Setting Up and Working with Frequencies

This chapter provides overviews of frequency IDs, frequency for compensation conversions, frequency in PeopleSoft Global Payroll, and frequency in PeopleSoft Payroll for North America, and discusses how to define a frequency ID and country-specific defaults.

Understanding Frequency IDs

This section discusses:

• Frequency IDs.

• Frequency with compensation rates.

• Frequency with payroll calculations.

Frequency IDs

Frequency IDs are used in PeopleSoft Human Resources, Global Payroll, and Payroll for North America. Frequency IDs are defined on the Frequency Table component (FREQUENCY_TBL). Each frequency ID has a frequency type and an associated annualization factor that represents the number of times that the period occurs in the course of a year.

In PeopleSoft HCM, you use frequency IDs to define the periods of time in which compensation is quoted, standard hours are completed, and people are paid, to list a few examples.

PeopleSoft delivers a set of standard frequencies that are PeopleSoft-maintained. You can define additional, customer-maintained frequencies for nonstandard periods. For example, you could define a monthly-type frequency with a nonstandard annualization factor of 13 to represent 13 monthly periods in a year

PeopleSoft-Maintained Frequencies

PeopleSoft delivers and maintains the following frequency IDs in the Frequency Table component:

Frequency with Compensation Rates

When you associate frequency with compensation rates, you define the time period on which the compensation is based. For example, you might state a worker's base salary as 60,000 a year (annual frequency) or 5,000 a month (monthly frequency). When you associate these compensation rates with jobs, positions, salary steps, or individual job records, the system uses the annualization factor that is associated with this frequency to convert the compensation to other frequencies.

When you set up PeopleSoft Human Resources, you can define default compensation frequencies at several levels. You can usually change that default value when the system enters it into other pages.

This table lists important pages on which compensation frequencies are either specified or used:

See Also

Classifying Jobs

Setting Up Rate Codes

Frequency with Payroll Calculations

Global Payroll and Payroll for North America use frequency to define how often certain events happen.

Global Payroll uses frequency IDs when defining elements, generation control parameters, calendar periods, rate code elements, and system elements. In addition to using frequency defined on the Frequency Table page, Global Payroll also uses frequency defined on the Generation Control Frequency page (GP_GCTL_FREQUENCY).

Payroll for North America uses frequency IDs to define pay period frequency and to calculate pay rates and proration of pay.

See Also

Understanding Frequency in Global Payroll

Understanding Frequency in Payroll for North America

Understanding Frequency in Compensation Rate Conversions

This section discusses:

• Factors applied to the compensation rate.

• Conversion of compensation rates to different frequencies.

• Job Data pay rate frequencies.

Factors Applied to the Compensation Rate

PeopleSoft HCM calculates and displays compensation rates in the hourly, daily, weekly, monthly, and other frequencies using standard frequency conversion formulas. Depending on the frequency being converted, the system performs the calculations by applying one or more of the following to the compensation rate:

• Compensation frequency annualization factor.

• Job standard hours.

• Standard work period frequency annualization factor.

• FTE (full-time equivalency) factor.

Frequency Annualization Factor

Each frequency ID has an associated annualization factor that represents the number of times that the period occurs in the course of a year.

See Frequency IDs.

Standard Hours and the Standard Work Period

When converting hourly compensation rates, the frequency conversion calculations use the job standard hours and the standard work period. Job standard hours define how many hours the worker should work in the job. The standard work period defines the work period in which the standard hours should be completed. You define the standard work period by selecting a frequency ID (and its annualization factor) as defined on the Frequency Table component.

You define the standard hours and the standard work period on the following pages:

The minimum and maximum standard hours values and the standard work period defined on the Business Unit HR Defaults page (BUS_UNIT_OPT_HR) are used for validation edits in the Job Data and Position Data components.

Defaults for Standard Hours and Standard Work Period

The system inserts the standard hours and the standard work period as default information only if both are defined. The following table describes the source of defaults in Job data under the specified conditions:

Full-Time Equivalency

Full-time equivalency (FTE) is the percentage of full time that a worker should normally work in a job. In calculating the FTE, the system uses your definition of the standard hours and the standard work period.

If you select Apply FTE for a compensation component, PeopleSoft Human Resources uses the standard hours and the standard work period to compute FTE to prorate holiday hours and pay for part-time and hourly workers.

Note. (FRA) For workers in French regulatory regions, the system uses the PAID_FTE field to prorate holiday hours and pay for part-time and hourly workers.

PeopleSoft Human Resources calculates FTE using the product of the standard hours of the job multiplied by the annualization factor of the job's standard work period which is then divided by the product of the default standard hours multiplied by the annualization factor of the default full time standard hours work period, as shown in this equation:

FTE Equation

In this equation, the default full-time standard hours and default full-time standard work period are from:

• The Salary Plan component (if a salary plan is defined for the worker, and if both standard hours and standard work period are defined for this salary plan).

• The Org Defaults by Permission Lst component (if no salary plan is defined for the worker, and if both standard hours and standard work period are defined in the Org Defaults by Permission Lst component).

Conversion of Compensation Rates to Different Frequencies

The system converts compensation rates to daily, monthly, and other frequencies using standard formulas. The formula for converting to or from an hourly rate takes the standard hours and standard work period into account.

The system performs compensation rate conversions as follows:

1. Finds or calculates the annual rate for compensation.

2. Divides the annual rate using de-annualization conversion calculations to calculate the rate at the desired frequency.

3. Multiplies the converted compensation rate by the FTE factor if Apply FTE is selected for the pay component.

Note. (FRA) For workers in French regulatory regions, the system uses the PAID_FTE field to multiply the converted compensation rate.

Annualized Rate Calculations

The system uses the following formulas to convert compensation rates to an annual frequency:

De-Annualized Rate Calculations

The system uses the following formulas to convert compensation rates from an annual frequency to another frequency:

The following examples illustrate the use of these formulas.

Example of Hourly to Monthly Compensation Rate Conversion

Teresa Johnson has the following job data information:

The following table shows how the system calculates Teresa Johnson's monthly FTE (full-time equivalency) compensation rate. The total represents Teresa's monthly salary based on a thirty-five hour workweek over a fifty-two week year.

Example of Monthly to Biweekly Compensation Rate Conversion

Bill McKenny has the following job data information:

The following table shows how the system calculates Bill McKenny's biweekly compensation rate:

Job Data Pay Rate Frequencies

The system uses the country-specific default frequencies to calculate and display the pay rates in the Pay Rates group box on the Job Data - Compensation page. The system finds the frequencies that are associated with the person's country on the Default Frequencies table. The order you list the frequencies on this table is the order in which the pay rates appear in the Pay Rates group box. The system converts compensation rates to the default frequencies using the standard formulas described in this chapter.

Because the PeopleSoft Global Payroll and Payroll for North America systems calculate daily and monthly pay rates using frequencies established for the pay group, it is possible that the compensation rates displayed on the Job Data - Compensation page will vary from the pay rates calculated with pay group daily and monthly frequencies. This would occur if the pay group daily or monthly frequency differs from the daily or monthly frequency specified for the country on the Default Frequency page. It is recommended that you establish pay group frequencies to match the default frequencies for the country whenever possible.

The pay rates calculated with pay group frequencies are available on the JOB record in the fields JOB.ANNUAL_RT, JOB.MONTHLY_RT, JOB.DAILY_RT, JOB.HOURLY_RT. These fields are referenced by the Job Summary page and can be referenced in PS Query.

See Also

Setting Country-Specific Frequency Defaults

Understanding Frequency in Global Payroll

PeopleSoft Global Payroll uses frequency when defining elements, generation control parameters, calendar periods, rate code elements, and system elements. In addition to using frequency defined on the Frequency Table page, PeopleSoft Global Payroll also uses frequency defined on the Generation Control Frequency component.

This section discusses:

• Frequency with element definitions.

• Frequency with generation control.

• Frequency with calendar periods.

• Frequency with rate codes and system elements.

Frequency with Element Definitions

An element is the smallest component of PeopleSoft Global Payroll, and it is used in defining calculation rules to process your payroll. Elements can hold the values of pay (earnings), an amount to be deducted from pay (deduction), or time away from work (absence).

Elements (such as earnings, deduction, and absence) can be standalone. Supporting elements (such as rate codes or rounding rules) can be used with other elements to define a calculation rule. Each element is defined only once, but it can be used repeatedly.

For any earnings, deduction, or absence element, you must specify the frequency of the stated amount on the Earning/Deduction definition. For each item that you associate with a frequency, you must consider how the frequency fits into the overall processing picture. Selecting the correct frequency for earnings, deductions, and absence elements is essential for correct processing. For example:

In PeopleSoft Global Payroll, you use frequency to define earnings, deduction, or absence elements.

To illustrate, we refer to defining an earnings element. However, the process is the same for earnings, deduction, and absence elements.

You define the calculation rule, frequency, and generation control for an earnings element on the Earnings - Calculation page (GP_ERN_DED_CALC).

See Defining Calculation Rules for an Earning Element.

Select a calculation rule and once you select a calculation rule, you must further define details for each component of the rule. For example, if you select Amount, specify the amount of the earnings element.

The following table lists the calculation rules and the components of the calculation rule for which frequency conversion is performed:

Define the frequency that the stated amount represents. If you select Use Calendar Frequency, the system uses the frequency that's defined for the calendar period on the Define Calendars - Period page (GP_CALENDAR_PERIOD). If you select Use Specified Frequency, you can define your frequency directly on the Earnings - Calculation page by selecting from a list of frequencies.

See Creating Periods.

The Frequency field enables you to tell the system the frequency with which you are stating a value. For example, let's say that you select Use Specified Frequency, that you have a weekly payroll, and you create an earnings element with an amount of 100 and a frequency of Monthly. If you don't have any generation control conditions defined, the system annualizes and de-annualizes the amount into a processing frequency amount. Let's assume that you define your organization's monthly frequency as 12 and the weekly frequency as 52. The system takes the 100 (monthly amount) and annualizes it to 1200. Next, it takes this annualized amount and de-annualizes it into the payroll processing frequency (weekly, in this example). The amount paid each pay period is:

1200 / 52 = 23.08

The benefit of defining a frequency is that if your organization has multiple pay frequencies (such as weekly, semimonthly, and monthly), you don't have to create separate earnings for each frequency. The system automatically converts the amount into the corresponding pay period amount. Let's say that your organization decides to give an annual bonus of 1000 to all payees and this bonus is distributed throughout the year. Your hourly payees get paid weekly and your salaried payees get paid monthly. If you define an earnings bonus as BON = 1000, with a frequency of Annual, you can apply this earnings definition to payees who are paid weekly and payees who are paid monthly by using annualization and de-annualization. The frequency assigned on the Earnings Calculation page calculates the bonus amount correctly, regardless of the pay frequency.

Note. In PeopleSoft Global Payroll, there is no distinction between organizational relationships (employee, contingent worker, or person of interest). Because payroll is processed for all types of people with jobs, the PeopleSoft Global Payroll documentation refers to both of them as payees.

Frequency with Generation Control

Pay period frequency isn't hard-coded into the system. Instead, PeopleSoft Global Payroll uses the HR Frequency Table component to determine how a frequency is calculated. For example, a monthly frequency has a factor of 12 and a weekly frequency has a factor of 52. Frequencies that are defined on the Frequency Table page are easily used wherever you use frequency in the system.

PeopleSoft Global Payroll provides an additional generation control concept called "Generation Control Frequency" to help control the pay periods in which a specific earning or deduction is to be resolved (such as only the first pay period of a month, and so on). Generation control frequencies enable you to define meaningful names and associate the correct frequency ID with a pay period.

An example of a frequency that isn't on the HR Frequency Table is First of the Month. Let's say that you have a weekly pay frequency, but you want an earnings element to be paid only on the first pay period of the month. In PeopleSoft Human Resources, the frequency would be monthly. This might not work for your payroll purposes. So, in PeopleSoft Global Payroll, the earnings element would be defined (tagged) as First of the Month and paid only on the first pay period of the month.

The Generation Control Frequency component is part of generation control frequency processing.

Generation control enables you to tell the system, through various control methods, when to process an element. For example, if an earnings element is to be paid only on the first pay period of the month (for weekly payrolls), you can control the payroll so that this earning is only paid in Week 1, and not paid in the subsequent week's payrolls during the month:

• First you define generation control ID parameters on the Generation Control - Conditions page (GP_GCTL_CONDITION).

  See Naming Generation Control Elements.

• Next, when you define an earnings element, you prompt against this table by selecting a generation control name on the Earnings - Calculation page.

• Then you don't have to redefine the parameters for each earnings element.

If you leave the Generation Control field blank on the Earnings - Calculation page, the system assumes to be paid every time based on normal eligibility rules for the payee.

Note. If the frequency that you select is other than Use Calendar Period Frequency, the system de-annualizes the earnings amount based on the pay period frequency. If a generation control frequency exists, the system de-annualizes the earnings amount based on that frequency. The generation control frequency overrides the pay period frequency during frequency conversion. For example, let's say that you have an earnings element with an amount of 1200, an annual frequency, and a monthly pay period. If your organization's monthly frequency is defined as 12, and you don't have a generation control frequency for this earnings, the amount is de-annualized to 100 per month (1200 / 12 = 100). If you have a generation control frequency for this earnings element, the amount is different. Let's say that you have defined a generation control frequency of quarterly. The earnings are de-annualized to 300 (1200 / 4 = 300).

PeopleSoft Global Payroll delivers four predefined generation control frequencies: 1st Month, Annual, January, and Quarter. All generation control frequencies can be used in corresponding generation control elements.

Using Frequency with Calendar Periods

Use frequency with calendar periods when defining the frequency that's being processed.

When processing a payroll or absence run in PeopleSoft Global Payroll, you must tell the system the time period to calculate. This is often referred to as the pay period. You define period selection criteria by defining a period ID on the Define Calendars - Period page.

See Creating Periods.

The period ID defines the start date, end date, and frequency of a particular pay period. This definition is kept separate from the pay calendar to make it easy to reuse and to provide optimum flexibility during processing.

Here are some examples of the time and frequency data that can be defined by a period ID:

On the Define Calendars - Period page, the frequency is defined for de-annualization when an earnings, deduction, or absence element is defined without generation control frequency. However, if generation control frequency is included (in the earnings, deduction, or absence element definition), and the element generation control and the calendar ID generation control match, the system uses this generation control frequency for the de-annualization factor.

Examples of Frequencies

This table provides some examples of frequencies:

You don't need to specify the associated frequency if it coincides with the pay period frequency.

See Job Data Pay Rate Frequencies.

Using Frequency with Rate Codes and System Elements

When you define an earnings or deduction element that uses either a rate code or a frequency-controlled system element, the earnings or deduction element should always have the frequency Use Calendar Period Frequency. System elements are delivered and maintained by PeopleSoft.

A system element that is frequency-controlled resolves in the calendar frequency portion of payroll processing, according to the frequency that is specified for the element when it is set up. The system then de-annualizes by the calendar frequency.

Understanding Frequency in Payroll for North America

This section discusses:

• Compensation frequency and pay frequency.

• Examples of pay rate calculations.

• Proration of compensation rates.

• Exceptions to Frequency table use.

Compensation Frequency and Pay Frequency

In Payroll for North America you use the frequencies on the Frequency Table component to specify pay period frequency on the Pay Group component. The system uses compensation and pay frequencies for the calculation and proration of pay rates during batch and online system processes.

See Also

Job Data Pay Rate Frequencies

Examples of Pay Rate Calculations

This section provides examples of how the system uses compensation rates and frequencies and pay period frequency to calculate pay rates.

Example: Biweekly Pay Period Calculation of Monthly Compensation

This example illustrates how Payroll for North America calculates the pay period rate by annualizing monthly compensation using the following frequencies:

Using a compensation rate of 1,000 USD, the calculations of the annual compensation rate and pay period compensation rate are:

• Annual Rate = Comprate × Compensation Frequency Factor

  12,000.00 = 1,000.00 × 12

• Pay Period (Biweekly) Rate = (Annual Rate) / Pay Frequency Factor

  459.77 = 12,000.00 / 26.1

Example: Weekly Pay Period Calculation of Hourly Compensation

Payroll for North America uses the annualization factor of the standard work period frequency in combination with the standard hours to calculate pay rates or proration of hourly compensation.

This example illustrates how Payroll for North America calculates the weekly pay period rate of hourly compensation.

The pay group's pay period frequency definition is:

The employee's compensation frequency definition is:

The calculations of the annual compensation rate and pay period compensation rate are:

• Annual Rate = Comprate × (Standard Hours × Standard Work Period Annualization Factor)

  20,800.00 = 10 x 40 × 52

• Pay Period (weekly) Rate = Annual Rate / Pay Frequency Factor

  400 = 20,800.00 / 52

Proration of Pay Rates

The system calculates proration for partial periods when events such as new-hires, terminations, or pay rate changes occur in the middle of a pay period. It uses data that you specify on the Pay Group component in conjunction with compensation data to calculate proration.

See Understanding Proration Rules.

Exceptions to Frequency Table Use

Some processes, such as deduction calculations and Canadian tax calculations, use the pay periods per year from the Pay Calendar Table page (PAY_CALENDAR_TABLE). The value in the Pay Periods Per Year field on the Pay Calendar Table page is derived from the pay frequency of the pay group.

See Also

Creating Pay Calendars and FLSA Calendars

Setting Up Pay Groups

Defining a Frequency ID and Country-Specific Defaults

To define a frequency ID and country-specific defaults, use the Frequency Table component (FREQUENCY_TBL) and the Default Frequencies by Country component (DFLT_FREQUENCY).

This section discusses how to:

• Define a frequency ID, type, and annualization factor.

• Set country-specific frequency defaults.

Pages Used to Define a Frequency ID and Country-Specific Defaults

Defining a Frequency ID, Type, and Annualization Factor.

Access the Frequency Table page (Set Up HRMS, Foundation Tables, Compensation Rules, Frequency Table, Frequency Table).

Maintenance Responsibility	Select a maintenance responsibility. Values are: C (customer): You define the frequency ID. You are responsible for keeping this frequency code up to date. P (PeopleSoft): PeopleSoft delivers the frequency in the system and is responsible for keeping it up to date. The other fields on this page become unavailable.
Frequency Type	Select a frequency type. Values are: Annual Biweekly Contract Daily Every Four Week Hourly The Use Standard Hours for Annualization check box becomes available. Monthly Quarterly Semimonthly Weekly
Use Standard Hours for Annualization	Select to have the system use job standard hours for annualization instead of the frequency annualization factor. The frequency annualization factor is set to 0, and that field becomes unavailable. Note. You can use only hourly frequencies that use standard hours for annualization for compensation and pay frequency in PeopleSoft Human Resources, PeopleSoft Payroll for North America, and PeopleSoft Global Payroll.
Frequency Annualization Factor	Defines how many frequency periods occur in one year. Examples: A standard daily compensation frequency is 260 because there are 260 workdays in a standard year. You can define a frequency called W53 with a W (weekly) frequency type and an annualization factor of 53. Important! If you change the effective status, frequency type, or annualization factor of an existing frequency, you receive a warning message saying that previous calculations using this frequency aren't synchronous with the new values of the frequency.

Setting Country-Specific Frequency Defaults

Access the Default Frequencies by Country page (Set Up HRMS, Foundation Tables, Compensation Rules, Default Frequencies By Country, Default Frequencies by Country ).

Select four frequencies to set as defaults for the specified country. The system uses these default frequencies to calculate pay rates in the Pay Rates group box on the Job Data - Compensation page. The order you list the frequencies on this page is the order in which the pay rates appear in the Pay Rates group box.

For example, you specify the 1st Frequency as annual, 2nd Frequency as monthly, 3rd Frequency as daily, and 4th Frequency as hourly for Canada. For an employee in Canada, the Pay Rates group box displays the following pay rates in this order: annual, monthly, daily, and hourly. The system converts compensation rates to the default frequencies using the standard formulas described earlier in this chapter.

See Also

Job Data Pay Rate Frequencies