Frequency and Generation Control Calculations

When you set up an earning or deduction, you can specify a frequency on the Calculation page. There are two options:

  • Use Calendar Period Frequency indicates that the element frequency is determined by the calendar period.

  • Use Specified Frequency enables you to define the frequency.

For earning or deduction elements that use a frequency-controlled rate code, select Use Calendar Period Frequency. Otherwise, you may not get the result that you are looking for.

A rate code element that is frequency-controlled is resolved in the calendar frequency. It is annualized by the Frequency Option field that controls it and deannualized by the calendar frequency.

For example, say that you have a weekly payroll, and you create an earning element with an amount of 100 and a frequency of monthly. If no generation control conditions are defined, the system annualizes and deannualizes the amount into a processing frequency amount. Let's assume that your organization's monthly frequency is 12 and its weekly frequency is 52. First, the system annualizes the 100 (monthly amount) to 1200. Then it deannualizes that amount into the payroll processing frequency. If the payroll frequency is weekly, the amount that is paid each pay period is 1200 / 52 = 23.076923.

If your organization has multiple pay frequencies, the system converts the amount into the corresponding pay period amount for each frequency. Let's say that your organization gives an annual bonus of 1000 to all payees, and distributes the bonus in payslips throughout the year. Your hourly payees are paid weekly and your salaried payees are paid monthly. If you define a bonus earning as BON = 1000, with a frequency of Annual, that definition is applied, using annualization and deannualization, to all payees according to each group's pay frequency.

HR Frequency and Global Payroll Frequency Tables

Global Payroll usually uses the PeopleSoft HR Frequency Table to determine how a frequency is calculated. However, some frequencies that are not defined in that table are defined in the Generation Control Frequency Table in Global Payroll. An example of this is First of the Month. Let's say that you have a weekly pay frequency, but you want an earning element to be paid in the first pay period of the month. In Global Payroll, you can define a generation control frequency and assign it to the earning element through Generation Control.

Frequency Conversion and Generation Control

With generation control you can control when an element is processed, based on various criteria (one of which is frequency.)

If you select a frequency other than Use Calendar Period Frequency, the system annualizes and deannualizes the earning amount based on the pay period frequency. If a generation control frequency exists, the system annualizes and deannualizes the earning amount based on that frequency. The generation control frequency overrides the pay period frequency during frequency conversion.

For example, an earning element is defined with a calculation rule of Amount = 1200, an annual frequency, and a monthly pay period. If you define the monthly frequency as 12, and you don't have a generation control frequency for the earning, the amount is deannualized to 100 per month (1200 / 12 = 100). Now, if the generation control frequency is quarterly, the earning element is deannualized to 300 (1200 / 4 = 300).

This table lists the calculation rules and components for which frequency conversion is performed:

Calculation Rule Component

Amount

Amount

Base × Percent

Base

Unit × Rate

Unit

Unit × Rate × Percent

Unit

When you select Use Calendar Period Frequency in the Frequency Option field, the system does not perform frequency conversion.

For example, let's say that you have an earning element with a calculation rule of Amount and the amount is 100. If Frequency is set to Use Calendar Period Frequency, the amount calculated is always 100, regardless of what period frequency is used. If you have weekly and monthly pay groups, the resolved amount is 100 for payees in both groups. Even if a generation control condition uses frequency, the system doesn't perform annualization or deannualization. For frequency conversion, you specify the frequency in the earning's calculation rule. Frequency deannualization for generation control does not occur unless you specify a frequency on the earning element definition. Even though the system does not perform this routine, you can still use Generation Control - Frequency to control when the element is processed for the weekly pay group.

See Defining Generation Control Elements.

Example 1: Frequency Conversion without Generation Control

An earning element has a flat amount of 1200 and an annual frequency (factor = 1). You run a pay period with a monthly frequency (factor = 12).

The system retrieves the value of the frequency defined for the element (1) and the value of the frequency defined for the pay period (12) from the HR Frequency Table. It divides the element frequency factor by the period frequency factor to determine the annualization/deannualization factor. The equation used to calculate the element is: 1200 × 1/12 = 100

Example 2: Frequency Conversion with Generation Control

You have a monthly payroll and an earning element, a Christmas bonus, that should be paid only in December. The earning element is set up with a flat amount of 50 and a frequency of Weekly (factor = 52). To pay the bonus in December, you can:

  1. Create a generation control frequency called December and give it a frequency factor of 1.

  2. Create a generation control definition called Christmas.

  3. In the definition, add the December generation control frequency, and select Include on the Generation Control - Conditions: Frequency page.

  4. Add the generation control definition to the earning element.

  5. Attach the December generation control frequency to the December calendar.

When the system processes the December calendar for a payee and sees that the earning element has frequency generation control, it checks for a matching generation control frequency on the calendar. If it doesn't find a match, the system doesn't process the element. If the system finds a match, it performs the following calculation:

(Element amount (50)) × (element frequency factor (52)) / (generation control frequency factor (1)) = 2600.

The denominator changes from Period Frequency to Generation Control Frequency.