay a special bonus or award, or a reimbursement for moving expenses, using a separate payment.
For control of separate payments, the elements generated for all earnings in the Earnings and Supplemental Earnings classifications, and for all payments in the classification Non-payroll Payments, include the Separate Check input value.
This input value has a default entry of No, matching the default entry of Never in the Separate Check region of the Earnings window.
You can change this input value entry back and forth between No and Yes for an earnings type or payment, using the Element Link window. For an individual employee, you can make an entry of No or Yes for this input value using the Element Entries window, to stop or enable a payment by separate payment.
| Input Value Name | Purpose of Entry |
|---|---|
| Separate Check | Yes signals that this earnings should be paid by separate payment. Default is No. |
| Tax Separately | Yes indicates that you would like Oracle Payroll to process this earning separately from the others (such as for taxation purposes). The default is No. |
The payroll run usually take all deductions against an earnings type or non-payroll payment, but there can be certain circumstances under which it should take only tax deductions or only tax and pre-tax deductions. So that you can exercise control over deductions processed for a payment, Oracle Payroll generates all earnings in the Earnings and Supplemental Earnings classifications, and all payments in the classification Non-payroll Payments, with the input value Deduction Processing.
The entry in this input value defaults to All (process all deductions), as does the entry in the Deduction Processing region of the Earnings window. You can change this default for an earnings or payment element on its links using the Element Link window, or for individual employees using the Element Entries window.
| Input Value Name | Purpose of Entry |
|---|---|
| Deduction Processing | Tax Only means, process tax deductions only for this earnings type or payment. PreTax and Tax Only means, process only tax and pretax deductions. Default is All. |
On the Earnings window, you select a rule that determines how Oracle Payroll calculates the amount of the earnings or payment. The system then generates the appropriate element input values. The available calculation rules are:
Flat Amount
Hours * Rate * Factor
Percentage of Earnings
Premium
Oracle Payroll generates earnings or non-payroll payments with this rule that include an Amount input value for entry of an amount. No calculations are necessary to determine the amount of this earnings or payment.
| Input Value Name | Purpose of Entry |
|---|---|
| Amount | Gives the formula the earnings or payment amount. |
Oracle Payroll generates earnings with this rule that include the Hours , Rate Code, Rate, and Multiple input values. Hours holds the number of hours worked at a particular rate or rate code. An entry in the Rate Code input value signals that the rates for this earnings come from the Wage Rates table. An entry of a rate to the input value Rate overrides entry of a rate code. With the multiple input value you enter a multiple for the calculation. For example, for a pay increase of 5% above the standard, you enter .05 in this input value.
| Input Value Name | Purpose of Entry |
|---|---|
| Hours | Gives formula the hours worked at each rate. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. If you leave this field empty, Oracle Payroll derives the rate based on:
|
| Multiple | Gives formula the multiplier to use for the calculation. |
Oracle Payroll generates elements for earnings with this rule with the input value Percentage, for entry of the percentage to use in the calculation.
| Input Value Name | Purpose of Entry |
|---|---|
| Percentage | Gives formula the percentage to use. |
For a salaried employee, the formula for this rule locates the employee's regular monthly earnings as an entry in the Monthly Salary input value (Periodic Salary in Canada) of the earnings Regular Salary.
For a waged employee, it calculates the regular earnings in a pay period by finding the employee's wage rate and multiplying it by the hours normally worked in a pay period. It locates the employee's usual hours worked by referencing the work schedule or, if there is none, the standard working hours for their assignment. It finds the wage rate by referencing, in this order:
The employee's salary basis
The rate code entered for the employee for the earnings Regular Wages
The rate entered for the employee for Regular Wages.
See: HR Organizations: Entering a Work Schedule, Oracle HRMS Enterprise and Workforce Management Guide and Business Groups and HR Organizations: Work Day Defaults, Oracle HRMS Enterprise and Workforce Management Guide
The Premium calculation rule calculates overtime premium and uses the blended rate for non-exempt employees. Oracle Payroll generates elements for overtime earnings with this rule with the input values of FLSA Allocated Earnings and FLSA Allocated Hours to use in the calculation.
| Input Value Name | Purpose of Entry |
|---|---|
| FLSA Allocated Earnings | Gives formula the FLSA allocated earnings |
| FLSA Allocated Hours | Give the formula the FLSA allocated hours |
The formula uses the allocated balances to determine the blended rate. The Premium calculation rule determines if the calculation uses the standard rate or the blended rate. The formula applies a factor of .5 to calculate the pay value amount.
Oracle Payroll supports Net to Gross processing of earnings elements. For example, you can define a bonus payment that is a fixed net amount. Oracle Payroll calculates the gross amount needed to meet the net pay. You define which taxes and other deductions the employer is willing to pay by selecting the balances that can be used in the net-to-gross processing.
When you define an earnings type for net-to-gross processing, the application generates the element, formula, balances, and processing rules that you require. You can configure these, if required.
The following three formulas are used in net-to-gross processing:
US_ITER_GROSSUP (for US) or CA_ITER_GROSSUP (for Canada)
This is the iterative formula that calculates the amount that the employer must pay in addition to the desired net amount.
<element_name>_GROSSUP_FLAT_AMOUNT
This formula adds the additional amount returned by the iterative formula to the desired net amount to return the element's gross pay value.
FIT_GROSSUP_ADJUSTMENT_CALC (for US) or FED_GROSSUP_ADJUSTMENT_CALC (for Canada)
This formula runs after normal processing to adjust the Federal Income Tax balance so that actual net pay is exactly equal to the desired net minus any balances that were excluded from the calculation.
Net-to-gross elements are always processed separately, after the main payroll run has processed.
When you initiate a net-to-gross earnings type, Oracle Payroll creates the element input values shown in the following table.
| Input Value Name | Purpose of Entry |
|---|---|
| Pay Value | Oracle Payroll returns the gross pay to this input value when it has completed the net-to-gross calculations |
| Amount | Gives iterative formula the desired net pay |
| Low Gross | Used by the iterative formula to hold the lower gross pay guess, to feed into the next iteration of the formula |
| High Gross | Used by the iterative formula to hold the higher gross pay guess, to feed into the next iteration of the formula |
| Remainder | The amount by which the additional pay to be paid by the employer (gross minus desired net) differs from the total of the balances that are eligible for grossup processing. Returned by the iterative formula. |
| To Within | The amount by which actual net can differ from desired net after normal processing. (Another formula runs at the end of normal processing to adjust the FIT balance to ensure that actual net equals desired net.) |
| Method | The method of iterative calculation: binary or interpolation. The default is interpolation. This determines which function the iterative formula calls. |
| Additional Amount | The amount to add to desired net to calculate gross pay. Returned by the iterative formula. |
| EI Hours (Canada only) | To enter the hours associated with the payment so they will be reflected in the Record of Employment. For reporting purposes only. The application creates this input value if you check the EI Hours box on the Earnings window. |
The formulas for net-to-gross processing do the following:
The iterative formula takes as input the desired net amount (Amount input value), the amount by which net can diverge from the desired amount (To Within input value), and the method of calculation (Method input value).
In the first run it sets the lower gross limit to the desired net amount, and the higher gross limit to twice the desired amount. Then it runs a function to provide the first guess of the gross. The formula returns three values-low gross, high gross, and additional amount-to the element's input values.
The element's payroll formula runs (<element_name>_ GROSSUP_FLAT_AMOUNT). It adds the additional amount to the desired amount to create the gross and returns this value to the element's pay value for the payroll run to process. It also sends the desired amount as an indirect result to another element (FIT_GROSSUP_ADJUSTMENT in the US, FED_GROSSUP_ADJUSTMENT in Canada).
In the next iteration, the iterative formula compares the additional amount to the total value of the balances that are available for grossup for this element entry. The additional amount must not differ from this balance total by more than the amount specified in To Within.
If the additional amount equals the balance total, the iterative processing ends.
If the additional amount is above or below the balance total by an acceptable margin, the processing ends and the formula returns the remainder (additional amount - balance) to the element's Remainder input value.
Otherwise, the formula runs the function to get a better guess for gross, using the remainder to determine by how much to change the guess. The formula checks the results in another iteration.
After all iterative processing, the formula for FIT_GROSSUP_ADJUSTMENT (US) or FED_GROSSUP_ADJUSTMENT (Canada) deducts the desired net amount from actual net calculated in this run plus balances that were excluded. The difference is the amount by which Federal Income Tax must be adjusted to pay the required net amount.
The FIT_GROSSUP_ADJUSTMENT element in the US and the FED_GROSSUP_ADJUSTMENT element in Canada feeds the FIT Withheld Balance with the small sum required to adjust calculated net to be the same as desired net. To ensure there are no small discrepancies in your costing information, link and cost the adjustment element in the same way as your FIT element.
To initiate an earnings type or non-payroll payment, use the Earnings window.
If you need to add a category for the earnings or payment type you are initiating, use the application utilities Lookups window to enter additional categories for these Lookup types:
US_EARNINGS
US_SUPPLEMENTAL_EARNINGS
US_IMPUTED_EARNINGS
US_PAYMENT.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
If necessary, enter rules to control payments by separate check, and to limit the deductions processed against the earnings or payment
If necessary, modify the generated components
Define element links for the generated element(s).
Important: Do not select frequency rules for an earning. Frequency rules should only be selected for voluntary deductions.
Important: If you make mistaken entries when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings or payment.
You define the earnings types and non-payroll payments you need for your compensation policies using the Earnings window.
Once you've entered your earnings types and non-payroll payments, Oracle Payroll generates an element for the earnings or payment, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
To identify, classify, and categorize the earnings or payment
Set the effective date early enough to handle any historical entries. You cannot enter an earnings or payment for employees before its effective start date.
Enter a unique name for the earnings or payment, for example, Quarterly Bonus Payment. The application uses this name for both the generated element and formula. The name must start with a letter of the alphabet, not a number or symbol, and must not exceed a length of 31 characters.
Optionally enter a reporting name, for example, Qtrly Bonus, which is a short name that appears on reports and the statement of earnings. If you leave this field blank, Oracle Payroll uses the element's long name.
Select the correct classification and category. The classification and category of an earnings or payment help to determine the tax rules and other rules and procedures that apply to it.
If you selected the classification Alien/Expat Earnings, select an Alien Supplemental Category. Otherwise, you can skip this step.
The application uses the tax rate of the category you selected in the previous step for the earnings that come under the treaty benefit. Any earnings that are not recognized under the treaty benefit will be taxed according to the supplemental category you select in the Alien Supplemental Category field.
The classification of the earning or payment determines the default processing priority of the element in the payroll run. The payroll run processes elements with lower priority numbers first. You can optionally change the default priority to change the order Oracle Payroll uses to process the element.
To create an earnings element for Fair Labor Standards Act (FLSA):
Select the FLSA Overtime Earnings check box to include the earnings in the calculation of the FLSA overtime base rate.
Select the FLSA Overtime Hours check box to include the hours in the calculation of the FLSA overtime base rate.
See: Overtime
See:Overtime Elements
If you are creating a regular non-worked hours earnings type, select Reduce Regular. See: Creating Regular Non-worked Hours.
If you are creating a net-to-gross earnings type, select Grossup. See: Creating a Net-to-Gross Earnings Type
Select Standard Link only if Oracle Payroll should automatically enter the earnings or payment, with its default input value entries, for all eligible employees.
Select Student Earnings to create the Student Earnings element. When you select the category Student Earnings, HRMS automatically selects the Student Earnings and Total Reached Stop Rule check boxes.
Select Total Reached Stop Rule to create the Maximum Amount input value to the earnings element. HRMS ends the earnings element when the specified maximum amount is reached.
Select Special Input Element to generate the Special Inputs element, which accepts additional or replacement amounts for a particular payroll run. This element is nonrecurring. You must link it to the employee assignment for a particular payroll run. By default, this check box is not selected.
To enter processing rules
On the Standard tab, select the appropriate calculation rule. The formula names appearing in the list of values depend on the processing type of the earnings or payment. The basic calculation rules listed are:
Flat Amount, if you enter the earnings or payment amount and no calculation is necessary
Hours * Rate * Factor, if Oracle Payroll calculates the amount by multiplying hours worked by a wage rate and a multiplier.
Hours * Rate * Multiple, if the amount is calculated by multiplying hours worked by a wage rate and a multiplier
Percentage of Earnings, if Oracle Payroll calculates the amount is by multiplying the salary or the wages by a percentage
Premium, if Oracle Payroll calculates the amount is by applying a factor of .5 to calculate the pay value amount.
Select Recurring or Nonrecurring as the processing type.
Select Recurring if entries to the input values of this earnings type or payment, once entered for an employee, should process each period until you change them or they reach their end date. Select Nonrecurring if this earnings type or payment should process only when it receives new entries in a period.
Select a termination rule to control the processing of entries to the element after employee termination:
If the termination rule is Actual Termination and the element's processing type is recurring, entries to the element close down on the employee's actual termination date. If the element's processing type is nonrecurring, entries close down on the last date of the pay period in which the employee leaves, or on the date the assignment ends (the final process date) if this is earlier.
If the termination rule is Final Close, entries to the element stay open beyond the actual termination date. This makes it possible to pay bonuses, severance pay, and so on, and to make year end adjustments after the employee's actual termination date.
Note: Recurring elements with the Final Close rule only process in runs after the Last Standard Process Date if there is also a nonrecurring entry to process in that run.
If the termination rule is Last Standard Process, entries to the element are not processed after the Last Standard Process date. The Last Standard Process date defaults to the last day of the pay period in which the employee is terminated, but you can set it to a later period when you terminate an employee. This is the appropriate rule for many recurring earnings types.
Managing Separate Check Payments and Limiting Deduction Processing
To limit deduction processing against an earnings or payment
Make a selection in the Deduction Processing region. The default is All (all deductions process against the earnings type or payment). For only tax deductions to process, choose Tax Only. For only tax and pretax deductions to process, choose PreTax and Tax Only.
Save your work.
To set up payment by a physically separate check
Choose Yes in the Separate Check region. The default is No.
Save your work.
If you want employees' statements of earnings to show hours actually worked and any regular non-worked hours (such as time on jury duty or paid holidays), you create a regular non-worked hours earnings type.
Regular wages or salary are reduced for employees who have entries for regular non-worked hours. The sum of the worked hours and regular non-worked hours is equal to the regular hours.
To create regular non-worked hours, first create an earnings category for reducing regular wages, using the application utilities Lookups window. Then set up an earnings type using the Earnings window.
Important: The earnings category "Regular" cannot be used with this functionality. You must use a special earnings category.
To create an earnings category to reduce regular wages:
In the Lookups window, query US_EARNINGS in the Type field.
Enter a unique code for the earnings category in the Code field.
Enter a name for the earnings category, such as "Regular Non-Worked" in the Meanings field.
This name will display in the list of values for the earnings category.
Select an appropriate access level.
Save the earnings category.
To create a regular non-worked hours earnings type:
Set your effective date early enough to handle any historical entries you may want to make.
Identify the earnings.
The earnings classification must be either Earnings or Supplemental Earnings. The earnings classification cannot be Imputed Earnings or Non-Payroll Payments.
Enter calculation rules for the earnings type.
You must select either Hours_X_Rate or Hours_X_Rate_Multiple. You cannot select a flat amount or a percentage of regular earnings.
Check the Reduce Regular check box.
If necessary, enter rules to control payments by separate check, and to limit the deductions processed against the earnings or payment.
Save your work.
Review and if necessary, make changes to the components generated for the earnings.
See: Reviewing Earnings and Deductions Structures
Important: If you make mistakes when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings.
To disable a regular non-worked hours earnings type, use the Further Element field in the Element window.
To disable a regular non-worked hours earnings type
Query the earnings type you want to disable.
Click in the Further Information field.
Change the value of the Reduce Regular field from Yes to No.
Save your work.
For some earnings types, the payroll run calculates the gross amount based on a fixed net amount to be paid to the employee. For example, you might want to ensure a certain take-home bonus amount, and be willing to pay some or all of the taxes and other deductions that apply to the bonus.
To create a net to gross earnings type, use the Earnings window.
To create a net to gross earnings type
Set your effective date early enough to handle any historical entries you may want to make.
Identify the earnings.
The earnings classification must be Supplemental Earnings.
Check the Grossup check box.
Select the calculation rule GROSSUP_FLAT_AMOUNT_NONRECUR (US) or Flat Amount for Net to Gross (Canada). This generates a formula called <earnings name>_GROSSUP_FLAT_AMOUNT, which you can configure if necessary.
Select Yes in the Separate Check region (US) or Separate Payment region (Canada) if you want the earning to be paid separately.
Choose the Grossup Processing tab.
Review the list of balances that are eligible for grossup and clear the Include check box for any balances that you want to exclude from the grossup processing.
Note: You can exclude additional balances for individual element entries using the Gross Up Balances window (which opens from the Element Entries window).
Canada only: Indicate if this element is recurring.
Save your work.
Review the components generated for the earnings.
See: Reviewing Earnings and Deductions Structures
If necessary, make changes to the generated components. You cannot change these components using the Earnings window.
See: Customizing Generated Elements, Formulas, and Balances
Important: If you make mistakes when initiating an earnings or payment so that the components generated for it need correction, delete all the generated components and re-initiate the earnings.
You initiate the non-tax (pre-tax, benefit, voluntary) deductions you need by entering information about them in the Deduction window.
You can initiate deductions for benefits and deductions for deferred compensation plans and tax-sheltered annuities.
In response to your entries, Oracle Payroll generates an element for the deduction, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
When you initiate the deduction, you determine the rules that control its processing, including the following:
Start and stop rules
You select the rules that determine when the deduction starts or stops for each employee. It might end when a balance of the amount taken for the deduction reaches a specified amount, or when you end date the element entry for the employee.
Amount rules
You select the method of entering or calculating the amount of the deduction. For example, you can enter the amount for each employee, you can specify that the application calculate the amount by a formula as a percentage of earnings, or you can specify that the application select the amount from a Payroll table or Benefits table.
Frequency rules
These rules determine the pay periods in which the deduction is withheld. For example, a monthly deduction might be processed in the third period of the month for weekly-paid employees and in the second period of the month for employees paid on a semi-monthly basis.
Insufficient funds rules
You can determine whether to hold an arrears balance for a deduction, and whether to take a partial deduction if earnings are insufficient to take the full deduction amount.
Pre-tax deductions are calculated iteratively when there are insufficient earnings to pay all taxes, garnishments, and the full pre-tax deduction. Oracle Payroll automatically reduces the amount taken for pre-tax deductions to ensure that taxes and garnishments are paid.
You can define additional rules for wage attachments.
See: Input Values for Wage Attachments
If you need to delete elements you created with the Deduction template, do not use the Element window. Query the element from within the template and delete it from there.
See: Deleting an Element
Oracle Payroll enables you to control starting and stopping deductions in several ways:
Start Rule or Stop Rule: On Entry
When the start rule is On Entry, the deduction begins on the effective date you enter the deduction for an employee.
When the stop rule is On Entry, the deduction ends on the effective date the entry is deleted.
Start Rule: Earnings Threshold
The deduction starts when the Gross Earnings balance for the employee reaches a specified amount.
The formula for deductions with this rule checks whether the payroll run has caused the employee's year-to-date value of the Gross Earnings balance to reach or surpass the threshold amount.
The deduction stops for an employee when a balance of the amount taken for the deduction reaches a specified amount.
US and Canadian users: You specify the start and stop rules through the Deductions window.
Mexican users: You specify the start and stop rules through the Element Design Wizard.
Note: You can modify the generated formula to reference a different balance.
The elements Oracle Payroll generates for initiated deductions include entry values needed for particular start and stop rules. Specify a default value for all eligible employees in the Default field of the Entry Values sub window of the Element Link window. Specify a value for an individual employee in the Entry Values sub window of the Element Entries window. The entry values are:
| Start or Stop Rule | Entry Value Name | Purpose of Entry |
|---|---|---|
| On Entry start and stop rule | On Entry | N/A |
| Earnings Threshold start rule | Threshold Amount | Gives formula the balance value that triggers deduction's start (Formula references Gross Earnings balance).
Note: This rule does not apply to Mexico. |
| Total Reached stop rule | Total Owed | Gives formula the total amount that triggers deduction's stop. |
When you use a Total Reached stop rule, the accrued balance is automatically set to zero when the amount deducted reaches the total owed. However, if you end the element entry before this happens, the balance is not cleared. If you enter the same element for the employee in the future, this deduction will end before the total owed has been deducted because the formula uses a balance that does not start from zero.
To prevent this problem, perform the following steps if you have to end an element entry with this stop rule before the total owed has been deducted:
Create a formula to check the value of <element_name>_ACCRUED_ASG_ITD, multiply its value by -1, and feed the result back to the accrued balance.
Create a nonrecurring element, and associate the formula with this element in the Formula Result Rules window.
Enter this element for the employee
For deductions taken to purchase Series EE bonds, the system-generated element includes the input value Purchase Price, for entering the purchase price of the bonds.
The Series EE Bond deduction formula sends the amount deducted for a bond purchase to a special balance, whose name is the deduction name with the words Towards Bond Purchase appended (for example, Series EE Bond 50 Towards Bond Purchase).
When an amount sufficient to cover one or more bond purchases accumulates in this balance, the formula issues a message to this effect and subtracts the bond purchase price from the Toward Bond Purchase balance amount. The bond purchasing process is external to Oracle Payroll.
When employees terminate, calculation of their final payments includes a refund of any amounts accumulated toward bond purchase.
| Input Value Name | Purpose of Entry |
|---|---|
| Purchase Price | Gives formula the amount needed for a bond purchase. |
On the Deductions window, you select a rule that determines how Oracle Payroll calculates the amount of the deduction. The system then generates the appropriate element input values. The available calculation rules are:
Flat Amount, if you enter an amount for each employee using BEE or the Element Entry window
% Earnings, if you enter a percentage for each employee using BEE or the Element Entry window. The deduction formula calculates the amount from this percentage.
Payroll Table, if the amount comes from a previously created user table.
Note: All generated deductions include the Additional Amount and Replacement Amount input values for efficient management of one-time changes to the deduction amount. Use the pay value override to use these input values.
See: Changes to Earnings or Deductions Before a Run, Oracle HRMS Payroll Processing Management Guide
Elements generated for deductions with this rule include an input value Amount, for entry of the deduction amount. No calculations are necessary to determine the amount.
| Input Value Name | Purpose of Entry |
|---|---|
| Amount | Gives formula the deduction amount. |
Elements generated for deductions with this rule include an input value Percentage. The formula multiplies an employee's Regular Pay balance by the percentage figure entered in the input value.
You can modify the formula to reference a different earnings balance. For a pretax 401(k) deduction, for example, the formula should reference the balance Earnings 401k.
| Input Value Name | Purpose of Entry |
|---|---|
| Percentage | Gives formula the percentage to use. (Formula references the run balance of Regular Pay.) |
If you select this rule, you must create a user table holding the deduction amounts. The amounts commonly vary by employees' ages, pay or job class. For example, this payroll table holds union dues amounts that vary with employee pay:
| Salary Range | Union A | Union B |
|---|---|---|
| 5.00 - 7.50 | 10.00 | 12.00 |
| 7.51 - 10.00 | 15.00 | 18.00 |
| 10.01 - 15.00 | 20.00 | 23.00 |
Oracle HRMS includes the row types Age Range, Salary Range and Job Class, already set up and ready for use for payroll tables holding deduction amounts.
If the rows of your payroll table do not reference employee age, pay or job class, you set up the additional row type you require. See: Setting Up Row Types for Payroll Tables
Elements generated for deductions with this rule include an input value Table Column. During the payroll run, the deduction formula uses the entry in this input value to determine which user table column to look in for the deduction amount.
If the rows of the payroll table reference pay, age, or job class, the deduction formula uses the database item for the employee's age, pay, or job class to determine which table row to go to. When the table's row type is not Age Range, Salary Range or Job Class, the system generates the element with an additional input value Row Name.
| Input Value Name | Purpose of Entry |
|---|---|
| Table Column | Gives formula the column to look in for the deduction amount. |
| Row Name (created only if the table row type is not Age Range, Salary Range or Job Class) | Gives formula the row to look in for the deduction amount. |
Oracle Payroll can hold an arrears balance for a deduction. It creates the input value Clear Arrears, which you use to specify whether the payroll run should attempt to clear the arrears. It also creates two special input values for the deduction. These input values are special in that they function without you ever seeing them or making entries to them. They receive their entries automatically during the payroll run.
US and Canadian users: Enable arrears balances through the Deductions window.
Mexican users: Enable arrears balances through the Element Design Wizard.
The special input value Not Taken holds any amount not taken for the deduction in the most recent payroll run. The special input value Arrears Contr (Arrears Contribution) feeds the arrears balance.
To review an employee's arrears balance for a deduction, use the View Earnings and Deductions Balances window.
| Input Value Name | Purpose of Entry |
|---|---|
| Clear Arrears | Select Y if you want the payroll run to attempt to clear the amount held in arrears. Select N if you do not want the payroll run to attempt to clear the arrears. |
| Not Taken | Receives any amount not taken in the most recent payroll run. |
| Arrears Contr (Arrears Contribution) | Receives results of the calculation of Scheduled Amount minus Pay Value for most recent run. Feeds this result to the arrears balance. |
Note: The system also makes use of the Adjust Arrears special input value in managing arrearage.
For more information about this input value, see: Changes to Earnings or Deductions Before a Run, Oracle HRMS Payroll Processing Management Guide.
The table below presents an example of how the entries automatically made to the these input values work to maintain the arrears balance.
Scheduled deduction amount per run: $50
Pay Value = Amount actually deducted in each run
Clear Arrears = Y
| Run | Pay Value | Not Taken | Arrears Contr (Arrears Contribution) | Arrears Balance |
|---|---|---|---|---|
| 1 | 50 | 0 | 0 | 0 |
| 2 | 30 | 20 | 20 | 20 |
| 3 | 10 | 40 | 40 | 60 |
| 4 | 110 | 0 | -60 | 0 |
| 5 | 50 | 0 | 0 | 0 |
Oracle Payroll automatically creates a number of balances for the deductions you initiate. The rules you select for the deductions determines which balances are created. You can review the definition of these balances in the Balance window.
You can see the value of these deductions for an employee using the View Earnings and Deductions Balances window.
See: Reviewing Earnings and Deductions Balances, Oracle HRMS Payroll Processing Management Guide
Note: To view tax balances for individuals, use the View Tax Balances window.
See: Viewing Tax Balances, Oracle HRMS Payroll Processing Management Guide
The balances that Oracle Payroll creates include the following:
This balance exists only for deductions with a stop rule of Total Reached. It holds the amount accumulated to date toward the total.
See: Deduction Start and Stop Rules
This balance exists only for deductions for which the system holds arrearage when employee earnings are insufficient to cover the deduction's full amount. The arrears balance holds any amounts not taken but held in arrears.
This balance exists only for deductions taken for the purchase of Series EE bonds. It holds the amount accumulated to date toward purchase of a bond.
See: Series EE Bond Deductions
This balance exists only for pretax deductions you initiate that do not fit in the categories Deferred Comp 401k, Health Care 125 or Dependent Care 125. For a pretax deduction such as this, you might require a balance fed by earnings types subject to the deduction. This is the Able balance that you can review here.
When you initiate a pretax deduction requiring this balance, the system generates the balance, but you must manually enter the earnings types that feed it. You might also need to modify the generated formula for the deduction so that it references this balance.
The information in this topic applies to pre-tax deductions in the following categories:
Health Care 125 and Dependent Care 125
State Retirement (Defined Benefit Plan and Defined Contribution Plan)
Deferred Comp 401k, 403b, and 457
Deferred Comp 401k - SECURE 2.0, Deferred Comp 403b - SECURE 2.0 and Deferred Comp 457 - SECURE 2.0. See Overview of Retirement Savings and SECURE Act 2.0.
Other.
When there are insufficient earnings to pay a pre-tax deduction and leave enough to pay all taxes, garnishments, and positive or zero net pay, the pre-tax deduction must be reduced. When you define the deduction you specify whether the payroll run takes nothing or a partial amount in this situation when it cannot take the full deduction. You also specify whether to hold the arrears in a balance so that the payroll run can try to deduct this amount in a subsequent payroll period. See: Insufficient Funds Rules for Deductions.
If an employee has multiple pre-tax deductions, the payroll run reduces first the element with the lowest processing priority (that is, the highest priority number) when there are insufficient earnings. You can also set an iterative priority on the Advanced tab of the Element window. The element with the lowest iterative priority (that is, the highest priority number) is reduced first.
Important: You must ensure that the iterative priority sequence follows the element processing priority sequence, but in reverse order. For example, the following table shows valid values for these priorities, where Element 3 is reduced first.
| Name | Processing Priority | Iterative Priority |
|---|---|---|
| Element 1 | 2000 | 50 |
| Element 2 | 3000 | 40 |
| Element 3 | 3500 | 30 |
Oracle Payroll uses an iterative process to calculate the highest pre-tax deduction it can take while still allowing taxes and garnishment to be paid in full, and net pay to be greater than or equal to zero. When you initiate a pre-tax deduction, the application associates an iterative formula (US_ITERATIVE_PRETAX) with the generated element, along with an iterative rule called Stopper, which stops the iterations. You can view the rule on the Iterative Rules window (which opens from the Element window) but you won't normally need to change the iterative formula or rule.
The application also generates a nonrecurring indirect-only element called FIT_ITERATIVE_ADJUSTMENT to adjust net pay.
By default, the iterations stop when net pay plus tax arrears is less than or equal to $1. You can change the precision of the iterative calculation by changing from $1 to another figure in the Pretax Arrears FIT Adj To Within field. Changing this figure to zero increases the number of iterations the calculation must perform.
The Pretax Arrears FIT Adj To Within field is present at business group level (in an organization information type called Iterative Rules) and in the Payroll Further Information flexfield. In these flexfields, you can also select an iterative method; it defaults to interpolation but you can change it to binary. The values you select at payroll level for iterative method and Pretax Arrears FIT Adj To Within override those held at business group level.
The calculation of the pre-tax deduction iterates as follows:
If all taxes and garnishments can be paid and leave a positive or zero net pay when the full pre-tax deduction plus any arrears is taken, the formula stops after the first iteration.
No Partial Deductions and No Arrearage:
The formula stops after one iteration with the pre-tax deduction amount = 0. The amount not taken is discounted.
No Partial Deductions and Arrearage Held:
If there are no arrears, the processing stops as in the case when there is no arrearage. If there are arrears, there is one more iteration to see if the run can take the deduction amount without the arrears. If not, the deduction is zero as in the previous case.
Partial Deduction Allowed:
The formula iterates to find the highest level of the pre-tax deduction that it can take to permit all taxes and garnishments to be paid and net pay plus tax arrears to be equal to zero or greater than zero by no more than the Pretax Arrears FIT Adj To Within figure.
Suppose an employee has the following element entries:
Salary = 500
Pre-tax deduction = 450
Assume Pretax Arrears FIT Adj To Within is set to zero for the employee's payroll.
If Partial Deductions are not allowed, the pre-tax deduction will not be taken and net pay will be 289.91.
If Partial Deductions are allowed, the pre-tax deduction will be reduced to 321.43 and net pay will be 0.
Suppose an employee has the following element entries:
Salary = 700
Pre-tax deduction = 450
Assume the employee has arrears of 250 for the pre-tax deduction, and Pretax Arrears FIT Adj To Within is set to zero for the employee's payroll.
If Partial Deductions are not allowed, this period's pre-tax deduction will be taken but the arrears will not be taken.
If Partial Deductions are allowed, this period's pre-tax deduction and some of the arrears will be taken (total 478.97), arrears will be reduced to 221.03, and net pay will be 0.
To process the employer match correctly, when an employee has both:
401K and Roth 401K deductions, first 401K ER contribution is calculated and then the Roth 401K ER contribution is calculated.
403b and Roth 403b deductions, first 403b ER contribution is calculated and then the Roth 403b contribution is calculated.
Use the Deduction window to initiate a non-tax deduction in accordance with the rules and policies of your enterprise.
In response to your entries in this window, Oracle Payroll generates an element for the deduction, with the necessary input values and balance feeds, and a formula with the necessary formula result rules.
If you want to add your own user-defined category for a deduction, use the application utilities Lookups window to enter additional categories for these Lookup types:
US_INVOLUNTARY_DEDUCTIONS
US_VOLUNTARY_DEDUCTIONS
US_PRE_TAX_DEDUCTIONS
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
If the deduction amount is to be located by a formula from a user table, you must create the user table first.
See: Setting Up User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
If the user table uses a row type other than the predefined types Age Range, Salary Range, or Job Class, you must set up the row type first.
If necessary, define frequency rules.
Note: Do not define frequency rules for involuntary deductions.
If necessary, modify the generated components
Define element links for the generated element(s).
Note: If you make mistaken entries when initiating a deduction so that the components generated for it need correction, delete all the generated components and re-initiate the deduction.
Create the 401(k), 403(b), and 457 Elements.
You create these pre-tax deduction elements in the Deduction window.
Define element links for the generated element(s).
You link elements to eligible assignments in the Element Link window.
Establish employer matching for 401(k), 403(b), and 457 (if necessary).
You enter matching contribution amounts in the Globals window.
Set up catch-up processing. See Setting Up Catch-Up Processing
You need to identify, classify, and categorize a deduction before you can use it. Use the Deduction window.
To identify, classify, and categorize the deduction
Set the effective date early enough to handle any historical entries. You cannot enter a deduction for employees before its effective start date.
Enter a unique name for the deduction. This name applies both to the deduction element and its formula. The name must start with a letter of the alphabet, not a number or symbol and must not exceed a length of 31 characters.
Note: A number of suffixes are used within the system. Do not use these suffixes in your deduction names or reporting names.
Alien SF
AT
AT ER
AT Special Inputs
AT Special Features
Buy Back
Buy Back SF
Buy Back SI
Calculator
Carried Over
Catchup
Catchup SI
Catchup SF
ER
ER Contribution
ER Contribution SF
ER Contribution SI
Excess Credits
Fees
Payroll Balance
Priority
Residual
Roth
Roth CU SI
Roth CU SF
Roth Catchup
Roth Catchup ER
Roth ER
Roth SF
Roth SI
Special Features
Special Inputs
Supp SF
Tagging
Taxable By JD
Verifier
Withholding
Enter a reporting name, which is a short name that appears on reports and the statement of earnings.
Select the correct classification for the deduction, and a category if applicable.
Pretax deductions and deductions taken for wage attachments require selection of a category.
If this deduction pays for a benefit or benefit plan and you are using Basic Benefits, select the appropriate benefit classification for it.
Note: Do not select a benefit classification of Medical, Dental, or Vision if your site uses Standard Benefits or Advanced Benefits.
Optionally change the default priority. The deduction's classification determines its default processing priority in the payroll run. Deductions with lower processing priorities process first.
See: Selecting Processing Rules for the Deduction
Processing rules enable you to define with precision how Oracle Payroll processes a deduction.
To enter processing rules for the deduction
Choose the Processing tabbed region of the Deduction window.
Select Recurring or Nonrecurring as the processing type.
Select Recurring if entries to this deduction should process until you change or end them. Select Nonrecurring if the deduction should process only when it receives one or more new entries in a period.
Select On Entry or Earnings Threshold as the rule determining when this deduction starts for an employee:
On Entry, if the deduction should start as of the effective date you enter it for an employee
Earnings Threshold, if this deduction should start when the employee's Gross Earnings balance reaches or surpasses a threshold amount. Enter this amount in the input value Threshold Amount.
Specify a default value for all eligible employees in the Threshold Amount Default field of the Entry Values window of the Element Link window.
Specify a value for an individual employee in the Threshold Amount field of the Entry Values window of the Element Entries window.
You can modify the deduction formula to reference a different earnings balance.
Check the appropriate boxes in the Deferred Compensation Rule region:
Employer Match tells the application to generate an ER Match element that you can use for employees who are eligible for employer matching (or partial matching). This element has the same name as the element you are creating, plus the letters ER.
After-Tax Component tells the application to generate an AT element that you can use for employees who elect to contribute after-tax money. This element has the same name as the element you are creating, plus the letters AT.
Note: You cannot select After-Tax Component for your own categories of pretax deductions.
Select a run type of Regular or All.
Select Regular for the deduction to process only in Regular runs, that is, the runs that produce employees' regular pay in each period. Select All to process the deduction in both Regular and Supplemental runs.
Select a termination rule to determine how the application processes the element after termination of the employee:
Actual Termination, if you want recurring entries to close down on the date the employee leaves. For a nonrecurring element, select Actual Termination if you want the entries to close down at the end of the pay period in which the employee leaves, or on the date the assignment ends (the final process date) if this is earlier.
Final Close, if you want the entries to stay open beyond the employee's leaving date so that you can continue to pay the employee.
Last Standard Process, for all recurring and nonrecurring elements if you want their entries to close down on the Last Standard Process date or on the date the assignment ends (the final process date) if this is earlier. The Last Standard Process date defaults to the last day of the pay period in which the employee is terminated, but you can set it to a later period when you terminate an employee.
Check the Standard Link box only if you want automatic entry of the deduction and its default input value entries for all eligible employees.
Check the Total Reached stop rule box if the deduction should stop when the total sum taken from an employee for this deduction reaches a specified total. You enter this total in the entry value Total Owed:
Specify a Total Reached default value for all eligible employees in the Total Owed Default field of the Input Values window of the Element Link window.
Specify a Total Reached value for an individual employee in the Total Owed field of the Entry Values window of the Element Entries window.
Uncheck the Total Reached box if the deduction should stop on the effective date you delete it for an employee. (This is the On Entry stop rule.)
For more information about start and stop rules, see Deduction Start and Stop Rules.
If this is a deduction for the purchase of Series EE Bonds, check the Series EE Bond box. All deductions for Series EE Bond purchase require the processing type Recurring.
See: Determining the Deduction Amount
Select the rules that determine the amount of a deduction in the Amount tabbed region of the Deduction window.
If you want the amounts to come from a user table (amount rule Payroll Table), you must create the user table first.
See: Setting Up User Tables, Oracle HRMS Configuring, Reporting, and System Administration Guide
If the payroll table uses a row type other than the predefined types Age Range, Salary Range or Job Class, you must set up the row type first.
See: Setting Up Row Types for Payroll Tables
To determine the deduction amount
Choose the Amount tabbed region.
Select Flat Amount, % Earnings, or Payroll Table as the amount rule. You cannot select Payroll Table for some categories of pre-tax deduction.
Note: You cannot select the rule Benefits Table but it may display for some deductions created in earlier versions of the application. If you want to enter values in the Benefits Table for a new deduction, you must configure it, see: Configuring Components for Health Care Benefit Plans. This is for Basic Benefits, only.
If the amount rule is Payroll Table, select in the Payroll Table region the name and row type of the table. Also, select the name of the table column in which the deduction formula should look for the deduction amounts.
Note: The payroll table rows may have a row type other than Age Range, Salary Range or Job Class. In this case, after setting up this deduction you must modify its generated formula to reference the row type and the appropriate database item. The formula has the name of the deduction with the words PAYROLL_TABLE added.
See: Managing Insufficient Funds (Arrearage)
Arrearage rules enable you to manage insufficient funds. Use the Amount tabbed region of the Deduction window.
Check the Arrearage box to hold an arrears balance for the deduction. The arrears balance takes the deduction's name. If you do not check this box, no arrears balance is held for this deduction.
If you check this box but do not check the Partial Deduction box, the payroll run will only clear the arrears when there is sufficient earnings to take the full deduction and all the arrears. It does not clear the arrears in part.
Check the Partial Deduction box to take a partial amount when earnings are insufficient to take the full deduction amount.
If you check this box but do not check the Arrearage box, the system does not hold an amount not taken in an arrears balance.
Tip: If the benefits of taking partial deductions are marginal for your deduction, consider leaving this box unchecked for more efficient processing.
Save your work.
See: Reviewing Earnings and Deductions Structures
Oracle HRMS includes the row types Age Range, Salary Range and Job Class, already set up and ready for use for payroll tables holding deduction amounts.
If the rows of your payroll table do not reference employee age, pay or job class, you set up the additional row type you require. You set up a new row type using the application utilities Lookups window.
The new row type may reference information already in the HRMS database as a database item. For example, a new row type can reference employees' positions.
Alternatively, the new type might reference information not previously existing in the database. For example, the rows of a table holding amounts of union dues deductions might refer to union-defined skill levels not found elsewhere in your HRMS database:
| Skill Level | Union A | Union B |
|---|---|---|
| Apprentice | 10.00 | 12.00 |
| Journeyman | 15.00 | 18.00 |
| Craftsman | 20.00 | 23.00 |
To set up row types that reference database items
In the application utilities Lookups window, query the Lookup type US_TABLE_ROW_TYPES in the Type field.
Enter a suitable short code for the new row type, and the meaning of the code. For example, if the new row type references employees' positions, you could enter the code POS and the meaning Position.
Optionally, enter a description for the new row type. The start date defaults to the effective date. You can change this default. Save your work.
To set up row types that do not reference database items
In the application utilities Lookups window, enter an appropriate Lookup type for the new row type. For example, to set up a row type for the table holding union dues deduction amounts that vary by employees' union-defined skill levels, set up a Lookup type SKILL_LEVEL.
Enter a short code and meaning for each code belonging to the type.
These are example Lookup entries for the Lookup type SKILL_LEVEL:
| Code | Meaning |
|---|---|
| APP | Apprentice |
| JRN | Journeyman |
| CRFT | Craftsman |
Optionally, enter a description for each code. The start date defaults to the effective date. You can change this default.
Save your work.
Clear the entries in the application utilities Lookups window, and query the Lookup type US_TABLE_ROW_TYPES in the Type field. Then add the new Lookup type to the list of codes and meanings available as Lookups for the type US_TABLE_ROW_TYPE.
Note: After setting up a deduction whose amount comes from a table using the new row type, you must use the Formulas window to modify the formula generated for the deduction so that it references the new row type. The formula has the name of the deduction with the words PAYROLL_TABLE added.
See: Adding Lookup Types and Values, Oracle HRMS Configuring, Reporting, and System Administration Guide
A tax levy, under United States Federal law, is an administrative action by the Internal Revenue Service (IRS) under statutory authority, to demand of an employer that a portion of the wages of a tax debtor be sent directly to the IRS. A state tax levy is essentially the same as a federal tax levy. In some states, the actor is the same: The Internal Revenue Service contracts with the state government to seize a delinquent taxpayer's wages.
Oracle US Payroll enables employers to calculate and process state tax levies, a type of involuntary deduction similar to the federal tax levy that is administered at the individual state level.
This topic explains the Oracle Payroll for US solution that is available to employers to process and calculate state tax levy deductions.
Oracle Payroll for US provides the 'State Tax Levy' category to process state level tax levies issued for employees. The predefined State Tax Levy category is available for the Involuntary Deductions element classification.
The State Tax Levy involuntary deduction category takes into account the individual state level criteria for factors involved in calculating levy amounts such as disposable income, exemption criteria, exemption amount, and deduction amount. When the application processes the State Tax Levy category, if the jurisdiction is provided for an employee in the Element Entry window, then the jurisdiction is considered for processing. Otherwise, the application considers the employee assignment's work location. The State exemption criteria to be applied and the calculation rules to be followed are then determined based on the jurisdiction.
Oracle Payroll for US delivers the following balances to process state levy tax deductions:
State Tax Levy Disposable Income: This balance is used to calculate Disposable Income for State Tax Levy type elements.
State Tax Levies: This balance is used to get the amount deducted under State Tax Levy.
Pre Tax Dedn for State Tax Levy: This balance is used to get the Pre Tax deductions associated with the State Tax Levy.
Vol Dedn for State Tax Levy: This balance is used to get the Voluntary Tax deductions associated with the State Tax Levy.
Each state may have different exemption rules. For example, some states do not have criteria of their own and follow the federal exemption rules. Other states may define a percentage exemption criteria or flat exemption based on the number of dependents. A few states have their own specific criteria and a small number of states do not have any exemption rules.
Oracle Payroll for US enables you to process state tax levies based on the state exemption criteria. The State Tax Levy category accommodates a maximum of 100% disposable income and requests of allowable exemptions. The combination of earning and exemption rules and the amount that is deducted for a State Tax Levy category element defines the calculation of state tax levy deduction amount.
Oracle Payroll for US enables you to process state tax levies based on the state exemption criteria. The State Tax Levy category accommodates a maximum of 100% disposable income and requests of allowable exemptions. The combination of earning and exemption rules and the amount that is deducted for a State Tax Levy category element defines the calculation of state tax levy deduction amount.
Greater of Disposable Income Exemption or Factor of Federal M
Greater of Disposable Income Exemption or Factor of Federal M
Flat dollar amount exemption
Exemption of percentage of specified balance
Exemption of percentage of Gross Income
Exemption amount depends on marital status
Deductions of this garnishment category are not allowed
You can use the Wage Attachment Exemption Rules window to view exemption rules for the states. This window displays all legislative rules delivered by Oracle Payroll concerning disposable income exemption calculations for wage attachments.
The following is a list of overrides specific to the State Tax Levy category of deductions:
Override Gross Exemption Percentage and Override Dollar Exemption Amount:
These two fields are available in the following windows:
In the Extra Element Information window for an element.
In the Entry Values, Further Element Entry Information window for an employee's assignment.
The option of Lesser or Greater is provided to be used when calculating the state tax levy when either of the above override criteria is selected.
An Override field that provides the minimum take home pay after the manual calculations in the Entry Values window.
The override fields are available in the US Garnishment Processing Rules Extra Information Type (EIT).
The override values can be provided at both the Element level and Element Entry level.
To enter the override values at the element level:
Navigate to the Element window.
Search for the required element.
Search for the required element.
In the Extra Element Information window that appears, select US Garnishment Processing Rules to provide override values.
To enter the override values at the assignment element entry level:
Navigate to the People window.
Search for the required employee and click Assignment.
Click Entries in the Assignment window. The Element Entries window appears.
Select the appropriate state tax levy element and click Entry Values. The Entry Values window appears.
Enter the appropriate information and click in the Further Entry Information field. The Further Element Entry Information window appears for you to provide the override details.
When values are present at both the element and assignment element entry levels, the application gives precedence to an assignment's element entry values. For example, California, there may be a need for the State Tax Levy element to consider all the available disposable income and meets the rule 'Must allow up to 100% Disposable Income'. For such states, in the Element Entry window, the value for the Override Dollar Amount field should be entered as 0.
Oracle Payroll for US also supports the wage attachment limit rules for Montana and Rhode Island.
Complete the following steps to process state tax levies and calculate the deduction amount:
Use the Deduction window and define an element with the classification as 'Involuntary Deductions' and State Tax Levy as the category.
Use the Element Link window to define an element link for the involuntary deduction created in Step 1.
Attach the involuntary deduction element to the employee's assignment element entries and run the payroll.
When the payroll is run, depending on the earning rules and exemption rules for the specific state or jurisdiction, the application calculates the state tax levy deduction amount.
The states of Wisconsin and Minnesota have mandated that the state tax levy payments must be made through the Electronic Funds Transfer (EFT) method. Oracle Payroll supports EFT of state tax levy payments only for these states. You must complete setup steps for EFT of state tax levy payments. See: Setting Up EFT for State Tax Levy Payments
Complete the following steps to set up electronic funds transfer (EFT) payments for state tax levies for the states of Wisconsin and Minnesota.
Setup Steps
Define the third-party NACHA rules for the required states:
Navigate to the Organization window.
Search for the organization.
Select the GRE/Legal Entity organization classification and click Others.
Select Third Party NACHA Rules as the additional organization information. The Additional Organization Information window appears.
Click a segment and enter the state code and STL Tax payment type code for the required states.
For Minnesota, select MN as the State Code and 209 as the STL Tax Payment Type Code.
For Wisconsin, select WI as the State Code and 15030 as the STL Tax Payment Type Code.
Process Steps
To process EFT for state tax levy payments, complete the following steps:
State tax levy elements: If state tax levy elements are not set up, then create elements for the required states with State Tax Levy as the category. See: Processing State Tax Levies
Third party NACHA payment method: Using the Organizational Payment Method window, create a third-party NACHA payment method and assign the payment method to the required payroll. See: Defining a Payment Method , Oracle HRMS Payroll Processing Management Guide (US)
Payee organizations: If payee organizations are not defined for the states, then create payee organizations for which the third-party payments have to be made. See: Organization Classifications., Oracle HRMS Enterprise and Workforce Management Guide (US)
Create a personal payment method for EFT of state tax levy payments. See: Entering Payment Methods for an Employee Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide (US)
Assign elements: Add the state tax levy elements to the employee assignment records using the Element Entries window and specify the element entry values. Note: You must enter the jurisdiction value to make sure that the EFT format for state tax levy payment is used when you run the NACHA process. If the jurisdiction value for the state tax levy element is not entered, then the default child support EFT format is used to generate the .mf file for EFT of state tax levy payments.
Run Payroll and the PrePayments process. See: Starting a Payroll Run, Oracle HRMS Payroll Processing Management Guide (US) and Running the PrePayments Process, Oracle HRMS Payroll Processing Management Guide (US).
Run the NACHA process for the third-party payment method created in step 2. See: NACHA Process, Oracle HRMS Payroll Processing Management Guide (US). Verify the .mf file and output.
Note: When you run the NACHA process for the third-party payment for EFT, the process may not display any warning or error if you have not set either the state tax levy element entry correctly (not entered the correct state jurisdiction code override) or the third-party personal payment method correctly (set up a third-party NACHA personal payment method for anything other than child support or STL payment).
Oracle Payroll provides a robust answer to administering wage attachments, a type of involuntary deduction. Like other features in Oracle HRMS, wage attachments are rule-driven so that you can tailor the software to fit your business requirements.
Wage attachments in Oracle Payroll consist of the following administrative functions:
Creating wage attachments
Determining which earnings are eligible for wage attachments
Administering fees for recouping processing costs of wage attachments
In response to the information you enter for a wage attachment in the Deduction window, Oracle Payroll generates the essential components of the deduction. These include:
one or more deduction elements with the necessary input values and balance feeds. This allows you to track in detail information relating to the wage attachment.
formulas prescribing the correct processing for the deduction elements, together with the formula processing and result rules. The system generates formulas specifically for tax levies, support orders, and credit debt.
All generated deductions include the input values Additional Amount and Replacement Amount, for efficient management of one-time changes to the deduction amount.
Note: Oracle Payroll automatically stops deducting wage attachments from wages when the total owed is reached, regardless of whether a court-issued notice or form 668-D is received.
When you initiate wage attachments, the system generates elements with associated input values. You can use these input values to keep accurate records of the employees wage attachment. The following table lists the input value names and describes the purpose they serve.
| Input Value Name | Purpose of Entry |
|---|---|
| Allowances | Holds withholding allowance information from federal form 668W, part 3.
Note: Must be entered for federal tax levies; will not use the W-4 information. If left blank, the default is 1 allowance, per IRS instructions. |
| Amount | Gives amount to deduct each pay period if the deduction amount rule is Flat Amount. |
| Arrears Bal Amount | Holds arrearage information supplied on the court order. |
| Arrears Dedn Amount | Gives formula a court-specified amount to be withheld each period to cover any existing arrearage. |
| Attachment Number | Records court-issued identification number, the case number, sometimes the Social Security Number of the employee.
Note: The Document Number is typically the same as the Attachment Number. Certain states require that the court order number (that is, the Attachment Number) is entered in this field. Users must determine whether the state agency to whom they are remitting the third-party payment requires it. |
| Clear Arrears | Not applicable for wage attachments. |
| Date Earned | Not applicable for wage attachments. |
| Date in Arrears | If arrearage exists, gives formula the date from which it started. This information is supplied by the court order. |
| Date Served | Holds the attachment's date of issue. The application uses the date served to prioritize the correct calculation of deductions if multiple wage attachments exist. If this field is blank, it will default to 01-JAN-1901. |
| Dedns at Time of Writ | Used for federal tax levies only. Gives formula the total dollar amount of employee's non-tax deductions as of the date served, which can affect calculation of employee's exempt earnings for tax levies. The deduction amounts may vary periodically Examples include medical premiums and union dues. |
| EE or Spouse Blind / Age >+ 65 | Used for tax levy only, to indicate an exemption for Blind or Age 65 or Older. See: Publication 1494 at http://www.irs.gov/pub/irs-pdf/p1494.pdf for IRS guidance. |
| Filing Status | Holds filing information from federal form 668W, part 3. This information does not have to match federal W-4.
Note: If left blank, the system defaults the filing status to married, filing separately with one allowance, per IRS instructions. |
| FIPS Code | The Federal Information Process Standard (FIPS) code refers to the FIPS Code of the SDU receiving the transaction. This is an optional input value. Certain state or local jurisdictions may require this number to be entered. Verify with the state or local agency or entity whether FIPS code is required. It is 5 characters when indicating both the state and county codes. It is 7 characters when indicating state, county, and local codes. |
| Initial Fee Flag | Used to indicate that an initial fee has already been collected, and any further fees should only be collected if required for subsequent deductions. This is an optional Y/N field. |
| Jurisdiction | Overrides employee's work state as source of the legislation used to administer the attachment. Under federal law, each state must honor interstate support orders. Orders received from states other than the work state are enforced using the limit rules, exemption rules, fee rules and earnings rules of the employee's work state.
Note: If left blank, the system defaults the jurisdiction to the employee's primary work state. |
| Max Per Period | For use when multiple payroll runs occur during the same pay period for the deduction element. All payroll runs for the period will check to make sure deduction amounts for the element will not exceed this value. |
| Monthly Cap | For use when multiple payroll runs occur during the same calendar month for the deduction element. All payroll runs for the calendar month will check to make sure deductions amounts for the element will not exceed this value. |
| Medical Support Indicator | The available choices are Yes or No. This input value is for informational purposes only and is used to indicate that the child is covered under private insurance. It is not used to offset any child support amount. |
| Number of Dependents | Gives the formula the number of dependents that can affect calculation of the employee's exempt earnings. If the employee has multiple children on different orders, this field should hold the sum total of all the dependent children. Use this field for credit debt and garnishment for North Dakota, South Dakota and Tennessee. |
| Override Exempt Percent | This input value is applicable in the following scenarios: Payments not in Arrears, Payments are in Arrears, Dependents or Payments not in Arrears, Dependents or Payments in Arrears. This input value is used only in Child Support or Spousal Support only. The purpose of the Override fields is to give the user the ability to customize the element entry regardless of the specific seeded rules. Oracle delivers Wage Attachment Exemption Rules per state laws. If the court order indicates that more should be withheld than what the state law allows, then the override fields provide the ability to override the exemption. |
| Override Max Withholding Duration (Days) | Used for Garnishment or Credit Debt involuntary deduction only. The application uses the Date Served value to calculate when to stop the deduction, based on state rules. To override those state rules, enter a different number of days in this field. Before entering an override, verify what is allowed for a specific state. |
| Pay Value | Not Applicable for wage attachments. |
| Payee Details | Holds the information about the recipient of the wage attachment, such as the estranged spouse or a creditor. This is established as a personal payment method, and there can be multiple values for an employee record, such as for a support order payment AND a creditor debt, or multiple support orders. |
| Percentage | Gives percentage to use if the deduction amount rule is % Earnings. Calculated by the system, when blank. The amount entered overrides the system calculation and takes the override amount after deducting amounts with higher priority. For example, an employee has support which takes 35% of disposable income. The employer enters an override of 40% for credit debt, garnishment, employee requested, or education loan. The system takes the additional 5% to reach the 40% override. |
| Processing Priority | The first field gives the system assigned processing priority. The second field lets you determine the processing sequence or priority of multiple wage attachments. |
| Total Owed | Gives formula the total amount owed, if applicable for the deduction category.
Caution: If total owed is entered for federal tax levies, the deduction will stop when that amount has been deducted. Federal tax levies should not stop until a release, 668-D, is received by the employer. |
| Support Other Family | This field holds a value of Yes or No, and affects the employees exempt wages for support orders. |
Important: If you have no value to supply, leave the field blank. It is not required to enter data in any field that is not appropriate to your particular deduction or state.
The following table identifies the status (optional, suggested, mandatory) of the entry value category for each type of wage attachment.
Key: N/A = Not Applicable
| Entry Value Category | Creditor Debt | Federal Tax Levy | Support Orders | Educational Loans | Employee Requested |
| Amount | Optional | N/A | Required | Optional | Optional |
| Jurisdiction | Optional | Optional | Optional | Optional | Optional |
| Attachment Number | Required | Required | Required | Required | Required |
| EE or Spouse Blind / Age >+ 65 | N/A | Optional | N/A | N/A | N/A |
| FIPS Code | Optional | Optional | Optional | Optional | Optional |
| Total Owed | Required | Required | N/A | Required | Optional |
| Date Served | Optional | Optional | Optional | Optional | Optional |
| Arrears Deduction Amount | N/A | N/A | Optional | N/A | N/A |
| Date in Arrears | N/A | N/A | Optional | N/A | N/A |
| Initial Fee Flag | Optional | Optional | Optional | Optional | Optional |
| Override Exempt Percent | N/A | N/A | Optional | N/A | N/A |
| Override Max Withholding Duration (Days) | N/A | N/A | Optional | N/A | N/A |
| Medical Support Indicator | N/A | N/A | Optional | N/A | N/A |
| Number of Dependents | N/A | N/A | Optional | N/A | N/A |
| Filing Status (Federal Form 668W) | N/A | Required | N/A | N/A | N/A |
| Allowances (applies to Delaware) | N/A | Required | N/A | N/A | N/A |
| Deductioins at Time of Writ | Optional | Required | Optional | Optional | Optional |
| Percentage | N/A | N/A | N/A | N/A | Optional |
| Arrears Balance | N/A | N/A | Optional | N/A | N/A |
| Support Other Family | N/A | N/A | Required | N/A | N/A |
You should not use the Show Adjustment checkbox on the element entry window to make an adjustment to any wage attachment element.
To make an adjustment to the amount of a wage attachment element, you use the Special Inputs element.
Note: The system only takes the additional or replacement amount in the pay period in which the adjustment is entered. You must make a separate entry for each pay period you want the wage attachment adjusted.
See: Entering One-Time Changes Before a Run
Many states allow employers to recoup costs for administering Wage Attachments, such as court-ordered support and creditor garnishment.
Oracle Payroll allows you to date effectively maintain fees and fee limits for administering wage attachments in a given state according to your company policy. You are responsible for setting up and maintaining fee amounts for each state in which you have employees.
Note: For each state there can exist only one wage attachment fee rule per wage attachment category. You cannot have multiple wage attachment fee rules per wage attachment category for the same state.
You can create a new Wage Attachment fee rule, update an existing Wage Attachment fee rule, conclude an obsolete Wage Attachment fee rule, and reinstate a Wage Attachment fee rule that concluded.
Rules for Wage Attachment Fees
The following table of predefined rules, available from the Wage Attachment Fee Rules window, help you define, maintain, and limit wage attachment fee administration:
| Rule | Definition |
|---|---|
| Amount | You recoup a flat dollar amount fee for administering a specified wage attachment category using this rule. |
| Amount or Percent | You recoup a flat dollar amount or a fixed percentage amount fee (whichever is the greater) for administering a specified wage attachment category using this rule. You must enter a percentage in the format of .XX, for example, you enter 2 percent as .02. |
| Amount or Percent to maximum per order | This rule is similar to the Amount or Percent rule, with the additional requirement that the fee can only be charged once per order. This one-time fee can be deducted over multiple pay periods. You must enter a percentage in the format of .XX, for example, you enter 2 percent as .02. |
| Amount to maximum per month | You recoup a flat dollar amount fee for administering a specified wage attachment category using this rule. This wage attachment fee rule is capped and cannot exceed the cap in any given month. |
| Amount to maximum per period | You recoup a flat dollar amount fee for administering a specified wage attachment category using this rule. This wage attachment fee rule is capped and cannot exceed the cap in a specified period. |
| Amount to maximum per run | You recoup a flat dollar amount fee for administering a specified wage attachment category using this rule. This wage attachment fee rule is capped and cannot exceed the cap in any payroll run. |
| Initial and subsequent amounts | You recoup initial startup costs for administering a specified wage attachment using this rule. This rule establishes a subsequent fee for ongoing administration of this wage attachment category. |
| Initial and subsequent amounts to maximum per month | You recoup initial startup costs for administering a specified wage attachment using this rule. This rule establishes a subsequent fee (with a monthly cap) for ongoing administration of this wage attachment category. |
| Initial and subsequent amounts to maximum per period | You recoup initial startup costs for administering a specified wage attachment using this rule. This rule establishes a subsequent fee (with a cap for the specified time period) for ongoing administration of this wage attachment category. |
| Initial and subsequent amounts to maximum per run | You recoup initial startup costs for administering a specified wage attachment using this rule. This rule establishes a subsequent fee (with a specified cap for any payroll run) for ongoing administration of this wage attachment category. |
For the state of Nevada you must remit a garnishment fee to the state for child support garnishments. The state requires a fee of $2.00 per withholding with a maximum of $4.00 per month. You collect and remit the fee only for employees who have a work state of Nevada. The fee does not apply to employees working in Nevada but subject to a support order for another state.
You can date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments using Oracle Payroll wage attachment earnings rules.
You can define two types of information for each state:
Support Disposable Income indicates that this earning type is eligible for court orders.
Other Wage Attachment Disposable Income indicates this earnings type is eligible for attachment.
You can also indicate that certain earning types are not eligible for attachment.
To enter wage attachment earnings rules for earnings categories not currently listed though already defined at your location, add the categories to the list using the Lookup type: US_SUPPLEMENTAL_EARNINGS.
Note: You cannot change the seeded rules. It is your responsibility to maintain any custom Wage Attachment Earnings Rules you define. Your rules, however, will be protected during any subsequent upgrades.
As a result of the information you enter for a wage attachment in the deduction window, Oracle Payroll generates the essential components of the deduction. These include shadow elements, input values, balance feeds, and formula and result rules.
There are distinct differences in the elements generated, formulas, and how the system stores the deduction amount between the old and the new wage attachment architecture.
If you use the old architecture, Oracle Payroll creates the following elements for each deduction:
Base Element
Special Inputs Element
Special Features Element
Calculator Element
Priority Element
Verifier Element
Fees Element
The system generates one of three basic formulas for a wage attachment, depending on whether it is a tax levy, a support order, or credit debt. Separate formulas exist for tax levies and child support orders because there are special rules to determine exempt earnings for these categories of attachment.
Whichever formula you use, the formula processing of wage attachments occurs in three steps:
Determination of employee disposable wages or take home pay (earnings minus tax and any other allowable deductions), and of their exempt earnings or exemption allowance (percentage of disposable wages not subject to attachment).
Calculation of the amount to withhold. The wage attachment court order will provide the amount to be withheld per pay period and/or a total amount due. If no pay period amount is entered, Oracle Payroll will default to the maximum amount allowed by law. Added to the base amount may be an arrearage amount specified in the court order, and any fees that state law permits employers to withhold to cover their setup and administration costs.
Verification of amounts withheld. After the calculation of all wage attachments for an employee, a formula checks to ensure that all rules and limits applicable to these attachments have been taken into account. If it finds any violations, the formula makes adjustments to the previously calculated amounts, prorating them and creating arrearages if necessary.
Note: The system holds calculation and verification results on two elements specially generated for this purpose, not on the base element for the wage attachment. These two elements have the base element name with "Calculator" or "Verifier" added.
If an wage attachment for a child support order has the name Child Supp1, the elements generated for the deduction would have the names Child Supp1, Child Supp1 Calculator, and Child Supp1 Verifier.
If you use the Override Proration Rule, you may not see the results you expect if the requested override contravenes state law governing the repayment of educational loans.
If you use the new architecture, Oracle Payroll creates the following elements for each deduction:
Base Element
Special Inputs Element
Calculator Element
Fees Element
With the new architecture, the wage attachment elements are processed in the following order:
The Base Element is the element you give to an employee assignment using the element entry window. This element executes the Balance Setup formula. The Base Element also calculates the following values, and stores the values in a PL/SQL structure:
Deduction amount specified
Fee amount
Count of wage attachment elements processed
The Calculator Element is an indirect entry triggered by the Base Element. This element executes the Calculator Formula. The Calculator Element also accesses the PL/SQL module to calculate the deduction amount based on the following:
Count of wage attachment elements processed
Total deduction amount
Total fee amount
Priority of elements and Proration rule
The Fees Element is an indirect entry triggered by the Calculator Element. This element creates run results for the fees, and feeds the fees balance.
The system maintains the following balances for each wage attachment order:
<Base Name>
<Base Name> Accrued
<Base Name> Accrued Fees
<Base Name> Additional
<Base Name> Arrears
<Base Name> Fees
<Base Name> Not Taken
<Base Name> Replacement
<Base Name> Vol Dedns
With the new architecture, Oracle Payroll stores the deduction amount against the Calculator Element. This affects both the Element Register and Costing. The Element Register includes the Calculator Element instead of the Base Element. For Costing, you must cost the Calculator Element instead of the Base Element.
You can use old and new style elements in the same business group. However, an employee assignment can only have one style, either old or new. Oracle Payroll provides a concurrent program based utility available for one step migration from old to new architecture.
You initiate a wage attachment by entering information about it in the Deduction window. The system generates the deduction element with the necessary input values and balance feeds, and the deduction formula with the necessary processing and result rules.
Important: Do not enter frequency rules for a wage attachment.
To identify, classify and categorize the wage attachment
If you must add a category for the deduction you are initiating, use the application utilities Lookups window to enter additional categories for this Lookup type:
US_INVOLUNTARY_DEDUCTIONS
If the wage attachment amounts come from a payroll table you must set up this table and enter values in it before defining the deduction.
Note: If the rows of a payroll table reference something other than employee pay, age or job class (that is, if the table row type is not Age Range, Salary Range or Job Class), both the table row type and the table must be set up before you define the deduction.
Set the effective date early enough to handle any historical entries.
Important: You cannot enter a deduction for employees before its effective start date.
In the Deduction window, enter a unique name for the wage attachment.
This name applies both to the deduction element and its formula. It must start with a letter of the alphabet, not a number or symbol. Also supply a reporting name, a short name that appears on reports and the statement of earnings.
Important: You cannot reuse the name of a wage attachment for an employee. Each wage attachment must have a unique name.
Select the Wage Attachment classification.
Select a category.
For wage attachments you must select a category, such as alimony, or credit debt. For Federal DCIA attachments, select the category garnishment or credit debt.
The system automatically sets up the processing rules and arrearage rules for the wage attachment.
Processing Order for Involuntary Deductions
The following is a list of processing order that the application uses to process involuntary deductions:
Alimony
Child Support Order
Spousal Support Order
Tax Levy (Federal Tax Levy)
State Tax Levy
Local Tax Levy (Local Tax Levies are not supported by Oracle Payroll)
Bankruptcy Order
Credit debt
Debt Collection Improvement Act
Educational Loan
Garnishments
Employee Requested
To produce checks for payment of Wage Attachments to individuals or organizations named in attachment orders, you make use of third-party payment methods.
You must create multiple payment methods to allow the attachment numbers for separate involuntary deduction to display on all third-party payments.
To set up payments of a Wage Attachment
Enter the recipient of the payments, either an individual or an organization, into the database. The name and address of the recipient appears on the payment checks.
For an attachment payable to an individual, use the Contact window to enter the individual as a contact of the employee, with the relationship Payments Recipient.
See: Entering Next of Kin and Other Contacts, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide
For an attachment payable to an organization, use the Organization window to enter the organization's location and then the organization, giving it the classification Payee Organization.
See:
Setting Up Site Locations, Oracle HRMS Enterprise and Workforce Management Guide
Creating an Organization, Oracle HRMS Enterprise and Workforce Management Guide
Define a third-party payment method for use in your enterprise, using the Organizational Payment Method window. In the Valid Payment Methods window, select this method as a valid payment method for the payroll to which the employee with the Wage Attachments is assigned.
See:
Defining Payment Methods for the Enterprise, Oracle HRMS Payroll Processing Management Guide
Defining a Payroll, Oracle HRMS Payroll Processing Management Guide.
Using the Personal Payment Method window, select the third-party payment method (Step 2 above) as a personal payment method for the employee subject to the Wage Attachment. Enter on this personal payment method the type (individual or organization) and name of the payee.
See: Entering Payment Methods for an Employee Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide
For the employee subject to the Wage Attachment, use the Element Entries window to make entries to the input values of the Wage Attachment. In the Payee Details field, select the name of the personal payment method set up to make the payments for this attachment.
Entries to the deduction's input values provide essential information about the Wage Attachment, such as its unique identification number, its amount, the date it was served, and arrearage to be recovered.
After processing the Wage Attachment in a payroll run and running the Pre-Payments process for the run results, you are ready to produce a check for payment of the Wage Attachment.
See Running the Payment Process, Oracle HRMS Payroll Processing Management Guide
Use the Element Entries window (or BEE) to enter a wage attachment for an employee.
To establish a wage attachment on an employee's record
Query the wage attachment and open the Entry Values window.
Enter the appropriate required, suggested, and optional values for the wage attachment entry values.
Note: Much of this information can be found on the court order for the wage attachment.
Note: Federal Tax Levies continue to accrue interest until fully paid; the face amount of the levy is seldom the amount actually due.
Select a processing priority, if desired.
To produce a check for payment of a Wage Attachment, run the Check Writer process from the Submit Request window.
To produce a check for payment of a Wage Attachment
In the Name field of the Submit Request window, select Check Writer. If the Parameters window does not open automatically, click in the Parameters field.
For the Payroll parameter, select the payroll to which the employee subject to the Wage Attachment has an assignment. The default consolidation set of this payroll appears in the Consolidation Set field. You can select a different consolidation set.
In the date fields, enter the date of the Pre-Payments process on whose results this Check Writer process depends. To produce a number of checks for Wage Attachments for which Pre-Payments processes were run over a period of time, enter the start and end dates of this time period.
For Payment Method, select the name of the third-party payment method to be used for making this payment. For Check Style, select Third Party Check.
The Sort Sequence defaults to Organization, Person. If other sequences are defined for your installation, you can select one of them.
For Start Check Number, enter the number of the first check to produce in this check run.
Choose OK, then Submit.
Note: Consult with your supplier of business forms to determine the formatting and numbering system to use on your checks.
Note: Oracle has worked with Evergreen Business Forms Inc. (telephone 1-800-248-2898) to produce check formats for use with Oracle Payroll.
Use the Element Entries window.
To change wage attachments on an employee's record
Open the Entry Values window for the employee's wage attachment.
Update the deduction amount, or other details for the employee.
Save the updated deduction amount.
If you need to end a wage attachment (such as when an employee makes a lump sum payment to the Payee and the court issues a release notice, or when a dependent child reaches legal maturity), you can manually stop the wage attachment. Use the Element Entries window.
To end a wage attachment
Select Delete from the Edit menu, and choose Yes in the Decision dialog box.
The system displays a dialog box asking if you want to purge the record from the database or if you want to set an effective end date.
Important: If there is any history associated with this wage attachment, the software will not allow you to purge this record. In this situation, you must set an effective end date.
Select the option that is best for your situation.
Save your changes.
Wage attachment earnings rules allows you to date effectively define and maintain which supplemental and imputed earnings should be included as part of disposable income for support orders or other garnishments. Use the Wage Attachment Earnings Rules window.
To create a wage attachment earnings rule
Set your effective date.
Select Supplemental Earnings for the earnings type.
Note: The earnings types Imputed Earnings or Pre-Tax Deductions are provided for informational purposes only. These views enable you to double-check that the system is not attaching to imputed earnings or pre-tax deduction items.
Select the appropriate level such as Federal or State and elect the appropriate state from the list of values, if needed.
Note: The State Tax Levy column in the Subject To region is applicable only to the State level. The State Tax Levy column gets disabled for the Federal level.
For each earnings category you defined, select the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
Note: Oracle Payroll interprets the earnings category as not subject to attachment if a category is left unchecked.
Save your changes.
You can update your earnings rules to date effectively maintain which Supplemental and Imputed earnings should be included as part of disposable income for support orders or other garnishments. Use the Wage Attachment Earnings Rules window.
To update a wage attachment earnings rule
Set your effective date.
Query the wage attachment earnings rule you want to update.
Make changes to the rule as appropriate.
Save your changes.
You can date effectively end Supplemental and Imputed earnings rules. Use the Wage Attachment Earnings Rules window.
To end a user-defined wage attachment earnings rule
Set your effective date.
Query the wage attachment earnings rule you want to end.
For each category, uncheck the appropriate rule: Support Disposable Income or Other Wage Attachment Disposable Income.
Save your changes.
You create a wage attachment fee rule (frequency and amount, initial startup fee, and so on) and associate it with a wage attachment fee category for the specific states in which you have employees residing.
Note: For each state there can exist only one rule per Wage Attachment category. You cannot have multiple Wage Attachment fee rules per Wage Attachment category in the same state.
Use the Wage Attachment Fee Rules window.
To create a wage attachment fee rule
Set your effective date appropriately.
Select information for State, Category, and Rule from the list of values for each field.
Fill in appropriate amounts in the amount fields according to your company policies including correspondence fees.
Save your fee rule.
You can update your Wage Attachment fee rules to change fee amounts, to adjust the cap, or the frequencies of attachments. You cannot update the state or category as that would in effect be creating a new Wage Attachment fee rule.
Use the Wage Attachment Fee Rules window.
To update a Wage Attachment fee rule
Set your effective date appropriately.
Query the Wage Attachment rule you wish to update.
Change the values that need updating, such as the Wage Attachment fee rule, or the amount of the Wage Attachment fee.
Save your Wage Attachment fee rule.
Select Update from the dialog box, or if the nature of your update is to correct a Wage Attachment fee rule that has incorrect information, select Correct.
If there are no records associated with a Wage Attachment rule, you may want to delete the rule. However, once a Wage Attachment fee rule is in use, you should not delete it.
Use the Wage Attachment Fee Rules window.
To end a wage attachment fee rule
Set your effective date appropriately.
Query the fee rule you want to end.
Change the Amount to zero dollars.
Save your fee rule.
Choose Update from the dialog box.
If a Wage Attachment fee rule concluded by setting the values of the amount categories to zero, you can reinstate the rule by updating the amount value.
Use the Wage Attachment Fee Rules window.
To reinstate a Wage Attachment fee rule
Set your effective date appropriately.
Query the fee rule you want to reinstate.
Change the Amount from zero to the correct amount.
Save your reinstated fee rule.
Select Update from the dialog box.
You can use the Wage Attachment Exemption Rules window to view legislative data for informational purposes only. This window displays all legislative rules supported by Oracle Payroll concerning disposable income exemption calculations for wage attachments.
You can use the Wage Attachment Limit Rules window to view the currently identified limit rules: minimum and maximum withholding amounts per period, maximum withholding duration. These rules can be affected by different state and wage attachment categories.
To view Wage Attachment Exemption Rules
Run a query in the Wage Attachment Exemption Rules window.
To view Wage Attachment Limit Rules
Run a query in the Wage Attachment Limit Rules window.
The Federal Fair Labor Standards Act (FLSA) provides guidelines for the payment of overtime hours worked by an employee. Oracle Payroll complies with the FLSA guidelines and enables you to do the following:
Calculate the blended rate for overtime. Oracle Payroll calculates the blended rate as all earnings marked as FLSA eligible and dividing this amount by all FLSA eligible hours.
Specify overtime periods, such as bi-weekly, weekly, and monthly overtime periods
Define calculation rules for premium pay for overtime worked by the employees, both salaried and hourly
The following sections describe the components you use to define the calculation of overtime that reflects your business requirements.
The overtime period specifies the beginning and length of the overtime period that the application uses in the overtime calculation. You assign an overtime period to every employee eligible for overtime pay. The payroll process uses the time definition effective as of the pay period end date if there are multiple time definitions associated to the assignment.
You create overtime periods based on your specific business requirements. For example, if your overtime period is a standard five day work week, you would use Static Period in Time and select weekly for the period. If you have employees that work from Wednesday to Tuesday, you would use Point in Time to define the overtime period and specify the starting date and the length of time of the period.
You must associate an overtime period at either the payroll or assignment level. The payroll process checks for an overtime period on the employee element entry level and if none is found checks the Payroll Description window. If the payroll process does not find a time definition, the employee is not included in the overtime calculation.
If your enterprise uses employment agreements, you can use a collective agreement and entitlement to specify an overtime period. You:
Associate the FLSA Time Definition information element to an entitlement.
Associate the entitlement to a collective agreement.
Assign the collective agreement to an employee assignment.
You select a Premium Calculation Rule of Blended Rate or Higher of Blended or Normal Rate. The application uses the rate you select to calculate the premium portion of overtime. The premium portion of overtime is paid at a differential pay rate, with the differential rate being 50% or more depending on the business requirement. Oracle Payroll calculates the premium or blended rates as FLSA Earnings/FLSA Hours. The formula compares the blended rate to the standard rate using work schedule/standard hours and salary administration. The fast formula multiples the rate by a factor of .5 to calculate the employees rate of pay. You can change the factor value to 1 to specify doubletime.
Oracle recommends you create user defined Regular Salary, Regular Wages, Time Entry Wages and multiple Overtime elements consisting of a Straight Time Overtime and Premium Overtime element. The new user defined elements deliver all the functionality necessary for the correct FLSA calculation without any modifications to formulas or result rules. You should not use the predefined Regular Salary, Regular Wages, Time Entry Wages and Overtime element in your payroll set up for FLSA.
Oracle Payroll uses the term Augments to refer to amounts paid which are in addition to the employee's regular rate of pay and which are considered non-discretionary.
The FLSA functionality prorates the augment amounts across all periods during which it was earned. For example, you pay employee commissions monthly, and the salary semi-monthly. The commission is evenly divided over the pay periods during the period it was earned with 50% allocated to each semi-monthly pay period.
Modify your user defined FLSA earnings elements fast formula to include the reduce regular code. This code modification will ensure that the earnings element will be reduced by any earnings element marked as reduce regular, for example, vacation pay. The reduce regular element is automatically generated when you create your FLSA earnings elements.
The reduce regular element continues to work with the predefined Regular Salary and Regular Wages element and now also works with user defined elements attached to a salary basis. Oracle Payroll creates the formula and result rules for all earnings elements.
There are various ways you can define your overtime earnings elements. The set up of your overtime elements depends on your business requirements, and how you want to track and display the elements on the Statement of Earnings.
You specify the date earned on the straight time entry unless you want the payroll process to allocate the earnings to all contributing weeks of the payroll period.
If you enter an override on the regular salary element, the payroll process does not allocate the override value to different time definition periods, but to the entire pay period. If you do not enter a rate, the application calculates the blended rate for the allocation period. The application also calculates the regular rate and uses the greater of the two amounts to calculate the premium.
You assign FLSA Earnings, Overtime and Augment elements to individual employees, or to groups of employees using Batch Element Entry. Since the elements are non recurring, you must assign the elements each time the employee is paid these earnings.
If an overtime period spans multiple pay periods and there is no rate entered for the Premium element, Oracle calculates an adjustment entry. The FLSA Period Adjustment element creates an adjustment for the premium portion of overtime for the entire overtime period. Oracle Payroll seeds an indirect element named <base element name> for FLSA Period Adjustment. For example, if your element is named ABC Earnings, your adjustment element is ABC Earnings for FLSA Period Adjustment. A proration event called Entry Changes for Proration is automatically attached to this element. Oracle Payroll creates a FLSA Period Adjustment element for all elements you define using the Premium calculation rule.
You must link all FLSA Period Adjustment elements for the application to generate element entries. If you want the entries to transfer to the General Ledger, you must also enter costing data at the element link level.
Oracle HRMS enables you to calculate proportionate earnings or deductions amounts whenever relevant payroll data changes during a payroll period. For example, if an employee joins or leaves the company or an employee's pay grade changes. If the amount of an element changes mid pay period, the application prorates the amount based on the number of days in the pay period.
Oracle Payroll uses the term Allocation to describe elements that have no attribute for date earned. During the payroll process, the formula evaluates the FLSA Overtime Period for the assignment and allocates the earnings accordingly. A pay period can have several contributing FLSA periods with a length of any number of days. Oracle Payroll determines the number of allocated periods during the payroll process. For example, if you have a bi-weekly pay period (14 days) and a weekly overtime period (7 days) and you have a recurring earnings element of $1000.00, the application generates two allocated run results of $500.00, one for each pay period.
Allocation periods may be further broken down when a proration event occurs.
Important: Customers who use Information elements to feed the FLSA related elements must complete a mandatory step for correct processing of FLSA. See: Setting up Fair Labor Standards Act (FLSA) for Payment of Overtime Hours
Oracle US Payroll provides the flexibility to report each applicable set of FLSA Overtime and Premium Earning records as a consolidated (single) record on the employee's wage statement. Overtime earnings can be reported as a consolidated record in the:
Online Payslip (both HTML and PDF-based).
Checks produced by running the Check Writer(XML) report.
Deposit advices produced by running the Deposit Advice (XML) report.
This flexibility helps to properly comply with state overtime reporting rules concerning the employee's wage statement, for example, California state and any other applicable state.
See: How to Consolidate Reporting of FLSA Overtime Earnings in Employee Wage Statements Document 1914462.1 available on My Oracle Support.
Oracle HRMS enables you to calculate proportionate earnings or deductions amounts whenever payroll relevant data changes during a payroll period such as, an employee joins or leaves the company or an employee's pay grade changes.
If the amount of an element changes mid pay period, the application prorates the amount based on the number of days in the pay period.
To configure Proration for FLSA, you create an Event Group. An Event Group is a collection of proration points that share similar characteristics. For example, salary increases, pay rate changes and assignment changes are all proration points. To prorate an earning or deduction, you assign an event group to the element.
See Configuring Proration for FLSA
Oracle Payroll uses the term Allocation to describe elements that have no attribute for date earned. During the payroll process, the formula evaluates the FLSA Overtime Period for the assignment and allocates the earnings accordingly. A pay period can have several contributing FLSA periods with a length of any number of days.
Oracle Payroll determines the number of allocated periods during the payroll process. For example, if you have a bi-weekly pay period (14 days) and a weekly overtime period (7 days) and you have a recurring earnings element of $1000.00, the application generates two allocated run results of $500.00 , one for each pay period.
Allocation periods may be further broken down when a proration event occurs.
The Fair Labor Standards Act provides for minimum standards for both wages and overtime entitlement, and defines the administrative procedures you must use to compensate covered worktime.
To set up FLSA for payment of overtime hours:
Define the overtime periods. See: Defining an Overtime Period, Oracle HRMS Payroll Processing Management Guide
If your enterprise wants to use collective agreements and entitlements to associate time definitions with employee assignments complete this step. You can create new collective agreements and entitlements or you can create new entitlements and associate the entitlements with existing collective agreements. See: Defining an Entitlement Item for a Collective Agreement, Oracle HRMS Enterprise and Workforce Management Guide , Setting Up a Collective Agreement, Oracle HRMS Enterprise and Workforce Management Guide
If you do not use collective agreements, skip to Step 3.
Assign an Overtime Period to a payroll. You can update an existing payroll or create a new payroll based on the needs of your enterprise. See: Further Payroll Information Window, Payroll Processing Management Guide
Select the Premium Calculation Rule for the payroll. See: Further Payroll Information Window, Payroll Processing Management Guide
Assign an Overtime Period to an Employee. See: Assign an Overtime Period to an Employee, Payroll Processing Management Guide
Create earnings elements you use to calculate overtime under FLSA guidelines. See: Identifying an Earnings or Payment
Modify your user defined FLSA earnings elements fast formula to include the reduce regular code. This code modification will ensure that the earnings element will be reduced by any earnings element marked as reduce regular, for example, vacation pay. The reduce regular element is automatically generated when you create your FLSA earnings elements.
Create Augment elements. Oracle Payroll uses the term Augments to refer to amounts paid which are in addition to the employees regular rate of pay and are considered non-discretionary. See:Identifying an Earnings or Payment
Assign FLSA elements and Augment elements to employee assignments. See: Making Manual Element Entries, Compensation and Benefits Management Guide
Link and cost the FLSA Period Adjustment element. See: Creating Overtime Elements
Configure Proration to enable Oracle Payroll to calculate proportionate earnings or deduction amount when relevant data changes during a payroll run, such as, an employee joins or leaves the company or an employee's pay grade changes. See:Configuring Proration for FLSA
Important Note to Customers who use Information Elements to Feed the FLSA Related Elements
You can use Information Elements and custom formulas to create the required inputs for the FLSA elements. Oracle Payroll for US processes FLSA elements with the supplied inputs. To process FLSA related information elements correctly, the TIME_DEFINITION_TYPE must be added to all those elements which create run results that feed balances having dimension "Assignment Within GRE Time Definition Run".
To add the TIME_DEFINITION_TYPE, complete the following steps:
Navigate to the Element window (Total Compensation > Basic > Element Description).
Query the FLSA element with Information as the primary classification.
Click Proration.
In the Allocation section, select the Generated option. This step ensures that the TIME_DEFINITION_TYPE is added to the element for successful processing of FLSA.
To configure proration for FLSA:
Define an Event Group for the proration event.
Select the Incident Register in the Functional Area on the Functional Area Maintenance window.
Insert the appropriate triggers in the Functional Area.
Attach the Proration (or Event) Group to each element.