Basic Earnings

This topic discusses:

  • Basic earnings in Spain.

  • Processing considerations for basic earnings.

In PeopleSoft Global Payroll for Spain, earnings are classified in two ways: basic and nonbasic. Whether an earning is considered basic or nonbasic depends on its frequency and whether it's a fixed amount or a variable amount.

Basic earnings are:

  • Paid every month.

  • Included in the employee's annual income at the beginning of the year.

  • A fixed amount each period (fixed earnings).

Basic earnings include:

  • Base salary.

  • Seniority.

  • Prorated extra periods established by the labor agreement.

  • Complements, such as languages, degrees, mejora voluntaria, complemento absorbible, and public transportation.

Any other delivered earning is considered a nonbasic earning in PeopleSoft Global Payroll for Spain.

Note: The basic earnings discussed here are only the ones that PeopleSoft Global Payroll for Spain delivers as sample data. They are the most common basic earnings required in Spain.

You can also create your own earnings and modify the calculation rules to fit your company's needs. To create your own earnings, use the Earnings component (GP_EARNING).

Basic earnings have these processing considerations:

  • Net to gross and gross to net adjustments.

  • Seniority calculation.

  • Extra period calculation.

  • Termination.

Because of these processing considerations, all basic earnings have the following special characteristics:

Calculation Rule = Unit * Rate

All basic earnings must:

  • Be defined with the calculation rule of Unit * Rate, where Unit is the formula GEN FM UNIDADES and Rate is a rate code.

  • Be identified by the category BAS at the earning definition.

  • Have their own rate code.

  • Have the formula GEN FM RATE AN/DAN as a post process formula.

  • Have as generation control XTR GC MEN O PXTRA.

PeopleSoft Global Payroll for Spain calculates the earnings for all employees on a daily basis, regardless of the way they contribute to social security (daily or monthly). Therefore, the rate component is always a daily rate. For employees who contribute monthly, the Unit component is 30 days (when they work the whole month) for regular payments or the extra period time frame for an extra period. For employees who contribute daily, the unit component contains the number of days that the employee worked. The unit is the GEN FM UNIDADES formula.

The rate for basic earnings is always a rate code, which retrieves its values from the Job Data - Compensation page. Note that you can enter rate codes with whatever frequency you need. In the case of daily employees, normally you provide daily rates or annual rates. All rate codes are annualized or deannualized to days. So you can think of the unit as the actual number of days worked in a month and the rate as the theoretical amount that an employee is supposed to earn per day.

For employees who are paid based on real worked days and contribute to social security on a daily basis, if they work the entire month, the unit equals 30 for months with 30 days, 31 for months with 31 days, and 28 or 29 in February. The unit equals the number of days worked for employees who don't work the entire month.

For employees whose earnings are calculated monthly (whose social security contribution group is Monthly ) and who work the entire month, the unit equals 30 regardless of the number of days that month has. If an employee is sick 10 days, the unit equals 20.

See Understanding Job Data.

Generation Control = GEN GC MEN O PXTRA

The GEN GC MEN O PXTRA generation control determines whether an earning must be calculated at an extra period an extra period payroll is processed.