Overview of Rate Definitions

Use rate definitions to create rates such as salary rates, absence rates, time card rates, and other types of payroll rates.

Further, you can use a rate definition for different types of rate calculations. For example, use a salary rate definition to display an employee's salary on the salary page. You can also use it to display the employee's salary rate on the time card and to pay the employee's salary in Cloud Payroll.

Here are some rate types that you can create:

Compensation rates, such as a base salary or car allowance rate.
Rates based on a set of criteria and conditions. For example, a union rate that's based on the job and location of an employee.
Rates with multiple rate contributors, such as an overall salary rate, which is the sum of multiple salary components.
Rates derived on the grade of an employee, such as a base salary rate and payroll balance rates, such as pension reporting rate.
Rates calculated based on other rates. For example, a shift allowance rate that's calculated based on a percentage of the employee's salary rate.

You can define minimum and maximum validation rules for your rate definition. For example, define a minimum rate rule to ensure that an employee isn't paid less than the minimum hourly rate for their job.

When you create a rate definition, you can define a frequency for the rate returned by the calculation, such as 50,000 annually, or 7.25 hourly. Alternatively, you can define a rate that's calculated for a unit of work, such as a shift rate, or a mileage rate. You can control if the application calculates the rate values live or retrieves it based on the results of the Generate HCM Rates process. For example, it's a common practice for salary rates to be calculated live when you enter the salary page for an employee.

As a cloud payroll user, you can calculate most rate calculations live in the payroll run. However, you'll need to perform some complex rate calculations using the Generate HCM Rates process. In this scenario, Cloud Payroll retrieves the stored rate value directly from the rates reporting table for an employee. You can use the rates generated by the Generate HCM rates process for generating reports, such as pension reports.

Use the Rate Definitions task to define and manage rate definitions.

Categories

To create a new rate, select a category from this table.

Category	What it Does
Derived Rate	Retrieves values from one or more payroll balances or other rate definitions, including rates that retrieve element entry values. Use this option to create a rate that retrieves a value from one or more rate contributors.
Element	Retrieves rate information from an element input value. When using salary rates, use this type of rate definition to create and update entries, such as create or update a salary element entry. Select a storage type of Amount or Factor and then select the name of a corresponding element. You can select one of these storage types: Amount: Retrieves a value from or posts to the element input value with a special purpose of Primary Input Value. For example, 'Amount' is the primary input value for elements created with the flat amount calculation rule, such as salary. If you associate a flat amount salary element with a rate, the application retrieves or posts to the salary amount for an employee. Factor: Retrieves a value from or posts to the element input value with a special purpose of Factor. The 'Factor' is the primary input value for elements created with the Factor calculation rule. Use this rate definition to apply the factor held on an element entry to a payroll balance. You can also use it to apply it to another rate definition including base rates or an overall salary rate. For example, the application calculates your company's car allowance rate based on a factor of salary. The application captures the factor value, such as 0.05 at the employee level on their car allowance element entry. When creating the car allowance rate definition, select your car allowance element to enable the rate to retrieve the factor value for an employee. In the rate contributor region, select your salary rate definition. This selection ensures that the application calculates the car allowance rate based on a factor value of the employee's salary rate. Note: The element rate doesn't support the input value information that's held on Hours x Rate elements. It's a common practice for the payment rate for this type of element to be based on a recurring flat amount element, such as salary. Note: Salary rates supports Factor, but the payroll run doesn't. Use the Generate HCM Rates process to calculate this type of rate. Also, you can use the process to retrieve the stored value in the payroll run using the predefined `CALL_CALC_VALUE` formula.
Value by Criteria	Retrieves values from a single value by criteria definition. A value by criteria definition specifies one or more evaluation conditions that determine a particular value or rate. You can specify the conditions as a tree structure to define the evaluation sequence. For example, you can define a value-by-criteria to capture car allowance and housing allowance values based on an employee's job. Define a rate definition to retrieve car allowance rates and another rate definition to retrieve housing allowance rates. Both rate definitions refer to the same value-by-criteria and use the criteria of job to retrieve the appropriate rate values for an employee.
Grade Rate	Retrieves values based on an employee's grade details.
Formula	Retrieves values from a rate definition formula. The Generate HCM Rates process supports the calculation of most formula-based rates. However, rates that include complex payroll formula contexts or use balances calculated within the payroll run, are calculated by the payroll run. Note: Formula-based rates are only supported for rate calculations in the payroll run.