Create a Net-to-Gross Earnings Element

You can create a net-to-gross (gross-up) element for any recurring or nonrecurring earnings element using these primary classifications:

• Standard Earnings

• Supplemental Earnings

Note: Canada does not support gross-up functionality for Taxable Benefits.

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

In this example, you're creating a nonrecurring, Supplemental Earnings net-to-gross earnings element for Linda Swift, who has received a bonus amount of 1000 Canadian Dollars. The allowed difference between the specified bonus and the actual amount paid is presumed to be .05 Canadian Dollars.

Creating a gross-up earnings element includes:

• Creating the earnings element

• Creating Eligibility Rules

• Reviewing Iterative Processing Order

• Including Balances in the Net-to-Gross Processing

• Creating an element entry

How to Create the Earnings Element

Perform these steps to create the element:

1. Search and select the Elements task in the Payrol area under My Client Groups.

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

   Field	Value
   Legislative Data Group	CA LDG
   Primary Classification	Supplemental Earnings
   Secondary Classification	Bonus
   Category	Standard

3. Click Continue.

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

   Field or Question	Value
   Name	Bonus
   Reporting Name	Bonus
   Effective Date	01/01/2013
   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
   Does the element recur each payroll period, or does it require explicit entry?	Nonrecurring
   Process and pay element separately or with the other earnings elements?	Process separately and pay separately Note: All gross-up earnings elements must be processed and paid separately from other elements.

5. Click Next.

6. On the Create Element: Additional Details page select the values shown in this 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.
   Use this element to calculate a gross amount from a specified net amount?	Yes

7. Click Next.

8. Click Submit.

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

How to Create Eligibility Rules

Perform these 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.

How to Review Iterative Processing Order

Perform these 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.

How to Include Balances in the Net-to-Gross Processing

Perform these 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.

How to Create an Element Entry

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

1. Search and select the Element Entries task under Payroll in My Client Groups.

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

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

4. In the Effective As-of Date field, enter 01/01/2013.

5. Click Search.

6. In the Search Results, select Linda Swift.

7. Click Create.

8. In the Effective Date field, enter 01/01/2013.

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.