Example to Calculate Rates Based on Grades Without Steps

You can calculate rate based on grades without steps. In this example, you calculate grade rate values for annual salary payments.

Scenario

You hire Mathew as a grade 5 Developer and calculate grade rate values for his annual salary payments based on grades without steps.

Configuration

Follow these steps to calculate grade rate values for Mathew:

1. Set up grades, grade ladder, and rates for the Developer job to record the level of compensation for developers in your organization.

   Perform these steps:

   • Use the Manage Grades task to set up eight separate grades, 1 to 8.

   • For each grade, enter the annual salary as shown in this table.

     Grade	Annual Salary Amount
     1	103900
     2	111800
     3	119900
     4	127800
     5	135900
     6	143700
     7	151800
     8	155500

   • Use the Progression Grade Ladders task to set up a grade ladder, Developer Salary, with Grades type. Add all eight grades to the ladder.

2. Create a rate definition of category Grade Rate based on grade details.

   Option	Value
   Periodicity	Annually
   Periodicity Formula	Standard Rate Annualized
   Currency	US Dollar

   Add a rate contributor of type Grade Ladder.

3. When hiring Mathew, on the Employment Information page, add the grade ladder and grade details as shown in this table.

   Option	Value
   Grade Ladder	Developer Salary
   Grade	5

4. Run the Generate HCM Rates process to calculate the rates based on the information held in the grade tables. Click the Submit a Flow task. After selecting a legislative data group, search for and submit the Generate HCM Rates process.

Results

The application returns a rate value of 135900.

Example to Calculate Rate Based on Grades Without Steps and Periodicity Conversion

In this example, you want to calculate rate values for Mathew's monthly salary based on grades without steps. To do this calculation, when creating a rate definition, you change the Standard Rate Annualized formula to a Monthly amount.

Use the steps outlined in the previous scenario to set up grades, grade ladder, and rates for the Developer job.

Create the rate definition based on grade details.

Option	Value
Periodicity	Calendar Month
Periodicity Formula	Standard Rate Annualized
Currency	US Dollar

Complete steps 3 and 4 in the previous scenario.

The application returns a rate value of 11325 (135900 / 12).

Note:

For a rate with a periodicity of monthly using the Standard Rate Annualized conversion formula, the rate calculation does these actions.

• Calculates an annual figure from the value and periodicity of each contributing earning and deduction.

• Converts the annual figure into a monthly value.