Calculating Extra Periods

The base for calculating extra periods is defined in the labor agreement. For each extra period, you define:

  • The payment period and contribution timeframe.

    The payment period is the month when the extra period payment is paid to the employees. The contribution timeframe is the period over which an amount is withheld. The contribution timeframe is defined with the Period From and Duration fields on the Extra Period Definition page. Prorated extra periods are automatically paid monthly throughout the year.

  • Earnings that are included in the extra period calculation, and the percentage of each earning.

    Not all earnings contribute towards the extra period—only those on the Extra Period Eligible Earning page are included in the selected extra period. You can define extra period payments that are based on different earnings. For example, you might have two extra periods, one based on the employee's base salary and a second period based on the base salary plus the transportation earning.

  • Whether the payment is prorated or paid as a single payment.

    Prorated extra periods are always based on the compensation for the processing period. Extra period payments that are not prorated are calculated in one of two ways:

    • Based on the employee's compensation during the payment period.

      For example, if you define the extra period as January to June and the payment period is June, the system uses the employee's monthly compensation for June to calculate the extra period amount.

    • Based on the employee's compensation for each month of the contribution timeframe.

      For example, if you define the extra period as January to June, the system uses the employee's monthly compensation for the months January to June to calculate the extra period amount.

  • For employees whose salary is adjusted to gross or net, you need to define an overall extra period percentage.

    This percentage is needed to get the target monthly salary from an annual amount. The annual amount is paid over 12 months plus the extra periods. You need to know whether one extra period is equal to a regular payroll or just a part of it. If a labor agreement defines two extra periods, one defined at 100 percent and another defined at 50 percent, the factor used to find the monthly salary is 1/12 + 1.0 + 0.5.

See Gross and Net Guarantee Overview.

Absence Processing

When the extra period is calculated, the system checks an employee's absence history and reduces the extra period payment for certain types of absences taken during the contribution time frame.

Two ways are available for managing the effect of absences in an extra period payment, depending on the calculation method selected in the Calculation Options group box on the Extra Period Definition page.

  • If you select Proration Lump Sum, the extra period payment is calculated during the regular payroll process but the withheld amount takes into account the unpaid days.

  • If you select Payment Period Compensation, the system stores in an accumulator the absence days that should be subtracted from the extra period payment (AUS AC D N PG XTRA).

    When processing the extra period, the process determines the daily rate within the extra period timeframe for each earning and multiplies it by the extra period timeframe days minus the unpaid days.

The system checks the Take Config1 field in the absence take definition to determine whether the absence affects the extra period payment.

In the case of advanced extra periods (those extra periods with payment dates that are prior to the time frame end date), you can have absences that occur after the extra period has been paid. Those absence days need to be deducted at some point. PeopleSoft Global Payroll for Spain provides a variable, CLI VR PRC DTO XTR (extra period deduction process option), to accomplish this. This means that those absences that occurred between an extra period payment period and the extra period time frame end date will be deducted in the next extra period process. Values for the CLI VR PRC DTO XTR are PXTRA (default value—deduct from the next extra period process) and MENSUAL (deduct from the current regular period).

See Defining User-Defined (TAKE CONFIG) Fields.

Example of a Calculation for Prorated Extra Periods

The labor agreement can specify that one of the extra period payments be prorated over the 12 regular payments during the year.

Note: Only one extra period payment can be prorated over the course of the year. If your requirements define more than one prorated extra period, you can use the Percent if Salary Adjustment and Earning Percent fields to set that up.

Assume that the labor agreement specifies three extra period payments a year: a flat amount to be paid in June and December and a prorated amount to be paid in 12 regular payments (monthly). The extra period payments are 1200 EUR each.

The prorated amount is calculated in the following way:

1200/12 = 100 EUR per month

In the case of the prorated amount, an element called Prorated Extra Periods appears in the monthly payslips with a value equal to 100 EUR. This amount is accumulated over the gross and the taxable base but not over the social security base because the value of extra periods is considered in the social security base through the extra period proration.

Prorated extra periods are calculated by summing all eligible earnings and dividing by the duration (the extra period time frame), in days, to obtain a daily rate. For daily employees the duration is 365 or 366 days, and for monthly employees it is 360. This daily rate is then multiplied by the working days in the month. A prorated extra period is paid as a unique earning.

Partial Payments for Extra Period Earnings

When employees join a company in the middle of an extra period time frame, they are paid for only the portion of the time frame that they work. The system calculates the partial payment for the extra period earnings using a formula (XTR FM PXTR DVNGDA). The formula calculates a factor by dividing the number of worked days (during the extra period time frame) by the total number of days in the extra period time frame.

The calculation of the factor depends on an employee's social security contribution group type. Depending on whether his contribution group type is calculated daily or monthly, the calculation varies. Here are some formulas:

  • Daily contribution groups:

    The time frame is in calendar days. For example, for the time frame from January to June, the calculation is the sum of all the calendar days in the months from January to June:

    (31 + 28 + 31 + 30 + 31 + 30) divided by 181.

    In this example, the factor is 181/181 = 1

    Now assume that an employee is hired on January 15, rather than January 1. The time frame is:

    (17 + 28 + 31 + 30 + 31 + 30) divided by the total number of days from January 1 to June 30, which is (167/181).

    In this example, the factor is 167/181 = .9226.

  • Monthly contribution groups:

    Assume that you have an employee who is on a monthly payroll and his hire date is January 15. In this case, the days that must be considered month by month are 30, and you must calculate the proration for that month (January) in which the employee has not worked fully. So the calculation is:

    (16 + 30 + 30 + 30 + 30 + 30) divided by (30 × 6)

    In this example, the factor is 166/180 = .9222.