Calculation

Use this tab to specify how the value of the selected payroll code is calculated.

The fields displayed on this tab vary depending on the type of code you select on the General tab.

The following fields are displayed when the type of code you select on the General tab is Automatic.

Calculation Type

This item defines the initial element upon which the formulae is based and is one of the following:

  • The annual salary on the employee’s HR record
  • The units of another payroll code
  • The value of another payroll code
  • The total units of a group of payroll codes
  • The value of a group of payroll codes
  • The value of this payroll code (default value)

Calculation Code

This field is available only when Calculation Type refers to the qualities of another payroll code. When referring to the units or value of another payroll code, the system  inspects the recurring payroll entries of the HR record for the employee for the required combination. This includes “SELECT FROM” entry types. The system does not review any entries in the working file for the current period. If there is more than one entry present, the units or values are accumulated before being used in the formulae.

If you set Calculation Type to Salary, this field is not available.

Operator

Select an operator from the drop-down list.

This is an arithmetic operator to be used in the calculation that uses the values described above and below. If you select Divide By, Multiply, Subtract,or Add, the value you specify in Value is used as the secondary element required in the formulae. If you select Percentage, Value refers to the percentage to be implemented. If you select Table, the Value field is not required because the Tables tab is used as the mechanism to establish the calculation result by consulting the table with the value determined above.

Value

When used with an Automatic type of payroll code, this item is the value or percentage used with the operator and primary elements described above.

Use WTE

You should consider selecting this check box only when Calculation Type is set to Default Value.

It is possible to use this function to create a payroll code to make payments to employees based on a default value for full-time employees, and then to apportion the payment to other employees based on their whole time equivalent. The payroll code must be defined as an Automatic payment code, and the value to be paid to full-time employees must be entered as the default value on the Defaults tab. When you select this check box, it instructs the payroll calculation to apportion the value to part-time employees based on each employee’s whole time equivalent.

Payslip Side

Optional. Select the side of the payslip (Payment or Deduction) the pay element appears on.

In exceptional circumstances, you might want to print a deduction not as a positive value in the correct column of a payslip, but as a negative value in the payments column. Similarly, a payment can appear as a negative entry in the deduction column although this is a more rare occurrence.

The following fields are displayed when the type of code you select on the General tab is Rate.

Calculation Type

This identifier describes the method of determining the rate to be used and four options are available:

Hourly WTE (Whole Time Equivalent)

Reference is made to the terms and conditions of the employment record for the employee to obtain:

  • Annual Salary (A)
  • Weeks Worked Per Year (B)
  • Hours Worked Per Week (C)

These values are then applied using the following simple calculation:

Rate = A / ( B * C )

If any of the described elements are not provided, it is likely a zero rate value will be returned.

Daily WTE (Whole Time Equivalent)

Reference is made to the terms and conditions of the employment record for the employee to obtain:

  • Annual Salary (A)
  • Weeks Worked Per Year (B)

The employment calendars are then consulted; either the global system calendar or the more localised calendars attached to the personnel categories, to establish how many days are worked each week (C).

These values are then applied using the following simple calculation:

Rate = A / ( B * C )

If any of the described elements are not provided, it is likely a zero rate value will be returned.

As Entered

Three potential scenarios are reviewed to determine the required rate, which in summary are:

  • Combination of employee and payroll code
  • Combination of cost centre and payroll code
  • Default rate in the payroll code definition

Firstly, the recurring entries for the employee are examined from the HR record to locate any combination defined for the selected payroll code. This may harbour a refined rate that, if located, is used.

If stage 1 above fails, the cost centre definition is checked for a similar combination of cost centre and payroll code to locate a unique rate for that combination of elements.

If both of the previous stages fail, the default rate defined on the Defaults tab is used. It is possible that no rate is provided and a zero value is still returned.

Employee Rate

In this scenario, it is expected that the required pay rate is held against another payroll code defined in the recurring Items of the HR record for the employee, as described in the As Entered option. When you select Employee Rate, you can select another rate-based payroll code from the Calculation Code field. Otherwise, the Calculation Code field is unavailable, because it is not applicable to the other options described above.

Factor

This is an optional factor to be applied to a rate obtained from Calculation Type. For example, when you define overtime rates, you can set a factor of 1.5 for time and a half, and 2 for double time. To define different overtime rates, you set up a payroll code for each rate — each overtime payment would have a similar definition, but the factor assigned would vary.

Payslip Side

Optional. Select the side of the payslip (Payment or Deduction) the pay element appears on.

In exceptional circumstances, you might want to print a deduction not as a positive value in the correct column of a payslip, but as a negative value in the payments column. Similarly, a payment can appear as a negative entry in the deduction column, although this is rare.

For information about the details you enter on the GEN tab, click here.