Set Up Single-Rate Allowance

Follow these steps to set up single rate allowances.

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 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). You must select Allowance in the Element Type field. Otherwise, the allowance is not identifiable as liable for reporting.

Create Rate Definition – Salary Basis Element

Create a rate definition for the salary basis element:

1. Using the Rate Definition task, click Create to create a new rate definition:
2. Enter the details as shown:

   FIELD	VALUE
   Category	Element
   Storage Type	Amount
   Element Name	The salary basis element you created previously

3. You do not need to make changes to the Basic Details and Returned Rate Details. Reporting Required and Calculate Live Rates must both be selected.

The contributor type for the rate definition is created automatically as Input Value.

Create Rate Definition – Derived Rate

Create a Derived Rate rate definition that will be associated with the salary basis rate definition:

1. Using the Rate Definition task, click Create to create a new rate definition.
2. Enter the details as shown:

   FIELD	VALUE
   Category	Derived Rate
   Storage Type	Leave blank
   Element Name	Leave blank

3. Uncheck the Calculate Live Rates field. Reporting Required is selected.
4. Select Value in the Factor Rule field and enter a name. The name is a numeric value, for example, 0.05 is 5%.
5. Create a new rate contributor. Select Rate Definition as the contributor type.
6. Enter the details as shown:

   FIELD	VALUE
   Add or Subtract	Add
   Rate Name	Salary Basis rate definition
   Periodicity	Annually

Create Calculation Value Definition

Create a calculation value definition for the Derived Rate rate 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
   New Value Definition Group	New user-defined allowances group
   Calculation Type	Rate Definition

3. Select Date Earned in the Retrieval Date field.
4. In the Calculation Values region, enter a range of values in the From Value and To Value columns and select the Derived Rate rate definition created previously to link it to the calculation value definition.

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 and open 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.

Edit the Formula Attached to the Flat Amount Allowance Element

Using the Fast Formulas task, edit the earnings formula for the flat amount allowance element:

Replace the line 'l_amount = amount' with the following lines in order to obtain the rate definition values:

change_contexts(PART_NAME = 'ORA_RATE_AMOUNT') 
        (                
                 SET_INPUT('BASE',0)                 EXECUTE('CALL_CALC_VALUE')                 l_amount = GET_OUTPUT('DED_AMOUNT',0) 

Note: You must make the same changes to the flat amount earnings element formulas created for value by criteria allowances.

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. Using the Element Entries task, select the flat amount allowance element. The Pay Value for the flat amount allowance element is stored 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.