Understanding Allowance Calculation

This section discusses how Global Payroll for France determines eligibility for allowances and calculates the allowance values for:

  • Compensation in lieu of paid holidays not taken (ICCP).

  • Severance allowance.

  • End of fixed-term contract allowance.

  • Retirement allowance.

  • Transportation allowances.

  • Independent transportation allowance.

  • Benefits in kind.

  • Meal allowances.

  • Meal tickets.

When a contract is terminated and the payee has not taken his or her vacation entitlement, he or she is entitled to payment in lieu of the holiday entitlement. In the case of termination because of gross misconduct (faute lourde), compensation in lieu of paid holidays is not paid for vacation acquired during the current period.

Earning

Description

CP ICCP A2, CP ICCP A1, and CP ICCP A

Triggered by a termination, irrespective of the Action/Reason code. These earnings calculate compensation in lieu of paid holiday up to three years in the past.

CP ICCP 1A

Calculates compensation for the current vacation year. This earning is dependent on the Action/Reason for the termination. The bracket IND BR FIN CONT assigns a value to the variable IND VR DR ICCP that determines whether the earning is processed. You must update the bracket to indicate the Action/Reason codes that trigger this earning.

Here is an example of how the allowance is calculated.

If a company's vacation year begins on June 1 and ends on May 31 of the following year and a payee leaves the company on October 2, 2010, the compensation in lieu of paid holiday earnings are calculated as follows:

  • CP ICCP A2 retrieves the allowance for vacation not taken during the vacation year June 1, 2007 through May 31, 2008.

  • CP ICCP A1 retrieves the allowance for vacation not taken during the vacation year June 1, 2008 through May 31, 2009.

  • CP ICCP A retrieves the allowance for the vacation year June 1, 2009 through May 31, 2010.

  • CP ICCP 1A retrieves the allowance for vacation granted (but not taken) between June 1, 2010 and October 2, 2010 (if the bracket retrieves a value for the variable IND VR DT ICCP equal to 1 for the departure reason).

The amount of compensation in lieu of paid holidays (days not taken) is calculated as follows:

  1. The balance for the period is calculated using the 1/10th rule.

  2. The balance for the period is calculated using the salary uphold rule.

  3. The more favorable of the two balances is used.

Note: This allowance is paid with the final paycheck. It is liable to social contributions and is taxable.

Severance allowance is activated at the time of final pay. There is a statutory minimum severance allowance, but many companies have agreements that pay more than this amount.

Earning

Description

IND LICENC

This earning calculates the statutory severance allowance. The salary base for the allowance is the gross salary average of the last three months or the gross salary average of the last 12 months, whichever is greatest.

IND LICENC 2

This earning is provided as sample data. You can use it if you have a severance allowance defined by the collective agreement with rules that differ from the statutory ones. If you decide to use it, you must determine when you want it to be triggered and adapt the calculation to meet your needs.

Note: To qualify for this allowance, the payee should be laid off (except for reasons of gross misconduct) and should have had at least two years of uninterrupted service with the same employer. Fixed-term contractors, apprenticeship contractors, and other payees with some specific contracts are not eligible for the severance allowance.

These brackets are used to calculate this allowance:

  • IND BR DT SPEC.

    This bracket controls, based on contract type, entitlement to the different allowances that can be paid when a termination occurs.

  • IND BR FIN CONT.

    This bracket controls, by action/reason value, entitlement to the different allowances that can be paid when a termination occurs.

  • IND BR IND LIC.

    This bracket can be used to define the values used to calculate the severance allowance. By default, this bracket returns the values defined by law (that is, payment of 1/10th the monthly salary per year of seniority up to ten years, and payment of 1/15the the monthly salary per year of seniority after ten years of employment). You can modify these values as needed.

PeopleSoft delivers the earning IND FIN CONT to calculate the end of fixed-term contract allowance.

As defined by PeopleSoft, this earning is calculated when:

  • A payee is terminated with an action of TER (termination) and a reason of EAB (employer's anticipated breach) or EFT (end of fixed-term contract).

    This entitlement is set up in the bracket IND BR FIN CONT by specifying the values of the action and reason variables (GEN VR ACTION and GEN VR MOTIF) that entitle a payee to the allowance. In this bracket, the return column variable IND VR DT IFC returns a 1 or a 0: a 1 if the allowance can be paid, and a 0 if the allowance cannot be paid.

  • The payee has a contract type of CDD.

    This entitlement is set up in the bracket IND BR DT SPEC by specifying the value of the contract type system element (CONTRACT TYPE) that entitles a payee to the allowance. In this bracket, the return column variable IND VR DP IFC returns a 1 or a 0: a 1 if the allowance can be paid, and a 0 if the allowance cannot be paid.

To modify this allowance, or to calculate the allowance when other action/reason values are entered in the Job Data component and for other contract types, you must specify the valid action/reasons and contract types in the brackets IND BR FIN CONT and IND BR DT SPEC.

See IND BR FIN CONT (End of Contract Entitlements), IND BR DT SPEC (Contract Type Specific Entitlements).

The entitlement for retirement allowance varies depending on whether the retirement is voluntary or imposed by the employer. The payments are triggered with a generation control when the contract end date is included in the pay period. Enter the contract end date in the Contract Data page in PeopleSoft HR.

Earning

Description

IND DEP RET

This earning is used to calculate voluntary retirement allowances.

IND MISE RET

This earning is used to calculate statutory retirement allowances.

Eligibility for this allowance depends on contract type and the reason for termination. The calculation of the allowance amount is dependent on the employee's labor agreement and category.

The following brackets are used to calculate the retirement allowance:

  • IND BR DT SPEC.

  • IND BR FIN CONT.

  • IND BR DEP RET.

Note: The bracket IND BR DEP RET retrieves the rule for calculating the voluntary retirement allowance IND DEP RET. The statutory retirement allowance, IND MISE RET, uses the same calculation rules and formulas as the severance allowance. It does not use the bracket IND BR DEP RET.

Payees living or working in Paris and the area around Paris (Région Parisienne) are entitled to special transportation allowances based on the number of zones they have to travel through on the way to work. There is no legal transportation allowance for people living and working outside the Paris area.

The transportation allowance for payees living and working in or around Paris is paid at 50 percent of the cost of a weekly, monthly, or annual travel ticket. Payees living outside Paris, but working within it, or living inside and working outside, are entitled to a reduced allowance, as are people living and working outside the city but travelling across it to get to work.

The amount is contained in an earning, CARTE ORANGE, and is triggered by earning or deduction assignment or by positive input. The calculation rule for this earning is Unit x Rate x Percent.

The number of tickets to reimburse is the unit and is entered at the payee level (you must override the unit with the number of tickets that you want to pay back).

The calculation of the allowance also requires information stored in three variables. You must define the values of these variables using supporting element overrides.

Variable

Description

How it is Used

IND VR CO NZ

Area number of the Carte Orange (allowance code)

Enter the area number in this variable using a supporting element override. If you do not enter this value as an override or enter the wrong value, the payment will be in error. The valid area values are contained in the bracket IND BR C ORANGE.

IND VR CO FA

Frequency of ticket purchase

IND VR CO FA is used to store the frequency of purchase of the transportation card. The possible values here are: S for a weekly transportation ticket and A for a yearly transportation ticket. If this variable is not populated, the system assumes, by default, that the purchase frequency is monthly. This variable is used to select the correct reimbursement amount. The bracket IND BR C ORANGE retrieves the amount (cost) of the weekly, monthly, and yearly transportation ticket.

Note: The ticket cost depends on the frequency stored in IND VR CO FA and is returned by the bracket IND BR C ORANGE (the cost populates the rate component in the calculation rule of the earning CARTE ORANGE).

IND VR CO%

Reimbursement percentage (default rate)

The variable IND VR CO% stores the percentage used in the calculation rule of the earning CARTE ORANGE. By default, this percentage is equal to 50 percent. However, you can override this percentage by entering a supporting element override.

Note: You can enter supporting element overrides on the Element Detail page of the Element Assignment by Payee component (GP_ED_PYE), or on the Element Detail page of the Payee Assignment by Element component (GP_ED_ELEM). You can also enter supporting element overrides on the Positive Input - Details page of the One Time (Positive Input) component (GP_PI_MNL_ERNDED).

Payees who do not use public transportation may be entitled to these allowances:

  • Transportation allowance.

    There is no legal obligation for payees living and working outside Paris to receive a transportation allowance. Special rules may be defined by collective agreements.

    This allowance is managed using payee assignments and is calculated by the earning IND TRANSPOR. To trigger this earning, you must assign it to individual payees using the Element Assignment by Payee (GP_ED_PYE) or Payee Assignment by Element (GP_ED_ELEM) components, or the One Time (Positive Input) component (GP_PI_MNL_ERNDED).

    The amount that you want to reimburse must be entered in the amount field of the override if the amount is different from the statutory allowance.

  • Mileage allowance.

    The mileage allowance is stored in the earning IND KILOMETR. The calculation rule for this earning is rate x unit, where the unit is the number of kilometers traveled and the rate is the reimbursement rate.

    The payment of the allowance is triggered by positive input and the user must override the unit and rate fields with the amounts needed.

 Premium Reimbursement

Exemption from social security contributions Paris area

Exemption from social security contributions Provinces

Exemption from the income tax (*) and the tax on salaries Paris area

Exemption from the income tax (*) and the tax on salaries Provinces

Payment of the statutory independent transport allowance

Yes

Yes

Yes

Yes

50% reimbursement of the transportation ticket (Paris area)

Yes

Yes

More than 50% (general case)

Yes, if the company can supply proof of the expenses.

Yes, up to a limit of 50% of the transportation ticket.

Payee applying a fixed deduction for professional expenses

Yes, up to a limit of 50% of the transportation ticket.

Yes, up to a limit of 50% of the transportation ticket.

Total or partial financial liability for transportation expenses (provinces)

 

Yes, up to the 2nd class rate (SNCF or other transportation companies).

Yes, up to the limit of the statutory independent transport allowance.

Yes, up to the limit of the statutory independent transport allowance.

Payee applying a fixed deduction for professional expenses

 

Yes, up to the limit of the statutory independent transport allowance.

Yes, up to the limit of the statutory independent transport allowance.

Yes, up to the limit of the statutory independent transport allowance.

(*) Except if for real professional expenses deduction.

Note: Global Payroll for France manages only the Paris Carte Orange reimbursement and the reimbursement of independent transport allowance. PeopleSoft do not provide any logic to differentiate between other transportation premiums and reimbursement amounts that are liable or not liable for social security contributions and income tax. You must define the rules yourself.

Benefits in kind are goods or services provided by the employer that are not essential for carrying out professional activities.

Each benefit in kind produces an earning included in the gross salary and liable for social security contributions, and a deduction of the same amount, on the net salary. This section discusses:

  • Meal benefit in kind.

  • Lodging benefit in kind.

  • Meal and lodging benefits in kind and net guarantee calculation.

  • Car benefit in kind.

  • Other benefits in kind.

Meal Benefit In Kind

Element

Description

AN NOURRITUR

This earning calculates the meal benefit and is triggered by positive input. The calculation rule for the earning is rate x unit (number of meals), with the unit being entered as positive input. The rate is equal to a lump sum amount stored in the variable IND VR AN NOUR FOR.

AN NOUR REG

Note: This element is no longer used due to changes in the calculation of the meal benefit after 1 January 2003.

AN NOUR DED

This deduction reduces the net salary. It is equal to the benefit in kind, AN NOURRITUR, plus the adjustment AN NOUR REG calculated during the period. AN NOUR DED is calculated automatically by the payroll process.

Note: Apprentices are calculated using a specific formula.

Lodging Benefit In Kind

Lodging benefit in kind is calculated on the same fixed base as the meal benefit in kind, with two rates, depending on the monthly salary.

Element

Description

AN LOGEMENT

This earning calculates the lodging benefit and is triggered by positive input.

To process the earning, you must specify the number of rooms by entering a supporting element override for the variable IND VR AN L NP.

The calculation of the benefit in kind is based on statutory values stored in the bracket IND BR AN LOGEMENT, and depends on the number of rooms in the accommodation and on the employee salary as compared to the monthly social security ceiling.

AN LOGEM REG

Note: This element is no longer used due to changes in the calculation of the lodging benefit after 1 January 2003.

AN LOGE DED

This deduction reduces the net salary. It is equal to the benefit in kind, AN LOGEMENT, plus the adjustment AN LOGEM REG calculated during the period. AN LOGE DED is calculated automatically by the payroll process.

Note: Apprentices are calculated using a specific formula.

Lodging Benefit in Kind and the Net Guarantee Calculation

The lodging benefit in kind values vary depending on the gross salary, which is affected by the net guarantee process. At each iteration of this process, the gross salary is adjusted until the target net salary is reached. Because the gross salary can go above and below the social security ceiling after each iteration, the benefit in kind could also vary. This can cause instability in the net guarantee calculation. To avoid this, the lodging benefit in kind valuation is not included in the net guarantee iterative process.

Note: The lodging benefit is calculated in the process list after the IJSS section and before the net guarantee calculation section. This means that it is calculated without taking into account the IJSS adjustment value (the result of the Net Guarantee calculation). If you want to calculate the benefit in kind taking into account the net guarantee calculation, place the benefit in kind section IND SE AVT NATURE after the net guarantee sections GEN SE GARANTI NET and GEN SE IJSS AJUST. But in this case, the net guarantee calculation can't be guaranteed.

Note: PeopleSoft recommends that you do not include the benefit in kind calculation in the net guarantee iterative process.

Car Benefit in Kind

The real value of a car given to a payee is considered a benefit in kind. If a car belongs to the company, but is allocated to a payee, it is also considered a benefit in kind, calculated with the mileage allowances bracket. This bracket is provided by the tax office and is not managed by PeopleSoft.

Element

Description

AN VEHICULE

This earning has a calculation rule of Amount, with the Amount Type set to Payee Level. It stores the car benefit and is triggered by positive input.

AN VEHIC REG

This earning is used to supplement the car benefit in kind using the One Time (Positive Input) page.

AN VEHI DED

This is the deduction used for the car benefit in kind. It is deducted from net salary and is calculated automatically by the payroll process.

Other Benefits in Kind

Non-professional travel, company-sponsored lotteries, competitions, and other similar benefits are considered benefits in kind.

Element

Description

AN AUTRES

This earning has a calculation rule of Amount, with the Amount Type set to Payee Level. It stores other benefits in kind and is triggered by positive input.

AN VEHIC REG

This earning is used to supplement other benefits in kind using the One Time (Positive Input) page.

AN AUTRES DE

This is the deduction used for other benefits in kind. It is deducted from net salary and is calculated automatically by the payroll process.

There are two meal allowances, one for day workers and one for night workers. Because meal allowances may or may not be subject to contributions, PeopleSoft has defined four earnings.

Earning

Description

PANIER J I

This daytime allowance is subject to contributions.

To trigger the day meal allowance, you must enter positive input for the earning PANIER J I. The unit of positive input is equal to the number of meal allowances to be paid.

Meal allowances are not subject to contributions if they are calculated using the legal meal allowance rate stored in the variable IND VR PR PANIER. If you want to pay meal allowances based on a value greater than the legal rate, you must specify the value to use by entering a supporting element override for the variable IND VR PANIER J. If the variable IND VR PANIER J is overridden by an amount over the legal rate, the portion over this rate is used as the rate for the earning PANIER J I.

Note: You can enter supporting element overrides on the Positive Input - Details page of the One Time (Positive Input) component (GP_PI_MNL_ERNDED).

PANIER J NI

This daytime allowance is not subject to contributions.

The earning PANIER J NI has as its unit the number of meals entered by positive input for the earning PANIER J I, and the rate is the statutory meal allowance rate stored in the variable IND VR PR PANIER.

PANIER N I

This night allowance is subject to contributions.

To trigger night meal allowances, you must enter positive input for the earning PANIER N I. The unit of positive input is equal to the number of meal allowances to be paid.

Meal allowances are not subject to contributions if they are calculated using the legal meal allowance rate stored in the variable IND VR PR PANIER. If you want to pay meal allowances based on a value greater than the legal rate, you must specify the value to use by entering a supporting element override for the variable IND VR PANIER N. If the variable IND VR PANIER N is overridden by an amount over the legal rate, the portion over this rate is used as the rate for the earning PANIER N NI.

Note: You can enter supporting element overrides on the Positive Input - Details page of the One Time (Positive Input) component (GP_PI_MNL_ERNDED).

PANIER N NI

This night allowance is not subject to contributions.

If the variable IND VR PANIER N is not overridden or the variable is overridden by an amount less than 1.5 times the legal rate, the night allowances is not be liable to contributions and is paid by the earning PANIER N NI.

Note: For the meal allowances, you must enter a positive input for the earnings that are subject to contributions (PANIER J I and PANIER N I), but the process determines if these allowances are subject to contributions depending on the values of the variables IND VR PANIER J and IND VR PANIER N.

Here are two examples of how the PANIER J I and PANIER J NI earnings are calculated:

  • Example 1:

    • Legal Meal Allowance Rate= 2,85.

    • Positive Input for the earning PANIER J I.

    • Unit = 2,25.

    • Supporting element override for the variable IND VR PANIER J = 4,50.

    • In this case, the earning PANIER J I is equal to 2,25 x (4,50 − 2,85) = 3,71.

    • And the earning PANIER J NI is equal to 2,25 x 2,85 = 6,41.

  • Example 2:

    • Positive Input for the earning PANIER J I:

    • Unit = 2,25.

    • No supporting element override for the variable IND VR PANIER J.

    • In this case, the earning PANIER J I is equal to 0.

    • And the earning PANIER J NI is equal to 2,25 x 2,85 = 6,41.

Note: If the variable IND VR PANIER J is overridden by an amount under the value of the legal rate, the allowance paid is calculated by PANIER J NI and the base is equal to the legal rate (not to the amount defined for the variable IND VR PANIER J).

Earning or Deduction

Description

TR EMP NI

This earning calculates the number of meal tickets not liable to contributions.

TR EMP NI uses the bracket IND BR TIT REST to retrieve the amount of the employer's contribution to the meal ticket (stored in the return column variable IND BR TIT REST) that is not subject to social contributions. To process this earning, you must enter the number of meal tickets given to the payee using positive input.

Because this earning calculates the number of meal tickets not liable to contributions, it is not included in the salary nor does it appear on the payslip as the monetary counterpart of the earning.

TR EMP I

This earning calculates the part of the meal tickets liable to contributions.

TR EMP I uses the bracket IND BR TIT REST to retrieve the amount of the employer's contribution to the meal ticket that is subject to social contributions. This amount is stored in the return column variable IND VR TR EMP I.

The Unit in the calculation rule of this earning is the number of meal tickets entered by positive input for the earning TR EMP NI. If the employer does not have to pay a contribution for the meal tickets given, the bracket IND BR TIT REST returns a 0 as the value of the variable IND VR TR EMP I.

TR EMP I DED

This deduction calculates the number of meal tickets liable to contribution. These meal tickets add to the gross salary; to offset this increase, you must subtract the monetary amount of the meal ticket from the net salary to avoid doubling the payment.

This deduction uses the bracket IND BR TIT REST to retrieve the amount of the employer's contribution (stored in the return column variable IND VR TR EMP I) that is subject to social contributions and deducts it from the net salary. The unit of this deduction is the amount entered as positive input for the earning TR EMP NI.

TR SAL DED

This deduction retrieves the portion of the meal tickets that is paid directly by the payee. This deduction uses the bracket IND BR TIT REST to retrieve the payee's contribution to the meal ticket (stored in the return column variable IND VR TR SAL NI) and deducts it from the net salary. The unit of this deduction is the amount entered as positive input for the earning TR EMP NI.