How You Enable Salary Itemization Using Incremental Components

You can enable itemization that lets HR specialists and managers reflect the different reasons for salary changes, such as merit or location. Use the Salary Basis task in the Compensation work area.

Incremental Component Configuration

Here are the key settings for the salary basis that let you include salary components for itemization.

Field	Value
Salary Basis Type	Salary adjustment amount is determined by incremental components.
Components to Display When Adjusting Salary	Either of these: Select specific incremental components to display during allocation. Enable incremental component selection during allocation.

You add incremental salary components or can change the available components by editing the CMP_SALARY_COMPONENTS lookup type. Use the Manage Common Lookups task in the Compensation work area.

Incremental Component Processing

When values change for incremental salary components, the payroll element associated with the salary basis holds the new salary amount calculated from the component adjustments. Payroll doesn't receive individual component values for processing.

Example

The person's current salary is 50,000 USD. Their manager enters incremental component adjustment percentages and salary calculations decide the monetary amounts, as shown here. The calculations then sum the monetary amounts and the original salary amount to decide the new salary amount of 60,000 USD. Here's the equation:

(5,000 + 3,000 + 2,000 + 50,000)

Salary Component	Adjustment Percentage	Calculated USD
Merit	10	5,000
Promotion	6	3,000
Adjustment	4	2,000