PeopleSoft Global Payroll for Mexico 9.1 PeopleBook

Defining Earnings

This chapter provides an overview of earnings based on the minimum wage and discusses how to:

Define parameters for Christmas bonuses and vacation premiums.
Define PTU (Participación a los Trabajadores de las Utilidades).
Set up frequently used supporting element overrides.

Note. The different earning types in Mexico are discussed in another chapter in this PeopleBook.

See Also

Understanding Earnings Based on the Minimum Wage

Some earnings are calculated in relation to the minimum wage. For example, the Sunday premium and savings fund earnings are tax-exempt up to an amount equal to the minimum wage. Any amount over the minimum wage is taxed. To define the minimum wage used in these calculations, use the Minimum Wages MEX page.

See Also

Defining Minimum Wages

Defining Parameters for Christmas Bonuses and Vacation Premiums

To define parameters for the Christmas bonus, vacation days, vacation premium percentage, the SDI factor, and the vacation premium type, use the Pay Groups MEX (GPMX_PARM_PYGRP) component.

This section provides an overview of the SDI factor calculation and discusses how to:

Define Christmas bonus days, vacation days, and vacation premium percent.
Define vacation premium types.

Understanding the SDI Factor Calculation

Christmas bonuses and vacation premiums can be calculated based on either the daily salary or the average salary. To set up the calculation of the Christmas bonus and vacation premium, define an SDI factor on the Xmas, Vac, Premium, SDI Factor page. The SDI factor represents the amount over the daily salary or average salary that the employee makes because of the vacation premium and the Christmas bonus.

Global Payroll for Mexico calculates the SDI factor automatically based on parameters that you enter on the Xmas, Vac, Premium, SDI Factor page. The parameters are:

Number of Christmas bonus days.
Number of vacation premium days.
Vacation premium percent.

Based on the Christmas bonus days, the vacation premium days, and the vacation premium percent, the system determines the SDI factor, and uses it to:

Calculate IMSS quotas.
Define the base used to calculate vacation premiums and Christmas bonus amounts.

Example: Calculating the SDI Factor

For example, if the Christmas bonus is 30 days, and the number of vacation days is 10, with a premium of 25 percent, the system calculates the SDI factor as follows:

Determine the portion of the SDI factor due to the Christmas bonus by dividing the number of Christmas bonus days by 365 (days in year).

The result is the percentage over the daily or average salary that must be paid to the employee due to the Christmas bonus.

Note. In this example, divide 30 by 365 (30 / 365 = 0.0821915).
Determine the vacation premium portion of the SDI factor by dividing the number of vacation days by 365 (days per year), and multiplying the result by the premium percent.

The result is the percentage over the daily or average salary that must be paid to the employee due to the vacation premium.

Note. In this example, divide 10 by 365 and multiply the result by 25 percent (10 / 365) × 0.25 = 0.0069).
Add the results of steps 1 and 2.

The result is the percentage over the daily or average salary that must be paid to the employee due to the vacation premium and Christmas bonus.

See Also

Defining Social Security Contributions

Pages Used to Define Parameters for Christmas Bonuses and Vacation Premiums

Page Name	Definition Name	Navigation	Usage
Xmas, Vac, Premium, SDI Factor (Christmas, vacation, premium SDI factor)	GPMX_SDI_FACTOR	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, Xmas, Vac, Premium, SDI Factor	Define the number of Christmas bonus days, vacation days, vacation premium percent, and SDI factor by employee (based on employee seniority).
Absences	GPMX_ABS_PYGRP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, Absences	Define the vacation premium type.

Defining Christmas Bonus Days, Vacation Days, and Vacation Premium Percent

Access the Xmas, Vac, Premium, SDI Factor page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, Xmas, Vac, Premium, SDI Factor).

Seniority

Enter the seniority level. This field enables you to define changes, based on seniority levels, in the parameters used to calculate the SDI factor (vacation days, vacation premium percent, and Christmas days).

Vacation Days

Enter the vacation days corresponding to the seniority level.

Vacation Premium % (vacation premium percent)

Enter the vacation premium percent corresponding to the seniority level.

Christmas Days

Enter the number of Christmas bonus days corresponding to the seniority level.

SDI Factor

This field is populated automatically based on the values that you entered in the Vacation Days, Vacation Premium %, and Christmas Days fields.

Defining Vacation Premium Types

On the Absences page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, Absences), define the vacation premium type.

The vacation premium type determines whether the vacation premium is paid out all at once on a defined date each year (Annual), or on the anniversary of the employee's hire date (Anniversary) or from pay period to pay period (Proportional), depending on the number of vacation days that the employee has taken.

Note. The Absences page is discussed in another chapter in this PeopleBook.

See Also

Defining Absence Rules

Defining PTU (Participación a los Trabajadores de las Utilidades)

To define the adjustment factor and maximum days for PTU, use the Pay Groups MEX (GPMX_PARM_PYGRP) component. To define PTU parameters and identify PTU elements and payees, use the Define PTU - Profit Share MEX (GPMX_PARM_COMPANY) component.

This section provides an overview of the PTU process and discusses how to:

Define the adjustment factor and maximum days.
Define PTU parameters.
Identify PTU elements and payees.

Understanding the PTU Process

To define and run the PTU process:

Define the adjustment factor and maximum days for PTU (profit-sharing) on the PTU page.
Define PTU parameters on the PTU Setup page.
Identify PTU elements and payees on the PTU Elements/Payees page.
Run the PTU process on the Calculate PTU-Profit Share MEX page.

Note. Running the PTU process is discussed in another chapter in this PeopleBook.

See Running the PTU (Profit Sharing) Process.

Understanding the Adjustment Factor and Maximum Days for PTU

The PTU page enables you to:

Standardize the number of PTU (profit-sharing) days across all pay groups in your company, regardless of the calendar used for each group.

For example, suppose that you have a monthly pay group based on a 360 day per year calendar (in which all months are defined as having 30 days), and a weekly pay group based on a 365 day calendar (using actual calendar days). To bring the number of profit-sharing days for the monthly pay group up to 365, enter a daily adjustment factor on the PTU page for the monthly pay group. Multiply this amount by 360 to bring the number of days up to 365. In this example, the amount is 365 / 360 (= 1.0138888).
Define the maximum number of days that can be used in the profit-sharing calculation.

Pages Used to Define PTU

Page Name	Definition Name	Navigation	Usage
PTU	GPMX_PTU_GP_PYGRP	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, PTU	Set the adjustment factor and maximum days for profit-sharing at the pay group level.
PTU Setup	GPMX_PTU_COMPANY1	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Allowances/Other Benefits, Define PTU-Profit Share MEX, PTU Setup	Define PTU parameters at the company level.
PTU Elements/Payees	GPMX_PTU_COMPANY2	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Allowances/Other Benefits, Define PTU-Profit Share MEX, PTU Elements/Payees	Identify the PTU elements and payees. Identify the earnings and deductions used for profit sharing, assign profit sharing elements to accumulators, and exclude ineligible employees from the profit sharing process.

Defining the Adjustment Factor and Maximum Days

Access the PTU page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Pay Groups MEX, PTU).

Daily Adjust Factor (daily adjustment factor)

Enter the multiplication factor needed to adjust the number of PTU days for the specified pay group. For example, if your pay group is based on a 360-day-per-year calendar, and you want to adjust the calendar to 365 days, enter 1.013888 (365 / 360).

Max Days (maximum days)

Enter the maximum number of days that can be included in the profit-sharing calculation. For example, you might decide to pay an employee's vacation balance at the moment of termination. At this point, the employee might have more than 365 PTU days. In this case, if the earnings that you use to pay the vacation balance are part of the profit-sharing process, you can reduce the PTU days to 365 (or any other amount).

Defining PTU Parameters

Access the PTU Setup page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Allowances/Other Benefits, Define PTU-Profit Share MEX, PTU Setup).

Year

Enter the year for which you are processing your profit sharing earnings.

Apply Proportional Worked Days

Select this check box if the ceiling salary used to calculate PTU earnings should be adjusted to reflect the number of days that an employee actually works. For example, if the ceiling salary is 240,000, and an employee works 250 days during the year, the ceiling salary for that employee is reduced proportionally—that is, it is set to 164,383.56 ((240,000 / 365) × 250).

Amount

Enter the amount to be shared.

Ceiling Salary

Enter the maximum amount of an employee's salary that can be used to calculate the employee's portion of PTU earnings. To determine the amount, calculate the salary of the union employee with the highest wages, add 20 percent to this amount, and enter the total in the Ceiling Salary field. If an employee who is eligible for profit sharing makes more than the amount that you enter here, profit sharing is capped at this amount.

Temp Payee? (temporary payee) and Days

Select Temp Payee? to include all temporary employees in your profit sharing plan.

To limit the temporary employees who can participate in the plan, select Temp Payee? and enter the number of days that temporary employees must work at your company to participate in profit sharing. For example, if you select Temp Payee? and enter 60 in the Days field, only temporary employees who work 60 days or more are included in the PTU plan.

Day Factor

Displays the PTU Total for all Employees/Worked Days Total for all Employees. This figure is calculated automatically when you run the PTU process.

Salary Factor

Displays the PTU Total for all Employees/Salary Sum Total for all Employees. This figure is calculated automatically when you run the PTU process.

Identifying PTU Elements and Payees

Access the PTU Elements/Payees page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Allowances/Other Benefits, Define PTU-Profit Share MEX, PTU Elements/Payees).

PTU Elements

Element Name

Enter the earnings and deduction accumulators to include in the PTU process.

Accumulator Sign

Select an accumulator sign. Values are:

Add: Adds the earnings and deduction accumulators specified in the Element Name field to the PTU base.

Subtract: Subtracts the earnings and deduction accumulators specified in the Element Name field from the PTU base.

Acum Type (accumulator type)

For each element that you specify in the Element Name field, select Amount or Units.

Important! When you define an earnings element that you know must be included in the PTU process, create year-to-date accumulators storing both amounts and units for that element. (You can set up an accumulator for units only if the element includes a unit component in its definition.) Otherwise, you will not have the flexibility to accumulate both units and amounts.

Non Eligible Payees

Enter the employee ID and employee record number for employees who do not qualify for inclusion in the profit sharing process.

Setting Up Frequently Used Supporting Element Overrides

To define frequently used supporting element overrides in Mexico, use the Earn/Ded SOVRs MEX (GPMX_ERNDED_SOVR) component.

This section provides an overview of frequently used supporting element overrides in Mexico and discusses how to enter overrides.

Understanding Frequently Used Supporting Element Overrides in Mexico

Global Payroll for Mexico enables you to define the most frequently used supporting element overrides (SOVRs) for earnings and deductions on the Earn/Dedn SOVRs MEX page. This includes the following:

Supporting elements used to specify a tax method.
Supporting elements used to select earnings and deductions for inclusion in the Minimum Wage Salary Level report (report GPMXAA01).
Supporting elements used to associate earnings and deductions with a termination version.

Before you can run a payroll, a Minimum Wage Salary Level report, or a termination process, you must:

Enter basic information on the Earn/Dedn SOVRs MEX page about which earnings and deductions to include in each tax method and each row of the Minimum Wage Salary Level report.
Specify which earnings and deductions to include in each termination version.

Understanding Element Overrides

The information that you enter on the Earn/Dedn SOVRs MEX page is inserted as a supporting element override for these variables at the earnings and deduction level:

Type of Override	Variable
Tax Method	FD VR METODO ISR
Salary Level Group	AA VR NIVEL SAL
Termination Versions	Variables LF VR VER FINIQ 01 through LF VR VER FINIQ 10

See Also

Setting Up Terminations

Managing Taxation

Global Payroll for Mexico Reports

Page Used to Set Up Frequently Used Supporting Element Overrides

Page Name	Definition Name	Navigation	Usage
Earn/Dedn SOVRs MEX (Earnings/Deductions SOVRs MEX)	GPMX_ERNDED_SOVR	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earn/Ded SOVRs MEX, Earn/Dedn SOVRs MEX	Set up SOVRs at the earnings and deduction level for variables used in key calculations.

Entering Overrides

Access the Earn/Dedn SOVRs MEX page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Elements, Payroll Elements, Earn/Ded SOVRs MEX, Earn/Dedn SOVRs MEX).

Tax Method/Salary Levels Tab

Entry Type	For a Minimum Wage Salary Level report: Define the type of element to include in the report. You can include only earnings or deductions. For tax method selection: Define the type of element to which you want to apply a tax method using the Tax Method field. You can include only earnings or deductions.
Element Name	For a Salary Level report: Enter the name of the earnings or deductions element to include in the Minimum Wage Salary Levels report (report GPMXAA01). For tax method selection: Enter the name of the earnings or deductions to which you want to apply a tax method using the Tax Method field.
Begin Date	Enter the begin date of the supporting element override.
End Date	Enter the end date of the supporting element override.
Tax Method	Define the tax method to apply to each earnings and deduction identified in the Entry Type and Element Name fields.
Salary Level Group	For a Minimum Wage Salary Level report, specify the salary level group in which you want to include the earnings or deductions identified in the Element Name field.

Term Vers 01-05 and Term Vers 06-10 Tabs

Term Vers 01-10 (termination versions 1-10)

This field is used to associate earnings and deductions with termination versions. For each earnings or deduction that you identify in the Entry Type and Element Name fields, specify the termination versions (the grouping of termination actions and reasons) for which the earnings and deductions can be paid. Select up to 10 different termination versions for each earnings and deduction.

Note. To associate a termination version with an earnings or deduction, the termination version must already be defined on the Termination Version and Termination Action Reason pages, and the earnings or deduction must be linked to one of the delivered variables LF VR VER FINIQ 01 through LF VR VER FINIQ 10 on the Supporting Elements Override page. (LF VR VER FINIQ 01 through LF VR VER FINIQ 10 are delivered variables representing termination versions.)

See Setting Up Terminations.

Seniority	Enter the seniority level. This field enables you to define changes, based on seniority levels, in the parameters used to calculate the SDI factor (vacation days, vacation premium percent, and Christmas days).
Vacation Days	Enter the vacation days corresponding to the seniority level.
Vacation Premium % (vacation premium percent)	Enter the vacation premium percent corresponding to the seniority level.
Christmas Days	Enter the number of Christmas bonus days corresponding to the seniority level.
SDI Factor	This field is populated automatically based on the values that you entered in the Vacation Days, Vacation Premium %, and Christmas Days fields.

Year	Enter the year for which you are processing your profit sharing earnings.
Apply Proportional Worked Days	Select this check box if the ceiling salary used to calculate PTU earnings should be adjusted to reflect the number of days that an employee actually works. For example, if the ceiling salary is 240,000, and an employee works 250 days during the year, the ceiling salary for that employee is reduced proportionally—that is, it is set to 164,383.56 ((240,000 / 365) × 250).
Amount	Enter the amount to be shared.
Ceiling Salary	Enter the maximum amount of an employee's salary that can be used to calculate the employee's portion of PTU earnings. To determine the amount, calculate the salary of the union employee with the highest wages, add 20 percent to this amount, and enter the total in the Ceiling Salary field. If an employee who is eligible for profit sharing makes more than the amount that you enter here, profit sharing is capped at this amount.
Temp Payee? (temporary payee) and Days	Select Temp Payee? to include all temporary employees in your profit sharing plan. To limit the temporary employees who can participate in the plan, select Temp Payee? and enter the number of days that temporary employees must work at your company to participate in profit sharing. For example, if you select Temp Payee? and enter 60 in the Days field, only temporary employees who work 60 days or more are included in the PTU plan.
Day Factor	Displays the PTU Total for all Employees/Worked Days Total for all Employees. This figure is calculated automatically when you run the PTU process.
Salary Factor	Displays the PTU Total for all Employees/Salary Sum Total for all Employees. This figure is calculated automatically when you run the PTU process.