13th Month Payments
This section discusses:
Earnings codes.
Eligibility, pay out events, and calculation.
13th month payments can be configured yearly or half-yearly. In cases where there is a termination or mid-year hire, the system automatically prorates the earnings amount. The calculation is based on an accumulator. In addition, the system provides a monthly earnings code, which can be used to charge the arrears to your general ledger.
Here are the two new earnings codes:
|
Earnings |
Code |
Description |
|---|---|---|
|
13th month arrears |
1200A |
Used for general ledger |
|
13th month salary |
1200B |
Money to the employee |
The calculation of 13th month payment might be very specific for each branch and company within your organization. Therefore this feature is designed to be very flexible. It enables you to add your own logic in the customer exists that are provided. You can benefit from the framework and add your own logic without increasing the maintenance effort.
Eligibility
The system defines the eligibility to earn 13th month base pay per month in formula CH_ER_FOGCMTH. It is standard that all active employees are eligible for 13th month wages. To adjust eligibility, you can modify the custom exit formula CH_ER_CFOGCMTH.
Pay Out Events
The system defines the pay out event in formula CH_ER_FOGCPAY. It is standard for 13th month wages to be paid out in situations where there is a termination or in the December payroll. To adjust eligibility, you can modify the custom exit formula CH_ER_CFOGCPAY.
Calculation
The CH_ER_13B accumulator defines the earnings that contribute to the 13th month base pay. You can, however, add an employee's earnings to this accumulator. The 13th month wage amount is subject to social contributions and the source tax.