Create a Net-to-Gross Earnings Element

This example demonstrates how to create a net-to-gross (gross-up) earnings element when an organization wants to pay a person a specific net amount on a bonus.

Before you create your earnings element, you may want to determine the following:

Decisions to Consider	In This Example
What is the primary classification of this earning?	Irregular Earnings
Is the element recurring or nonrecurring?	Nonrecurring
Who is the bonus recipient?	Linda Swift
How much is the bonus?	1000 GBP
What is the allowed difference between the specified bonus and the actual amount paid?	.05 GBP
What is the calculation rule?	Flat amount

Creating the Earnings Element

Perform the following steps to create the element:

1. In the Payroll work area, click Elements.

2. Click Create and then select the values shown in the table in the Create Element window.

   Field	Value
   Legislative Data Group	UK LDG
   Primary Classification	Irregular Earnings
   Secondary Classification	Bonus
   Category	Standard

3. Click Continue.

4. On the Create Element: Basic Information page select the values shown in the table.

   Field or Question	Value
   Name	Bonus
   Reporting Name	Bonus
   Effective Date	06-April-2017
   Should every person eligible for the element automatically receive it?	No
   What is the earliest entry date for this element?	First Standard Earning Date
   What is the latest entry date for the element?	Last Standard Earning Date
   At which employment level should this element be attached?	Assignment Level
   Does the element recur each payroll period, or does it require explicit entry?	Nonrecurring
   Process the element only once in each payroll period?	Yes Note: All gross-up earnings elements must be processed and paid separately from other elements.
   Can a person have more than one entry of this element in a payroll period?	Yes
   Process and pay element separately or with other earnings elements?	Process separately and pay separately
   Tax this earning across multiple pay periods?	No
   Prorate this earning across all periods during which it was earned, and consider it for FLSA calculations, such as for commissions, bonuses, incentives, and other nondiscretionary earnings?	No

5. Click Next.

6. On the Create Element: Additional Details page select the values shown in the table.

   Field or Question	Value
   What is the calculation rule?	Flat Amount Note: The default value is Flat Amount. Do not change this value. All gross-up earnings must have a calculation rule of Flat Amount.
   What is the default periodicity of this element?	Periodically
   Periodicity Conversion Rule	Periodic Work Schedule Rate Annualized
   How do you want the work units to be reported?	None
   Is this element subject to retroactive changes?	No
   Use this element to calculate a gross amount from a specified net amount?	Yes
   Should this element be included in the earnings calculation of the FLSA overtime base rate?	No
   Should this element be included in the hours calculation of the FLSA overtime base rate?	No

7. Click Next.

8. Click Submit.

9. In the Element Overview pane, select and review each input value, as shown in the table.

   Input Value	Description
   Pay Value	The gross pay value to be processed in the payroll run, entered by the iterative formula when it completes gross-up calculations.
   Net	The user-entered flat amount, which provides the iterative formula with the desired net pay.
   Low Gross	Used by the iterative formula to hold the lower gross pay guess, which feeds into the next iteration of the formula.
   High Gross	Used by the iterative formula to hold the higher gross pay guess, which feeds into the next iteration of the formula.
   Remainder	The amount by which the additional pay to be paid by the employer (gross minus desired net) differs from the total of the balances that are eligible for net-to-gross processing. This amount is returned by the iterative formula.
   To Within	The amount by which actual net can differ from desired net after normal processing. This amount must not be zero but can be a nominal amount such as 0.01.
   Additional Amount	The amount to add to the desired net to calculate gross pay. This amount is returned by the iterative formula.

   Note: Not all input values are visible by default.

Creating Eligibility Rules

Perform the following steps to create eligibility rules:

1. In the Element Overview pane, click Element Eligibility.

2. Select Create Element Eligibility from the Actions menu.

3. In the Element Eligibility Name field, enter Bonus.

4. Click Save.

Reviewing Iterative Processing Order

Perform the following steps to review the iterative processing order:

1. In the Element Overview pane, click Bonus.

2. In the Advanced Rules section, review the iterative order.

   Note: The default value is 1000. If you have more than one iterative element that may be processed in the same payroll flow, it's important to adjust the iterative order to indicate which should be processed first. Iterative order must be in the reverse sequence of the processing priority numbers. The element with the lowest iterative priority number is reduced first.

Including Balances in the Net-to-Gross Processing

Perform the following steps to include balances:

1. In the Element Overview pane, click Balance Feeds.

2. Review the balances to which the bonus contributes.

3. In the Element Overview pane, click Gross Balance Exclusions.

4. Add any balances that have been set to exclude by default if you want to include it on this specific earnings.

5. Click Submit.

Creating an Element Entry

In this example, create the element entry for the bonus for Linda Swift.

1. In the Payroll work area, select Element Entries.

2. In the Name field, enter Swift, Linda.

3. In the Legislative Data Group field, select UK LDG.

4. In the Effective As-of Date field, enter 06-April-2017.

5. Click Search.

6. In the Search Results, select Linda Swift.

7. Click Create.

8. In the Effective Date field, enter 06-April-2017.

9. In the Element Name field, select Bonus.

10. In the Assignment field, select E1026.

11. Click Continue.

12. In the Net Value field, enter 1000.00.

    Note: If you want to pay a net-to-gross element, without the net-to-gross processing, add the flat amount in the Amount field. This amount will be the gross paid. It will be reduced by the applicable deductions.

13. In the To Within field, enter .05.

14. Click Submit.