Additional Social Insurance Calculation for Kuwait

Let's outline the steps required for administering additional social insurance payments for Oracle Fusion Human Capital Management for Kuwait. It supports the implementation team in understanding how to:

Create the supporting payroll definitions
Identify the employees who are subject to these deductions and record the requisite information for processing the deductions
Process the payroll run and view the results

The following assumptions are made while implementing the above:

The user performing these tasks has the role of Payroll Manager
The user has a payroll license for Kuwait
At least one legislative data group already exists for Kuwait for which the additional socialinsurance deductions are being setup.

Overview of Additional Social Insurance Deductions

Kuwait social insurance authorities can request by a formal letter that additional monthly social insurance deductions be deducted from an employees pay. The employee must already be subject to standard social insurance deductions before any additional social insurance can be levied.

To calculate and deduct additional social insurance from an employee, a set of payroll definitions must be created, supporting the additional social insurance deductions that needs to be taken. The Elements task is used to create the element and the related payroll definitions such as balances, formulas, and the calculation component that is tied to these definitions. The name of the element is used as a prefix for all the related payroll definitions such as balances, formulas, and so on, as well as the name of the calculation component that can be assigned to an employee to trigger the deduction.

Each employee subject to additional social insurance must have the appropriate additional social insurance calculation component added as a child component to their employee social insurance details calculation component. The Manage Calculation Cards task is used to associate the calculation components for an employee and also gather the information required to process and report the deductions. The information gathered includes:

The insurance type categorizing the deduction
The amount to be deducted
The time period for making the deductions
Arrears processing when there are insufficient funds to pay the amount
The authority that requested the deduction
The unique reference number identifying the deduction for the specific employee

Additional social insurance deductions are made automatically each month during payroll processing and are triggered by the calculation component assigned to the specific employees. The calculation component represents each additional social insurance deduction assigned to the employee. These deductions will continue until the total amount has been recovered. An employee can be subject to more than one additional social insurance deduction at any given time.

Once calculated, the results for the employee can be seen on the employees Statement of Earnings (SOE), employee’s payslip, and the statutory reports such as Report 167, Report 166 and Report 103. The element name associated with the additional social insurance deduction will be used in the SOE and payslip; while the statutory reports use the deduction codes linked to the Insurance type to identify specific amounts for reporting purposes.

Create Supporting Payroll Definitions

The Elements task uses a questionnaire to gather information which is then used to create all the supporting payroll definitions such as elements, balances, formulas, and the calculation component required to process additional social insurance deductions. Follow the steps below:

Sign in to the application with a role that has payroll privileges.
Navigate to the Payroll Calculations work area.
Select Elements task from the task list.
On the Elements page, click Create.
Select an existing Kuwait Legislative Data Group for which you want to define the additional social insurance deduction.
Select Social Insurance Deductions in the Primary Classification field.
Select Additional Social Insurance in the Secondary Classification field.
The Category will be defaulted to Social Insurance Deduction.
Click Continue.
Enter a Name for the element.
Note: This name is used as the prefix for all the related supporting payroll definitions that are created.
Enter a Reporting Name. This name is shown when the element is displayed on reports.
Enter a Description for the element.
Enter the Effective Date from which the element can be used.
The Input Currency is defaulted to Kuwaiti Dinar. All other values will be defaulted and should be left unchanged.
Click Next twice.
The review page summarizing the values entered will be shown and if OK click Submit to create the element and its associated payroll definitions. Review and correct the information before submitting.
The breakup of what is created is shown on the Element Summary page. Click Done when finished.
You can repeat the above steps for as many different additional social insurance deductions as required.

Set Up Additional Social Insurance Deduction for an Employee

The Calculation Card task is used to associate the additional social insurance calculation component with the employee and record the details required to deduct the correct amount. Follow the steps detailed below:

Navigate to the Payroll Calculations work area.
Select Manage Calculation Cards from the task list.
Enter the Name of the employee that is subject to the additional social insurance deduction.
Select the same Legislative Data Group that was used when creating the additional social insurance deduction component.
Enter the Effective-As-of Date and ensure that it is on or after the date used when creating theelement.
Click Search.
Select the employee for whom you want to set up the additional social insurance deduction component. Any available calculation cards that the employee has will appear in the Search Results.
Select the Employee Social Insurance Details calculation card.
Note: This calculation card is automatically created at the time of hiring if the employee’s citizenship information was entered during the hiring process.
Click Add Row in the Calculation Components section to create a new calculation component.
In the Calculation Component field, select the name used when creating the element.
Select Employee Social Insurance Details in the Parent Calculation Component field.
Select the Insurance Type that categorizes the additional social insurance deduction.
Click OK.
Make sure that the newly created calculation component is selected.
Click Add Row in the Calculation Component Details section.
Select Global Additional Insurance Details from the list and click OK.

Select the required Partial Deductions Arrears Rule from the list. The Partial Deduction Arrears Rule controls how deductions that couldn't be made due to insufficient pay are handled. The table below gives the list of the available arrears rules.

Arrears Processing Rules

Arrears Rule	Description
Do not take a partial deduction or create arrears	If the full amount cannot be deducted due to insufficientfunds defer the deduction and do not recognise the amount as being in arrears.
Do not take partial deduction, place all in arrears	If the full amount cannot be deducted due to insufficient funds defer the deduction and recognise the full amount as being in arrears.
Take a partial deduction, but do not create arrears	If the full amount can't be deducted due to insufficient funds deduct what can be taken but do not recognise the outstanding amount as being in arrears.
Take a partial deduction, place remaining in arrears	If the full amount can't be deducted due to insufficient funds deduct what can be taken but recognise the outstanding amount as being in arrears.

Do not enter any values in any of the other fields.
Make sure that the newly created calculation component is selected.
Create a new calculation component detail using Add Row at top of Calculation Component Details section.
Select Kuwait Additional Insurance Details from the list and click OK.
Enter combination of Monthly Payment and Number of Installments or Total Debt and Number of Installments.
Note: Either combination will define the total amount to be deducted and the deduction period.
Enter the Deduction Authority. This is the name of the social insurance authority that requested the deduction to be made.
Enter the Reference Number. This is the unique identifier for this social insurance deduction for this person.
Click Save and Close.
Repeat the above procedure for each additional social insurance deduction the employee has.
Note: It's not possible for an employee to have more than one calculation component using the same element and insurance type at the same time. If multiple concurrent additional social insurance deductions for the same insurance type are required then additional elements will have to be defined.

Deduction of Additional Social Insurance During a Payroll Run

The existence of one or more child additional social insurance calculation components for an employee’s Employee Social Insurance Details calculation component will trigger the payroll calculation. The calculation will be done at payroll relationship level taking into account the specific information recorded for the amount of deduction to be made, the procedure for managing arrears and arrears recovery, the insurance type, the deduction authority, and so on. The deductions will continue until the total amount is deducted.

Viewing and Reporting Results for Additional Social Insurance Deductions

Once the payroll is run, the results of each deduction as well as any arrears for an employee are calculated and recorded using the elements and balances that were created by the Manage Elements task for the specific additional social insurance deduction. Please refer to the Payroll definitions section below for more details. These deductions will appear alongside the standard social insurance deductions on the employees SOE and payslip.

Statutory reports such as Report 167, Report 166, and Report 103 identify specific types of additional social insurance for reporting using the insurance type (deduction code) that was used to classify each additional social insurance calculation component when adding it to the employee’s calculation card using the Manage Calculation Cards task.