Iterative Deductions for Pretax Elements

Enable the iterative deduction processing for Pretax elements for an employee so that sufficient net pay is available for other statutory tax deductions or involuntary deductions. The statutory tax deductions and involuntary deductions are deducted on priority when an employee has insufficient earnings.

When multiple elements exist, the pretax deductions are reduced in the order as listed in this table.

Secondary Classification	Default Iterative Order
User-defined Secondary Classification	300
Registered Retirement Plan	200
Union Dues	100

Note: If you create a user-defined secondary classification for a pretax element, change the iterative order of the element because the default is set to 300. To change the iterative order of the element, update the Iterative Order property under the Advanced Rules section of the base element.

Here's the list of balances that hold the "tax not taken" amounts for the various taxes:

Federal Tax Not Taken
Provincial Tax Not Taken
CPP Not Taken
EI Not Taken
Payroll Tax Not Taken
QPP Not Taken
QPIP Not Taken

The existing Tax Not Taken balance holds the amount for all taxes not taken.

Iterative Process for New Pretax Elements

Use the Elements task to enable the iterative deduction processing for new pretax deduction elements. To enable iterative processing for the pretax element, while creating the pretax deduction element, answer Yes to this question in the elements template:

Is this element subject to iterative processing?

Note: The default value for this question is No.

This question is only presented for pretax elements when the element isn't subject to proration, when your answer to the following question is No:

Is this element subject to proration?

For iterative processing to occur, designate one of these partial deduction options for the element's standard rule:

Don't take a partial deduction or create arrears.
Don't take a partial deduction, place all in arrears.
Take a partial deduction, but don't create arrears.
Take a partial deduction, place remaining in arrears.

It's strongly suggested that the value of the Clear Arrears parameter in the element entry is retained as No. If it's set to Yes, iteration processing performance is impacted.

Note: The default value of the Clear Arrears parameter in the element entry is No.

Iterative Process for Existing Pretax Elements

Use the Element Upgrade process to upgrade the existing pretax elements to support the iterative deduction processing.

When you run this process, it performs different actions upon the objects related to the elements, such as input values, formulas, and balances. This process generates an output report in Microsoft Excel format that describes these changes.

Note: If you have enabled proration on a pretax element, you can't upgrade it using this process.

Before you begin the upgrade process, consider the following:

You can't roll back the changes made to your existing pretax elements. Hence, first run this process in a test environment. Test your scenarios to ensure they perform correctly when you run payroll after the upgrade process. Run this process in a production environment, only after you have verified your scenarios in a test environment and you're satisfied with the results.
Run this process initially in Draft mode, and use the output report to review the changes to be made. Once your evaluation is complete, and you approve of the changes, perform it in Final mode to implement the element upgrade.
By default, when you enter the primary classification, this process runs against all eligible secondary classifications and elements. To limit the scope of the output, run it against specific secondary classification and element combinations.
When this process updates formula objects, it overrides any manual configurations you may have made to the formulas. Check the Oracle Delivered Modified Formula column of the Draft mode output report to identify these formula objects. Use the Formula Upgrade Option parameter to replace or preserve these formulas.
To upgrade the pretax element for iteration functionality, you should first set the date in process configuration parameter "Date used by the element upgrade process for iteration flag". This indicates the effective date used by the element upgrade process to update the iteration indicator for the pretax element. It is suggested to use the next date of the latest payroll process. For example, if the latest payroll process completion date is November 15, 2018, then set this parameter to November 16, 2018 to avoid the retroactive processing effect because of pretax iteration. The entry format for the date is YYYY-MM-DD (2018-11-16).

To upgrade your existing pretax elements to support the new iterative calculation processing:

Navigate to Payroll under My Client Groups from the Home page.
Click Submit a Flow, and select an LDG.
Search for and select the Run Element Upgrade process, and click Next.

Enter these values for the pretax elements that require iteration.

Field	Value
Mode	Select Draft mode initially.
Primary Classifications	Pretax Deductions
Secondary Classification	Select a value, for example, Union Dues.
Enable Feature	Iteration on Pretax Element
Element Name	Select the element name for which you want to enable iterative processing.
Formula Upgrade Option	Display all formulas

Review the output of the report to ensure the pretax elements you want to upgrade are displayed on the report.
If you're satisfied with the results, run the process again in Final mode.
Submit the Compile Formula process to recompile all impacted formulas. Use '%' to include an entry for the formula and Oracle Payroll for the Formula Type parameter.
Run payroll and verify the results.
Once you have tested all of your pretax iteration scenarios and ensured they process correctly in payroll, repeat this process in your production environment.

Note: Also upgrade your existing involuntary deduction elements (and recompile the formulas) if you have:

Note: If you create new involuntary deduction elements, you don't have to run the upgrade process.