Understanding Segmentation Setup

Types of Segmentation

Global Payroll offers two types of segmentation:

• Period segmentation

  This type of segmentation occurs when data that changes in mid period, such as a compensation rate, requires all elements in the process list to be calculated repeatedly on either side of the change date. The system divides the pay period into two or more distinct segments and treats each segment as a complete and separate payroll calculation. It calculates each element in the process list for each segment, resulting in multiple gross-to-net processes, payslips, and Payee Process Stat records. The system calculates each element using components that were effective during the different time slices.

• Element segmentation

  This type of segmentation occurs when data that changes in midperiod requires the affected element (and perhaps a subset of other elements) to be calculated repeatedly on either side of the change date. (Each sub-period is called a slice.) The system segments only the elements that you select and it creates separate result rows only for the specified elements. In element segmentation, there is only one gross-to-net result set.

Selecting Elements to Segment

With period segmentation, the system segments all elements on the process list automatically. With element segmentation, you must specify which elements in the process list to slice. To do this, you add the elements to be segmented to an element list that you define using the Segmentation Event Definition page.

Example 1: Unsegmented Period

In an unsegmented period the number of periods equals the number of segments, which equals the number of slices. All three have identical begin and end dates.

Image: An unsegmented period

This diagram illustrates the relationship between period, segment, and slice begin and end dates in an unsegmented period.

Example 2: Segmented Period

Image: A segmented period

This diagram shows a period with two segments; segment 1 contains a sliced element.

Using Period Segmentation

When using period segmentation, all elements are resolved once in each segment.

Using Element Segmentation

When using element segmentation:

• Primary elements are resolved once in each slice if they are set up to be sliced.

• Supporting elements are resolved once in each slice if they are set up to be sliced.

  A supporting element is also resolved in each slice if it is a component of an element that's defined to be sliced. Suppose that an earning element E1 is sliced. If this element uses a duration element (a supporting element) that measures years of service, and the value of earning E1 is based on the years returned by the duration element, the duration element is resolved whenever E1 is resolved, because it's a component of E1.

Example of Period Segmentation

In period segmentation, all elements are calculated once for each segment and there are multiple gross-to-net result sets.

This table lists examples of elements, their calculation rules, and the associated period segmentation rules:

Assume that E1 represents base pay and that the value of E1 increases from 10,000 to 20,000 on September 16, triggering the segmentation of the September pay period into two equal parts. This scenario is represented in the following table:

In this example, all the elements on the process list are segmented and there are two separate gross-to-net calculations.

Example of Element Segmentation

When performing element segmentation, the system slices only those elements that are included in the Element List. The system produces only one gross-to-net result set and includes the sliced elements within a segment or period.

This table lists examples of elements, their calculation rules, and the associated element segmentation rules:

Assume that E1 represents base pay and that the value of E1 increases from 10,000 to 20,000 on September 16, triggering the slicing of element E1 into two equal parts. (The only element defined to be sliced is E1.) This scenario is represented in the following table:

E1 is sliced once on September 16, resulting in two separate calculations for E1 — one for each slice. There is only one gross-to-net process, and the Net Pay element represents the sum of E1 in each slice and E2 in each slice minus D1 (deduction 1).

Using Period Segmentation

With period segmentation, every element and supporting element is segmented—a situation cannot exist in which an element is segmented but the accumulator to which it belongs isn't segmented.

Using Element Segmentation

The slicing of a member of an accumulator does not cause slicing of the accumulator, but the slicing of an accumulator causes all member elements to be sliced.

Rules for slicing an accumulator that is used as a driver are covered in the topic that discusses multiple resolutions of earnings and deductions.

Matching and Mismatching Slices and Segments

During period segmentation, all elements are segmented equally, and parent and child elements always match.

During element segmentation, parent and child elements can be sliced equally, or one may be sliced more than the other. For example, the parent might be included in the list of elements to segment, while the child is not. If the parent and child slices are identical, the parent and child are said to match; if they are not identical, they are referred to as mismatching.

Global Payroll follows specific rules for processing matching and mismatched elements. These rules are illustrated in the following examples.

Examples 1–7: Parent Element Is a Primary Element or a Supporting Element

The following cases use these elements:

• Earning E1 = Percent of F1 (supporting element).

• Earning E3 = Percent of E2 (primary element).

• F1 = 100 (supporting element).

• E2 = 100 (primary element).

This table summarizes the examples that follow in this topic. The child and parent slices in these examples do not always match, as indicated in the Match/No Match column.

Case 1

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E3

Scenario: Parent is sliced; child is not sliced. Child is a primary element.

For E3 (parent), there are two slices:

• Slice 1: 10% of 100 (50)

• Slice 2: 10% of 100 (50)

For E2 (child), there is one slice with a value of 100.

Each slice of E3 uses the full value of the child (E2). This causes a warning message to be displayed in the Payee Messages component.

Case 2

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E2

Scenario: Parent is sliced; child is sliced. Child is a primary element.

For E3 (parent), there are two slices:

• Slice 1: 10% of 100 (50)

• Slice 2: 10% of 100 (50)

For E2 (child), there are two slices:

• Slice 1: 100 (50)

• Slice 2: 100 (50)

When the parent's slice dates equal the child's slice dates, the parent uses the child's value. Although the slice dates match, without proration on the child, the results may be incorrect.

Case 3

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E2

Scenario: Parent is sliced; child is sliced more. Slices partially match. Child is a primary element.

For E3 (parent), there are two slices:

• Slice 1: 10% of 100 (33.33)

• Slice 2: 10% of 200 (33.33 + 33.34)

For E2 (child), there are three slices:

• Slice 1: 100 (33.33)

• Slice 2: 100 (33.33)

• Slice 3: 100 (33.34)

Slice 1 of the parent and child match, so the system sums the child slices (slice 1, in this example). For the second slice of E3 (the parent), the system sums slice 2 and slice 3 of E2 (the child), because the begin date of slice 2 and end date of slice 3 match slice 2 of E3 (the parent). This scenario causes a warning message to be displayed in the Payee Messages component.

Case 4

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E2

Scenario: Parent is sliced; child is sliced less. Slices partially match. Child is a primary element.

For E3 (parent), there are three slices:

• Slice 1: 10% of 100 (33.33)

• Slice 2: 10% of 200 (66.67)

• Slice 3: 10% of 200 (66.67)

For E2 (child), there are two slices:

• Slice 1: 100 (33.33)

• Slice 2: 100 (66.67)

Generally, if the child is a primary element, it should be on the same list of elements to be sliced as the parent element. This ensures that both the child and parent have matching slices. Otherwise, the above scenario could occur and should be avoided.

The resolution is twofold. When there are exact matches (as in slice 1 of the parent and the child), the system uses the child's value. If the parent or the child has proration turned on, the result is correct. The second resolution of the parent sums all resolutions of the child (200, in this example), resulting in an over calculated amount. This is because the system cannot get a match on the slice dates for the parent and the child. Even with proration turned on, the amount of the child is overstated (see the amounts in parentheses).

Case 5

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E2

Parent is sliced. Child is sliced. No match on slice dates. Child is a primary element.

For E3 (parent), there are two slices:

• Slice 1: 10% of 300 (100)

• Slice 2: 10% of 300 (100)

For E2 (child), there are three slices:

• Slice 1: 300 (100)

• Slice 2: 300 (100)

• Slice 3: (100)

Generally, if the child is a primary element, it should be on the same list of elements to be sliced as the parent element. This ensures that both the child and parent have matching slices. Otherwise, the above scenario could occur and should be avoided.

When the parent's slice dates do not match any of the child's slice dates—as in the second resolution in Case 5 — the system sums the value of all child slices for each resolution of the parent. This causes a warning message to be displayed in the Payee Messages component.

Case 6

Assumptions:

E2 (primary element) = 100

E3 (primary element) = 10% of E2

Proration on E2

Parent is not sliced. Child is sliced. No match on slice dates. (Slice dates are not applicable to the parent.) Child is a primary element.

For E3 (parent), there is one slice with a value of 10% of 200 (100)

For E2 (child), there are two slices:

• Slice 1: 200 (100)

• Slice 2: 200 (100)

When the parent isn't sliced, and the child is—and the child is a primary element—the resolution of the parent element sums the values of all resolutions of the child. This causes a warning message to be displayed in the Payee Messages component.

Case 7

Assumptions:

E1 (primary element) = 10% of F1

F1 (supporting element) = 100

Proration on E1

Parent is sliced. Child is not sliced. Child is a supporting element.

For E1 (parent), there are two slices:

• Slice 1: 10% of 100 (50)

• Slice 2: 10% of 100 (50)

For F1 (child), there are two slices:

• Slice 1: 100

• Slice 2: 100

Slice 1 of E1 resolves the child for the slice 1 time period. F1 is sliced because, as a supporting element child, it resolves for each parent's slice.

System Generated Warning Messages

During the pay calculation, the system issues a warning message in the following situations if the child element is a primary element and its slice dates don't match the parent's slice dates:

• Parent is sliced. Child isn't sliced (see Case 1).

• Parent is sliced. Child is sliced. The slice dates of the parent don't match the slice dates of the child (see Cases 3, 4, and 5).

• Parent isn't sliced. Child is sliced (see Case 6).

If the child element is an accumulator, a warning message is issued whenever the accumulator's slice dates don't match the parent's slice dates.

Messages are displayed in the Payee Messages component.

Segmentation with Proration

To have the system prorate a segmented earning, deduction, or frequency-based entitlement element, specify proration as part of the element's definition.

You must define the proration rule to use in segmentation processing, because the rule is not hard-coded. Generally, a proration rule that you define consists of a numerator, representing the slice or segment, and a denominator, representing the entire pay period.

You can determine how to define the numerator and denominator that constitute the proration factor. The numerator and denominator can be any of these elements:

• Accumulator

• Count

• Duration

• Formula

• Variable

See Defining Proration Rules, Earnings - Rounding/Prorations Page.

Segmentation without Proration

To apply segmentation without proration, select the No Proration option on the Rounding/Proration page of the Earning/Deduction Definition component or the Absence Entitlement component.

This table provides an example of segmentation without proration:

Assume that E1 represents base pay and that E1 is sliced on September 16, halfway through the pay period. None of the interrelated elements are defined to be prorated. This scenario is represented in this table:

Because E1 is not defined to be prorated, the system incorrectly calculates the value of E1 in each slice (slices 1 and 2) as 20,000 (the true value in each slice should be 20,000 × ½). This leads to additional errors: When E2 is calculated, the system sums up E1 in each slice, to yield a value of 40,000 × 10% (the correct amount is 20,000 × 10%). Similarly, A1 resolves to 44,000 instead of 22,000. And E3, defined as A1 × 10%, resolves to 44,000 × 10%, yielding 4,400 (the correct result is 2,200).

It's important to understand why segmentation does not automatically result in proration. For example, if E2 is a percentage of E1 and both are sliced, E1, but not E2, is prorated.

Segmentation and Proration of Earning and Deduction Assignments

In Global Payroll you can define segmentation triggers only for effective dated records, with one exception: you can define segmentation triggers for the begin and end dated earning and deduction assignment record GP_PYE_OVRD. The purpose of this exception is to enable you to assign an earning or deduction to a payee on the Element Assignment by Payee (GP_ED_PYE) or Payee Assignment by Element (GP_ED_ELEM) components and have the system segment—and prorate— the element when the assignment begin date comes after the pay period begin date, and/or the assignment end date comes before the period end date. If you want the system to prorate the calculation results, you must specify proration as part of the element's definition.

See Understanding Triggers.