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Allowances Element for Saudi Arabia

Earning allowances is an element for which Saudi Arabia localization has predefined calculation rules.

The calculation rules for the below allowances are generated when creating the element using the related template. Implementation teams need to select the appropriate secondary classification when generating a new allowance element. Implementation teams can also set up grade rates and calculation value definitions.

The calculations of these allowances are triggered through element entries.

Children Social Allowance

The children social allowance depends on the number of dependent children. This allowance is paid to the local nationals only.

The following input is required for the calculation:

Citizenship information in the calculation card for the person.
Contact details for the employee in the contacts section in the Manage Person page with contact type Child. The dependent must also be marked as Statutory Dependent. Number of dependent children is based on the data entered here.
A range value for the seeded calculation value definition Children Social Allowance. Allowance per child is based on the value entered here.

To create the range value:

Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager.
Navigate to Manage Calculation Value Definitions task in the Payroll Calculation work area.
Select the calculation value definitions Children Social Allowance.
Enter the value of the allowance per child by adding a row in Range Values.

Note:

The From Value must be 0, while any value can be chosen for the To Value since it doesn't affect calculation.
The process of entering a value in calculation value definitions is the same for the other allowances.

Cost of Living Allowance

The cost of living allowance can be a flat amount or a percentage of salary.

The following input is needed to perform the calculation:

Range value for the seeded calculation value definitions Cost of Living Allowance Percent.
Range values for the seeded calculation value definitions Maximum Cost of Living Allowance and Minimum Cost of Living Allowance: These two amounts will be used to set the maximum and minimum amount, which a person is eligible for the cost of living allowances.

Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance. The Cost of Living Allowance Percent is applied to this monthly salary basis and the resulting amount is compared with the Maximum Cost of Living Allowance and Minimum Cost of Living Allowance. In case this is out of range, this is adjusted.

Grade Allowance

The basic salary is a fixed amount that is paid to the employee according to their grade. Since rates can be entered for each grade, it is suggested that you use grade rate functionality for it.

The following input is needed to perform the calculation:

Grades and grade rates must be setup following standard global process. The grade must be associated to the payee in the Employment page.
Create an element entry for the payee entering the grade rate ID as an input value entry for Grade Rate.
Attach the Grade Rate to the seeded Value Definition Grade Allowance Grade Rate.

Hourly Basic Salary

For employees under hourly contract the amount paid monthly is based on the number of hours worked during the month. The hourly rate depends on the grade of the employee.

The following input is needed to perform the calculation:

Create a grade and grade rate and associate it to the employee in Employment page and in Element entries.
The value is calculated based on the hours worked in month * value returned from the grade rate table. Hours worked will be entered as input value
Attach the Grade Rate to the seeded Value Definition Hourly Basic Salary Grade Rate instead of entering Grade Rate ID to the input value

Housing Allowance

Housing allowance depends on the grade and marital status of an employee. The allowance can be a percentage (based on grade and marital status) or an amount (based on grade or marital status). In case of percentage based allowance, the calculated allowance amount can be subjected to a maximum and minimum limit.

If the employee avails accommodation that is provided by the employer, then the monthly paid allowance is zero. An override feature is provided where you can enter the amount of housing allowance and then no calculations are performed.

The following input is needed to perform the calculation:

Housing allowance is paid to employee if accommodation is not provided by the employer. This information is tracked at payroll relationship level and this value is defaulted to No in case there is no value entered at payroll relationship level
Marital status must be set for person in order to calculate the value of housing allowance and if no marital status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative information section.
Create range values for the seeded calculation value definition details Housing Allowance Grade Rate for Married and Housing Allowance Grade Rate for Single. In the value field of the range value UI, you can select the grade rate from the ones that have been defined as grade rates.
Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance if you have entered value of input value Rate value to be used as Percent.
Create range values for the seeded calculation value definition details Maximum Housing Allowance for Married, Minimum Housing Allowance for Married, Maximum Housing Allowance for Single and Minimum Housing Allowance for Single. In the value field for range value, you must enter minimum or maximum value depending on the marital status. These values are used to get the allowance amounts if you have entered value of input value Rate value to be used as Percent. More specifically, if this calculation option is selected, the rate is applied to this monthly salary basis. The resulting amount is compared with the Maximum and Minimum values of the allowance and, in case of being out of range, is adjusted.

Note: The calculation of housing allowance (similar to other allowances) is triggered by creating an element entry for the payee and parameters that will drive the calculation is entered as input values:

Overtime Allowance

Overtime allowance gets paid to an employee for hours worked beyond regular hours on normal working days. The employee also gets paid when they work on rest days or holidays. The overtime rate is a percentage of the salary that depends on the grade and is different for hours beyond regular (on normal working days) and hours on rest days.

The following input is needed to perform the calculation:

Attach a Gratuity Salary formula, in the Employer Gratuity PSU level Calculation Card, if not already attached. The value returned by this is the base monthly salary that is converted to a hourly salary using ROUND((monthly_salary * 12)/(365 * 8),2)
Create range values for the seeded calculation value definition details Overtime Allowance Grade Rate for Regular Days, Overtime Allowance Grade Rate for Rest Days. In the value field of the range value UI, you must choose the grade rates that are used to get the amount for rest and normal day overtime.

Shift Allowance

Shift allowance depends on the grade and may also depend on the nationality of an employee: the allowance can be in percent (based on grade and nationality) or in amount (based on grade and nationality). In case of a percent based allowance, the calculated allowance amount can also be subjected to a max and min limit.

An override facility is also provided wherein you can enter the amount and then no calculations are performed. The amount entered is processed directly as the shift allowance.

The following input is needed to perform the calculation:

Create range values for the seeded calculation value definition details Shift Allowance Grade Rate for National, Shift Allowance Grade Rate for Non-National. In the value field of the range value page, you must choose the grade rates, which are used to get the shift allowance amount.
Create range values for the seeded calculation value definition details Minimum Shift Allowance, Maximum Shift Allowance. In the value field of the range value UI, you must enter minimum or maximum value of the shift allowance. These values are used to get the allowance amount if you entered the input value Rate value to be used as Percent.

Social Allowance

Social allowance depends on marital status of the employee and is paid only to Saudi citizens.

The following input is needed to perform the calculation:

Enter the citizenship in the calculation card for the person.
Marital status must be set for person in order to calculate the value of social allowance and if no marital status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative information section.
Create range values for the seeded calculation value definition details Social Allowance for Married, Social Allowance for Single. In the value field of the range value, you must enter social allowance amount for the married or single employee.

Transport Allowance

Transport allowance depends on the grade and marital status of an employee. The allowance can be a percentage (based on grade and nationality) or an amount (based on grade or nationality). In case of percentage based allowance, the calculated allowance amount can also be subjected to a maximum and minimum limit.

If transportation is provided by the employer, then the monthly paid allowance is zero. An override feature is provided where you can enter the amount of transport allowance and no calculations are performed.

The following input is needed to perform the calculation:

Enter the transport allowance paid to employee if no transportation is provided by the employer. This information is tracked at payroll relationship level and this value is defaulted to No, in case there is no value entered at payroll relationship level.
Enter the citizenship in the calculation card for the person.
Create range values for the seeded calculation value definition details Transport Allowance Grade Rate for National and Transport Allowance Grade Rate for Non-National. In the value field of the range value, you can select the grade rate from the ones that have been defined as grade rates.
Attach a Gratuity Salary formula, in the Employer Gratuity Details card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance if you have entered value of input value Rate value to be used as Percent.
Create range values for the seeded calculation value definition details Maximum Transport Allowance, Minimum Transport Allowance. In the value field of the range value, you must enter minimum or maximum depending on the marital status. These values are used to get the allowance amounts if you have entered value of input value Rate value to be used as Percent.