Overview of Value by Criteria Allowance Setup

Follow the suggested steps described in this section to set up an allowance that is paid at differing rates according to the criteria your organization uses.

See Values Defined by Criteria in Implementing Global Human Resources for more information.

It is a prerequisite that you complete the steps in the Common Setup section of this document.

The following table summarizes the tasks and setup decisions.

Value by Criteria Allowances Setup Summary

TASK	ATTRIBUTE	VALUE
Create Allowance Element	Calculation rule	Flat amount
N/A	Periodicity	Annual
Manage Descriptive Flexfields	N/A	Optional task - if additional information required to record criteria
Create Values Defined by Criteria	N/A	N/A
Create Rate Definition	Category	Value by Criteria
Create Calculation Value Definition	Calculation Values - Rate Definition	User-defined rate definition created previously.
Create Calculation Factor for Allowance Element	Calculation Step	Rate Amount
	Calculation Value Definition	User-defined calculation
Edit Earnings Formula	Formula Name	User-defined flat amount allowance element
Create Element Entries	N/A	N/A
Run Generate HCM Rates Process	Process Mode	Full

Consider the following example:

ALLOWANCE	GRADE	CRITERIA (CALCULATION VALUE DEFINITION)	ANNUAL ALLOWANCE AMOUNT (£)
Accountancy Allowance	01	Accountancy Lower	1500
Accountancy Allowance	01	Accountancy Higher	2400
Accountancy Allowance	02	Accountancy Default	2800
Accountancy Allowance	03	Accountancy London Lower	3200
Accountancy Allowance	03	Accountancy London Higher	3500
Accountancy Allowance	03	Accountancy National	300
Accountancy Allowance	AA	Accountancy Default	600

In the table shown, the same allowance is payable at a different rate according to the criteria shown:

• Employees on Grade 01 receive a higher or lower amount allowance payment.
• Employees on Grade 02 are eligible for a single allowance payment rate that is specific to their grade.
• Employees on Grade 03 and located in London are entitled to a higher or lower allowance payment. Employees on Grade 03 based elsewhere are entitled to a different amount.
• All other employees (not on Grade 01, 02, or 03) are eligible for a default amount.

Create Allowance Element;

Create a new flat amount earnings element for your allowance:

1. Using the Elements task, click Create to create a new Regular Earnings element (standard category).
2. Select Flat Amount as calculation rule and Annually as the periodicity.
3. In the Special Rules section, select the user-defined allowance proration event group and the default Entry Changes for Retro event group.
4. Review the element details and enter further information in the UK Element Information region, including the element type (allowance). This ensures the allowance is included in the Allowance Code and Allowance History files. (If there is no Allowance element type, the allowance is not identified as liable for MyCSP reporting.):

Record Additional Criteria – Manage Descriptive Flexfields

If additional criteria is required, consider how you will record it. In our example, the additional criteria is an employee’s eligibility for the lower or higher rate. (The assumption is that the Grade and Location fields will also be referenced.) We configured the Assignment Descriptive Flexfield (PER_ASG_DF) to record the additional criteria.

Note: As a prerequisite, create any new lookup type or value set that you require. We created a value set that contained a new lookup type (for the Higher and Lower values).

1. In Setup and Maintenance, select Manage Employment Descriptive Flexfields (or Manage Descriptive Flexfields) task.
2. Select the Assignment Attributes (PER_ASG_DF) flexfield and create a new context.
3. Add a context-sensitive segment, Grade Range, and then deploy the flexfield.
4. If you need to record further information on a flexfield, note the flexfield attribute used as you will need to use this when creating the value by criteria definition.
5. You can then record the additional information on the assignment. For example, in our example, there is now a Grade Range field on the assignment that contains two values: Higher and Lower.

Create Values Defined by Criteria

Create the criteria and values that your allowance will use:

1. Using the Values Defined by Criteria task, click Create to create a new value by criteria definition.
2. Create the criteria and calculation value definitions for each set of criteria:

Create Rate Definition – Value by Criteria

Create a new rate definition to associate with the values by criteria definition:

1. Using the Rate Definition task, click Create to create a new rate definition. The category must be Value by Criteria.
2. Select the Value by Criteria Name created previously. The Calculate Live Rates field must be unselected and Reporting Required selected. Then submit the rate definition.

Create Calculation Value Definition

Create a new calculation value definition to associate with the value by criteria definition:

1. Using the Calculation Values Definition task, click Create to create a new calculation value definition.
2. Enter the details as shown:

   FIELD	VALUE
   Name	User-defined value by criteria definition created previously.
   Calculation Type	Rate Definition

3. Select Date Earned in the Retrieval Date field.
4. Create a range of values in the From Value and To Value columns and link the calculation value definition to the Derived Rate definition created previously.

Create Calculation Factor

Create a calculation factor for the flat amount allowance element and link it to the calculation value definition created previously:

1. Using the Elements task, search for the flat amount allowance element.
2. Select Calculation Factors and click Create to create a new calculation factor.
3. Enter the details as shown:

   FIELD	VALUE
   Calculation Step	Rate Amount
   Calculation Value Definition	User-defined value definition created previously.

Create Element Entries

Once the above setup steps are completed, you can create element entries for employees who are in receipt of this type of allowance:

1. Using the Element Entries task, select the flat amount allowance element.
2. The pay value for the flat amount allowance element is recorded on the rate definition and not the element entry, therefore the Amount field is blank on the element entry.

Next, run the Generate HCM Rates Process prior to running your payroll.