Understanding Calculation Elements

Use a variable element to define and store a value such as a character, date, or number. For example, assume that on January 1, you have three formulas and two earning elements that use a monetary factor of 20 in their calculations, and that this factor is scheduled to change on April 1 to a factor of 25. Without a variable element, you would have to make five effective-dated changes. However, if you define this factor as a variable element, you can make just one effective-dated change to the variable itself. You can then use the new factor of 25 anywhere that the variable is used.

Variables are the only items that are used with arrays. When you create an array, you retrieve the values into variables.

Using the date element, you can calculate a date by starting with an existing date and adding to or subtracting from it to come up with a new date. For example, to determine the date of a payee's five years of service, start with the payee's hire date and add five years to it.

You can also parse parts of a date. For example, if you want only the year of a date to be returned, use a date element to parse out the years, months, or days of the date.

Use a duration element to calculate the period of time between two dates. A duration is the result of subtracting one date from another. You define duration in years, months, or days.

For example, to determine a payee's age, calculate the duration between the payee's birth date and the calendar period end date.

Use formulas to create your own unique elements. You can define sophisticated rules, mathematical formulas, and iterative calculations as formula elements.

For example, you can define a formula to calculate an employee's vacation entitlement, quarterly bonus pay, or contributions to a pension plan.

Use rounding rules to round other elements such as formulas, earnings, or deductions that resolve to a numerical value. A rounding rule resolves to 1, if rounding is successful, or 0, if rounding is not successful.

For example, let's say that you define a rounding rule that truncates resolved values to two decimal places. During a calculation, you get a resolved value of 2.833333. The rounding rule truncates the value to 2.83.

You can specify whether you want to round based on such factors as the number of digits or decimals, or you can round to an incremental value. You also select the type of rounding: Nearest, Round Up, Round Down, or Round Up if Greater Than or Equal To, Else Down.

Counts are a way to calculate and summarize something on a daily basis. For example, you might track the number of hours that a payee works using a count: the count provides a day-by-day check of the hours worked and keeps adding to the work hours for a defined period of time.

Once you define the calculation rules for a count, you can associate it with a proration rule. When segmentation occurs, the count elements used in the proration rule determine the numerator and denominator to use for prorating the amounts.

You can use a proration rule to prorate a value when segmentation occurs.

A proration rule defines a numerator and a denominator to apply to an amount during segmentation.

As an example, for a pay period of June 1–30, with one segment from June 1 to June 10, you define the numerator as the segment period (June 1 to June 10) and the denominator as the entire pay period (June 1 to June 30). The proration rule resolves to .333 (10/30).

Use earning elements to define all types of compensation for a payee, including salary, fees, bonuses, commissions, pensions, and retirement pay.

You can define the following four types of calculation rules for earning elements:

• Amount

• Base * Percent

• Unit * Rate

• Unit * Rate * Percent

For example, you can define an earning element as EARNINGS1 = Unit * Rate. The components of this element (Unit and Rate) take on the same attributes as the element itself. If you change the values of the element, the values of the components also change. Once you define an earning element, you can reuse its components so that you don't have to redefine components for every new element.

You use deduction elements to define different types of deductions for a payee. Deductions can be voluntary, such as those for retirement plans, or statutory, such as taxes and garnishments.

You can define the following four types of calculation rules for deduction elements:

• Amount

• Base * Percent

• Unit * Rate

• Unit * Rate * Percent

In addition to the rate, unit, base, and percent components, the system creates three other components for deductions:

• Amount not taken

• Payback amount

• Add to arrears

The system also creates an arrears balance accumulator to keep track of a payee's arrears. An arrears is a way to store deductions that the system cannot take from a current pay run because of insufficient net pay.

You use absence entitlement elements to track absences such as vacations or leaves of absence. There are two types of absence entitlements:

• Per frequency

  The entitlement amount is calculated regardless of whether there is an absence.

  As an example, say that payees receive 12 days of vacation per year and that this entitlement is accumulated at 10 hours per month. This entitlement is a fixed, predetermined amount that is calculated and updated monthly, regardless of whether it is used.

• Per absence

  The entitlement amount is calculated only if there is an absence.

You use an absence-take element to define the conditions that must be met for an absence to be paid. An absence take involves defining rules for minimum and maximum absence takes. You set up absence takes to accumulate in hours, days, or other units.

For example, if your organization gives payees 12 days of vacation each year, and a payee goes on vacation for five days, the absence take for the payee is five days.

Once you've defined your absence take rules on the Absence Take pages, you can track absences by entering them on the Absence Event Entry page.

You use accumulator elements to store and track balances. You can store an accumulator for a designated period of time. For example, you can store gross pay data for one year. The system creates some accumulators automatically (automatically generated accumulators), and you can create others manually (additional accumulators).

There are two types of accumulators:

• Payment accumulators, which accumulate values through gross-to-net calculations.

• Balance accumulators, which accumulate values over a period of time, such as a month or a year.

You can also define the level at which you want to track a balance. For example, you can track a balance by payee record number, payee ID, department, or organization. You set up the tracking levels that work best for your organization.

Use generation control elements to control whether an element is resolved in the payroll process. To define a generation control element, you must specify the criteria that have to be met before the element is processed, based on such factors as an employee's HR Status, the Processing Frequency, Segment Status, and so on.

For example, let's say that a payee is paid weekly and has a monthly medical deduction of 100 that is to be deducted only once a month. You define the Generation Control - Frequency parameters so that this deduction is taken out only on the first pay period of the month.