Rate Conversion Rules

You can select specific formula rules when you create an element that manages rate conversions. These conversion rules apply to earnings classification elements, including standard, supplemental, absence, and time elements.

You are prompted to set conversion rules in the following cases.

Conversion rule type	When you set it
Periodicity	When defining an earnings element and have selected the Flat amount or Hours * Rate calculation rule
Proration	When defining an earnings element and have selected the Flat amount calculation rule When defining an absence element
Work Unit	When defining an earnings element that's subject to proration

Conversion Rules

This table describes the predefined formula rules.

Rate conversion rule	What it does	Here's an example
Standard Rate Annualized	Calculates the annual rate using the input periodicity, and converts the amount to an output periodicity and rate. Uses default values to calculate the annual rate, such as 2080 hours or 260 working days.	To convert a weekly amount to a semimonthly periodicity, the payroll process: Multiplies the weekly amount by 52. Divides the result by 24.
Standard Rate Daily	Calculates the daily rate using the input periodicity, and converts the amount to an output periodicity and rate. Uses a default value to calculate the daily rate, such as 260 working days a year.	To convert an annual amount to daily periodicity, the payroll process: Divides the annual amount by 365. Multiplies the result by the number of days in the payroll period.
Standard Working Hours Rate Annualized	Uses the employee's standard working hours to convert the monetary value and their working hours to an annual value before calculating the rate. Note: Don't use this conversion rule for retirees.	Employee works 40 hours a week with a monthly salary of $1000. ((1000 * 12) / (40.00 * 52) = $5.77 per hour
Assignment Working Hours Rate Annualized	Uses the employee's working hours to convert the monetary value and their working hours to an annual value before calculating the rate. Note: Don't use this conversion rule for retirees.	Employee works 40 hours a week, with a 37.5 standard working hours a week, and a monthly salary of $1000 USD. ((1000 * 12) / (37.50 * 52) = $6.15 per hour
Periodic Work Schedule Rate Annualized	Uses the employee's work schedule for the payroll period for daily and hourly conversions. Note: Don't use this conversion rule for retirees.	For employees assigned a payroll: The employee has a monthly salary of $1000 and is assigned a monthly payroll. The formula checks the work schedule details for the month. For a daily conversion: $1000 USD per month / 20 days in the month = $50 per day For compensation calculations where the employee isn't assigned a payroll, the rate is calculated using the weekly rate calculation. The amount is converted to an annual figure and divided by the number of days or hours in that week based on the work schedule. The payroll process calculates the rate using the weekly rate calculation. It converts the amount to an annual amount. It divides the amount by the number of days or hours in that week based on the work schedule.

Work Schedule Calculations

For the Periodic Work Schedule Rate Annualized rule, the conversion rule formula determines whether a work schedule exists for a person. The calculation begins at the assignment level and continues in the mentioned order until it finds a schedule.

Assignment
Position
Job
Department
Location
Legal Employer
Enterprise

Consider these conditions to accurately calculate elements for a payroll period.

Confirm that a work schedule assigned to a person exists at the start date of the payroll period in which you're paying the person.
If a person has multiple assignments for a term, create the work schedule at terms or assignment level, but not at both levels. You could find calculation errors while setting up schedules at both levels.