The Threshold Scope option (YTD or Monthly) for a component enables you to set rate tiers for an additional earning, benefit, or tax that are calculated independently each month or year.
For example, an insurance program may apply rate tiers that start from zero each month.
If the application is set up for a 13-period calendar, selecting Monthly applies the calculation logic to periods 1 through 13.
In this example, assume employees in Finance earn $4,000, where tax is defined as Percent of Salary, with a Threshold Scope of Monthly and three rate tiers:
Their tax rate is 12% for the first 1,000 monthly compensation, 20% between 1,000 and 3,000 earned, and 30% between 3,000 and 5,000.