Understanding Administer Salary Packaging

This chapter provides an overview of Administer Salary Packaging and discusses:

Click to jump to parent topicDesigning Your Salary Packaging Program

The Administer Salary Packaging business process in Human Resources offers salary packaging functionality for Australia.

The core of Administer Salary Packaging includes six main phases of operation:

Click to jump to parent topicSetting Up Support Tables and Salary Packages

When implementing Administer Salary Packaging, you set up the following tables. These tables are the building blocks for your salary packages.

Table

Definition

Pay Calendar Table (GP) or Pay Calendar Table (HR)

Create and schedule payroll cycles for your salary packaged employees in specific pay groups.

Earning Elements (GP)

Define different earning elements you use to pay your salary packaged employees through Global Payroll. Used for expense tracking.

Deduction Elements (GP)

Set up the way the system processes deductions, including the priority of the deduction and how the deduction affects taxes. Used for expense tracking.

Comp Rate Code Table - Comp Rate Code Table (HR)

(compensation rate code table)

Select the Maintained via Package Only check box in the Australian Salary Packaging group box to define and review your compensation rate codes. Rate codes are attached to salary package components and are enrolled on the employee's Job Data - Compensation page. If the rate code is managed by salary packaging, the rate matrix functionality cannot be used.

Ern/Ded Included (GP)

(included earnings/deductions)

Select the nonpackaged earnings and deductions elements that appear on the Package Summary component after you run the expense calculation process.

Business Expenses (GP)

Enter actuals for salary packaging components defined as an expense payroll type. You must have a unique expense code for each package component to facilitate reconciliation of package expenditure.

Position Data - Description page and Job Code Table - Job Code Profile

Attach the default package rule and template that you use when modelling your packages to a job code or a position. The defaults on the position override the defaults on the job code.

Company Table — Default Settings

To specify a default compensation rate code for TPV and TEC for a specific company to use when modelling applicant/employee packages, use the Company Table - Default Settings page.

Pay Groups AUS

When you are defining calendars for salary packaged employees, the pay frequency comes from the value you enter in the Pay Frequency field in the Salary Packaging group box.

This group box enables you set up default pay frequencies for the pay groups you use as part of Salary Packaging. The frequency you select is also retrieved by the Package Calendar Table page, which enables the budgeting capabilities in the actual salary package because the system needs to know over what type of frequency to divide the component totals.

FBT/GST Rate Table

View the FBT and GST rates for Australia. The GST percentage and rate for the calculation of Fringe Benefits Tax (FBT) appear.

FBT Stat Interest

View FBT statutory interest rates. The statutory percentage rate used in the calculation of interest payments for depreciation of motor vehicles and low interest loans appear.

FBT Vehicle Rates

Review FBT motor vehicle statutory percentage information. The kilometer thresholds and the corresponding statutory percentages used in determining the taxable value of a motor vehicle appear.

PAYG State Payroll Tax

Specify the payroll tax percent rate for all states where employees in a specific company are located. This page provides maintenance functions for the State Payroll Tax tables. These percentages are used in the notional calculation of tax during package modelling.

Tax Scales

Maintain tax scales used in package calculations. Set up and view the thresholds and the percentage of tax for each threshold. Use if you have Human Resources only installed.

Additional Components

Define the liabilities associated with each of your salary packaging components. Determine the level of package remuneration in which to include these liabilities—Total Package Value (TPV) or Total Employment Cost (TEC).

Package Components — Base Component

Set up basic information about the salary package component.

Package Components — Additional Component

Associate additional components with a salary package component.

Package Components — Calculated Component

Define contributing components. To assist in the accurate calculation of components dependent on the value of other components, define the calculation starting point and the other components that affect the value on the Expense Data page.

Expense Data

If you are planning on tracking expenditure (the package expense calculation) and you have Global Payroll installed, specify package component expenses information for each component. Enter the details and identify the payroll types and related data to track expenditures against package components.

Package Template

Define salary package templates. Define a standard collection of package components that are automatically defaulted into package model records for employees or applicants.

Package Rule

Create salary package rules. PeopleSoft applies package rules to validate the package models when you save them.

Pay Groups AUS

When you are defining calendars for salary packaged employees, the pay frequency comes from the value you enter in the Pay Frequency field in the Salary Packaging group box.

This group box enables you set up default pay frequencies for the pay groups you use as part of Salary Packaging. The frequency you select is also retrieved by the Package Calendar Table page, which enables the budgeting capabilities in the actual salary package because the system needs to know over what type of frequency to divide the component totals.