Overview of Payroll Calculation

When you create an element, the application generates the rules and definitions required to calculate earnings or deduction amount. For all types of elements, these rules and definitions include elements, formulas, and processing rules.

This topic explains the payroll calculation information rules and definitions generated for user-defined elements with one of the following categories:

• Absence

• Benefit

• Involuntary Deductions

• Time card

All predefined tax and social insurance elements also include payroll calculation information rules and definitions.

Note:

Elements that use calculation information definitions don't capture the values required for the calculation on element input values.

Task Summary

The following table summarizes the purpose of each type of calculation information and the task you can use to view or edit it.

Calculation Information	Description	Task
Payroll calculation information	The payroll calculation information task groups rates and rules used by the payroll run to calculate values for user-defined earnings, and deductions. Predefined elements such as tax and social insurance rules also use the payroll calculation feature to provide a group of rates and rules which vary by country or territory.	Use the Payroll Calculation Information task.
Payroll components	A payroll component is a group of rates and rules that the payroll run uses to calculate values for earnings and deductions. When you create elements in certain classifications and categories, such as involuntary deductions, the element template creates a payroll component with the same name. You can manage payroll components using predefined component groups, which vary by country or territory but may include social insurance, taxes, retirement plans, involuntary deductions, and benefits.	Use the Payroll Calculation Information task to view payroll components and their associated rules.
Wage basis rules	Wage basis rules determine the earnings that contribute to a deductible amount or, for exemptions, the elements that reduce the amount subject to deduction. For example, wage basis rules might define which secondary classifications of standard and supplemental earnings are subject to a particular tax. Rules may vary based on reference criteria such as a worker's place of residence.	Use the Component Group Rules task to define the rules and references. Use the Calculation Cards task to enter reference values for workers.
Calculation value definitions	Calculation value definitions store calculation rates and rules, which may vary based on other criteria. For example you can use calculation value definitions to calculate regional income tax rates for employees, which vary based on their income levels. The calculation value definition controls which calculation values are enterable on a calculation card.	Use the Calculation Value Definitions task to view predefined definitions and the definitions that element templates create. Note: You can edit definitions that element templates create, such as adding default calculation values.
Calculation factors	Calculation factors indicate which calculation value definition to use when calculating the amount. For example, a calculation factor might identify which set of tax rates to use based on the tax code of the employee. If tax rates vary based on a factor such as a person's filing status, then filing status is defined as a calculation factor reference. Thus, an element may have multiple calculation factors, one for each unique set of rules and references values.	Use the Elements, Element Overview task to access calculation factors. Use the Payroll Calculation Information task to create new calculation factors. Normally, you don't need to create new factors, but if you do, you must also edit the element's payroll formula to use the new calculation factors.
Calculation components	When an element template creates a payroll component, it also creates calculation components that you can enter on personal calculation cards to enter specific details for the person.	Use the Calculation Cards task to enter calculation components for a person.
Calculation types	A calculation type describes a way of calculating a value. For example, calculating a value as a Flat Amount or by applying a Rate to a value. There's a predefined set of Calculation Types.	Use the Calculation Value Definitions task to view calculation types.
Calculation steps	A Calculation Step is a name or label that denotes part of a payroll calculation. For example, a time calculation can consist of the following parts: Calculate hours worked Calculate hourly rate A regional tax calculation can consist of the following parts: Calculate Exemptions Calculate Allowances Calculate Tax Each one of these is a calculation step in a fast formula.	Use the Payroll Calculation Information task.
Calculation methods	Predefined calculation methods are a way of performing a payroll calculation. For example, a tax could be calculated using a cumulative year-to-date payroll balance or a periodic payroll value.	Use the Payroll Calculation Information task.
Calculation factors	Calculation factors create an association between an element, calculation step, and a calculation value definition. Calculation factors indicate which calculation value definition to use when calculating the amount. Calculation factors can support complex calculations such as tax rates. For example, if a tax rate varies based on a factor such as a person's filing status the filing status can be defined as a calculation factor reference thus, an element may have multiple calculation factors, one for each unique set of rules and references values.	Use the Elements, Element Overview task.