Understanding Festive Advance Payments

Global Payroll enables you to make the actual festive advance payments through the Global Payroll system. However, as festive advance payments are advances, they must be recovered through deductions in the payroll system in subsequent pay periods. Separate customary deductions corresponding to each of the festive advance types and supporting elements enable you to deduct festive advance amounts in subsequent pay periods. This enables you to recover the entire outstanding festive advance payments when an employee is terminated.

You specify the deduction elements to use for the recovery of the festive advances on the Festive Advance Pay Program page in HR. To ensure that you select appropriate deductions on this page, the system enables you to select only deductions with a category of FA (festive advance). All elements created use this category. Separate deductions are provided for recovering advances for each of the festive advance types, and they are all set up identically.

The following festive advance deductions enable you to recover festive advance payments (they add to the FAD AC FA BAL accumulator):

• CNY DD PB (Chinese New Year payback).

• DEEPA DD PB (Deepavali advance payback).

• XMAS DD PB (Christmas advance payback).

• HARI RAYA DD (Hari Raya advance payback).

The following supporting elements control the processing of festive advance recoveries (payback):

1. When an advance is paid, it is added to two accumulators:

   • FAD AC ADV AMT (advance amount accumulator).

     This accumulator holds the amount paid, and it is cleared when each advance is paid so that it contains only the value of the last paid advance.

   • FAD AC FA BAL (outstanding balance accumulator).

     This accumulator holds the outstanding balance, and it is reduced by the payback deductions.

2. The amount for the payback deductions is based on the first accumulator (the amount of the last paid advance).

   Although, in the delivered rules, it is 100 percent of that amount, you can use variable FAD VR RECVRY PCT to change this percentage to spread the repayments as required.

   Note: Accumulators are updated at the end of the process, so the payback deduction is calculated based on the accumulators from the previous pay, not including any newly paid advance.

3. The post-processing formula FAD FM ADV LIMIT is used with all of the deductions to limit the deduction amount to the outstanding balance (the second accumulator, FAD AC FA BAL).

   If an employee's termination date falls within the current period, the post-processing formula overrides the deduction amount with the entire outstanding balance so that the advance is always fully repaid on termination.

4. The formula FAD FM ADV PBCK determines whether an outstanding advance needs to be repaid (in accumulator FAD AC FA BAL).

   If so, the formula then determines whether the current deduction is the one specified in the employee's festive advance program for paying it back. The outstanding balance is also verified in the FAD GC ADV PBCK generation control to save calculating when there is no advance to repay. An error message is generated if the gross pay is less than the amount to be deducted.

5. The array FAD AR PBCK DEDN loans the deduction code that is assigned to the employee's festive advance program and holiday type to the variable FAD VR PBCK DEDN.