Calculate Distributed Costing Example

This example shows you how the cost for an element is distributed based upon earnings elements in a distribution group.

Scenario

You distribute total cost of income tax from 30,000 USD gross pay over the earnings elements in a distribution group.

Distribute Tax Over Earnings

Create a distribution group that includes all your earnings elements and add an eligibility record with distributed costing to the income tax element.

Once you run the payroll calculation process, the costing calculation:

  • Totals the results of all elements within the distribution group

  • Calculates the percentage that each costed run result represents of the total for the group

  • Distributes the cost of the income tax proportionally

    Note:

    The process uses the ratio when generating the final costing results to complete segments not specified on the element eligibility costing. Now it's time to review the distributed results.

Cost Distribution

This table shows you how the costing results are calculated for the distributed element.

Element Name

Distributed element

Input Value

Distributed Input Value

Account

Debit (USD)

Credit (USD)

Regular Wages

NA

Earnings Calculated

NA

4310.1010.1010.3710.1010.6530.51200.100003.

20,000

NA

Regular Wages (Offset)

NA

Earnings Calculated

NA

4310.1010.1010.3710.1010.6530.51200.100004

NA

20,000

Bonus

NA

Earnings Calculated

NA

4310.1010.1010.3710.1010.6530.51200.100001

10,000

NA

Bonus (Offset)

NA

Earnings Calculated

NA

4310.1010.1010.3710.1010.6530.51200.100002

NA

10,000

Income Tax

Income Tax

Tax Calculated

Tax Calculated

4310.1010.1010.3710.1010.6530.51200.100007

8,517

NA

Regular Wages

Income Tax

Earnings Calculated

Tax Calculated

4310.1010.1010.3710.1010.6530.51200.100003

NA

5,678

Bonus

Income Tax

Earnings Calculated

Tax Calculated

4310.1010.1010.3710.1010.6530.51200.100001

NA

2,839