OraclePayroll Earnings & Deductions

Student Guide
D60573GC10
Edition 1.0
December 2009
D66014
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R12.x Oracle Payroll

Fundamentals: Earnings and
Deductions
Copyright 2009, 2010, Oracle and/or its affiliates. All rights reserved.
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Author
Pragya Singh Nair
Technical Contributors and Reviewers
Prasad Mutnuru
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Introduction to Payroll Earnings and Deductions ........................................................................................1-1

Introduction to Payroll Earnings and Deductions..........................................................................................1-3
Objectives ......................................................................................................................................................1-4
Earnings and Deductions - Structure .............................................................................................................1-5
Earnings and Deductions Structure.............................................................................................................1-9
Earnings.........................................................................................................................................................1-11
Deductions.....................................................................................................................................................1-12
Gross and Net Earnings .................................................................................................................................1-13
Elements ........................................................................................................................................................1-14
Predefined Elements ......................................................................................................................................1-16
Element Templates ........................................................................................................................................1-17
Global HR and Payroll Extracts ....................................................................................................................1-18
Balances.........................................................................................................................................................1-19
Formulas ........................................................................................................................................................1-20
Processing......................................................................................................................................................1-21
Quiz ...............................................................................................................................................................1-22
Summary........................................................................................................................................................1-26
Element Setup for Payroll...............................................................................................................................2-1
Element Setup for Payroll..............................................................................................................................2-3
Objectives ......................................................................................................................................................2-4
Topics ............................................................................................................................................................2-5
Payroll Balances Overview............................................................................................................................2-6
Balances.........................................................................................................................................................2-7
Example of a Defined Balance ......................................................................................................................2-8
Predefined Balance Dimensions ....................................................................................................................2-9
Balance Dimensions in Formula....................................................................................................................2-10
Balance Attributes .........................................................................................................................................2-11
Balance Categories ........................................................................................................................................2-12
Base Balances................................................................................................................................................2-13
Defining Balances Feeds ...............................................................................................................................2-14
Defining Feeds Using Element Classifications..............................................................................................2-15
Creating Individual Balance Feeds ................................................................................................................2-16
Defining Balance Feeds.................................................................................................................................2-17
Quiz ...............................................................................................................................................................2-18
Writing Formulas ............................................................................................................................................3-1
Writing Formulas...........................................................................................................................................3-3
Types of Formulas .........................................................................................................................................3-4
Writing Formulas...........................................................................................................................................3-5
Formula Components ....................................................................................................................................3-6
Component - Input Values From Elements ...................................................................................................3-7
Component - Functions .................................................................................................................................3-8
Using the ROUND Function .........................................................................................................................3-9
Component - Statements................................................................................................................................3-10
Aliases ...........................................................................................................................................................3-11
Setting Default Values...................................................................................................................................3-12
Checking Default Values...............................................................................................................................3-13
Inputs Statement ............................................................................................................................................3-14
The Return Statement ....................................................................................................................................3-15
IF Statement...................................................................................................................................................3-16
Component - Comments ................................................................................................................................3-17
Component - Variables..................................................................................................................................3-18
Copyright Oracle 2009. All rights reserved.
R12.x Oracle Payroll Fundamentals: Earnings and Deductions Table of Contents
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Table of Contents
Database Items...............................................................................................................................................3-19
Easy Access to Data in Formulas ..................................................................................................................3-20
Global Values ................................................................................................................................................3-21
Local Variables..............................................................................................................................................3-22
Component - Constants .................................................................................................................................3-23
Component - Expressions and Arithmetic Operators ....................................................................................3-25
Quiz ...............................................................................................................................................................3-26
Controlling the Frequency of Processing an Element ..................................................................................5-1

Controlling the Frequency of Processing an Element....................................................................................5-3
Overview .......................................................................................................................................................5-4
Frequency Rules ............................................................................................................................................5-5
Skip Rule Formulas .......................................................................................................................................5-7
Skip Rule Formula Example..........................................................................................................................5-8
Quiz ...............................................................................................................................................................5-9
Advance Pay.....................................................................................................................................................6-1
Advance Pay..................................................................................................................................................6-3
Advance Pay Process.....................................................................................................................................6-4
Advance Pay Example...................................................................................................................................6-5
Advance Pay Process.....................................................................................................................................6-7
Advance Pay By Element Process .................................................................................................................6-8
Advance Pay Events ......................................................................................................................................6-9
Absence Element Inputs ................................................................................................................................6-10
Element Description ......................................................................................................................................6-11
Information Elements ....................................................................................................................................6-12
Direct Payment Elements ..............................................................................................................................6-13
Processing Advance Pay................................................................................................................................6-14
Advance Pay for a Batch ...............................................................................................................................6-15
Processing Advanced Pay by Element...........................................................................................................6-16
Quiz ...............................................................................................................................................................6-17
Retro Pay..........................................................................................................................................................7-1
RetroPay ........................................................................................................................................................7-3
RetroPay Process ...........................................................................................................................................7-4
How RetroPay Works: Balances ...................................................................................................................7-5
How RetroPay Works: Elements ...................................................................................................................7-6
How RetroPay Works: Element Entries ........................................................................................................7-7
Types of RetroPay .........................................................................................................................................7-8
Enhanced RetroPay Example ........................................................................................................................7-9
Features of Enhanced RetroPay.....................................................................................................................7-11
Setting Up RetroPay by Element...................................................................................................................7-13
Retroactive Element Definition .....................................................................................................................7-15
Setting Up Enhanced RetroPay .....................................................................................................................7-16
Running Enhanced RetroPay.........................................................................................................................7-17
Costing RetroPay Results ..............................................................................................................................7-18
RetroCosting..................................................................................................................................................7-19
Quiz ...............................................................................................................................................................7-20
Net-to-Gross and Proration ............................................................................................................................8-1
Net-to-Gross and Proration............................................................................................................................8-3
Net-to-Gross ..................................................................................................................................................8-4
Creating a Net-to-Gross Earnings Type (U.S./CA) .......................................................................................8-5
ii
Defining Formula Results and Processing Rules ..........................................................................................4-1

Defining Formula Results and Processing Rules...........................................................................................4-3
Formula Processing Rules .............................................................................................................................4-5
Formula Result Types....................................................................................................................................4-7
Quiz ...............................................................................................................................................................4-9
Element Design Wizard...................................................................................................................................9-1

Element Design Wizard.................................................................................................................................9-3
Generating Earnings and Deductions Elements.............................................................................................9-4
Element Design Wizard.................................................................................................................................9-5
Element Design Wizard: Process Flow .........................................................................................................9-7
Quiz ...............................................................................................................................................................9-8
Managing Third Party Payments...................................................................................................................10-1
Managing Third-Party Payments ...................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Topics ............................................................................................................................................................10-5
Third-Party Payments Overview ...................................................................................................................10-6
Third-Party Payments ....................................................................................................................................10-7
Entering Third Party-Payments for an Employee..........................................................................................10-8
Payee: Organization.......................................................................................................................................10-9
Payee: Contacts .............................................................................................................................................10-10
Recording Third-Party Payments for an Employee .......................................................................................10-11
Managing Deductions....................................................................................................................................10-12
Third Party Processing Priorities ...................................................................................................................10-13
Protected Earnings.........................................................................................................................................10-14
Producing Checks/Cheques for Third-Party Payments..................................................................................10-15
Producing Checks/Cheques for Third- Party Payments.................................................................................10-16
Quiz ...............................................................................................................................................................10-17
Summary........................................................................................................................................................10-20
iii
Creating a Net-to-Gross Earnings Type (U.K.) .............................................................................................8-6

Net-to-Gross Processing Excluding Balances ...............................................................................................8-7
Proration ........................................................................................................................................................8-8
Proration Setup ..............................................................................................................................................8-9
Historic Rates (U.K.) .....................................................................................................................................8-10
Rate Type Information...................................................................................................................................8-11
Element Attribution Information ...................................................................................................................8-12
Contract Types Table.....................................................................................................................................8-14
Quiz ...............................................................................................................................................................8-15
Summary........................................................................................................................................................8-20

Preface
Profile
Before You Begin This Course
Working experience with Oracle Applications
Prerequisites
There are no prerequisites for this course.
How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.
v
Related Publications
Oracle Publications
Title
Oracle Payroll Processing Management Guide
Part Number
E13514-03
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Read-me files
International Oracle Users Group (IOUG) articles
Oracle Magazine
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x
Chapter 1
Copyright Oracle, 2009. All rights reserved.
Introduction to Payroll Earnings and Deductions
Chapter
1 - Page 1 ONLY. COPYING eKIT MATERIALS FROM THIS
THESE eKIT MATERIALS ARE FOR YOUR USE IN THIS
CLASSROOM
Introduction to Payroll
Earnings and Deductions

Chapter
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Chapter
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Objectives
This introduction additionally details at a high level the topics contained in the Payroll
Earnings and Deductions module.
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Objectives
Earnings and Deductions Structure

In this class, you will learn about:
1. Earnings, initiate earnings and earnings types.
2. Deductions, initiating deductions and pre-tax deductions.
3. Payroll Balances and how to define payroll balances.
4. How to write payroll formulas using the Formula window and the FastFormula Assistant.
5. Defining Formula Results and Processing Rules
6. How to control the frequency of processing an element, defining frequency rules, and
writing a skip rule formula.
7. Advance pay and marking an element for advance pay.
8. Retro pay and setting up enhanced retro pay.
9. Setting up net to gross processing (UK), proration, and historic rates (UK).
10. Using the element design wizard to set up pretax deductions for iterative processing.
11. Set up and use deduction templates and professional body memberships (UK).
Chapter
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Earnings and Deductions - Structure
12. Set up Pretax Deductions for Iterative Processing (UK).

13. Manage Third-Party Payments.
14. Wage Attachments (US and Canada).
15. Court Orders and Arrestments (UK).
16. Set up Pension Providers, Types, and Schemes.
17. Deferred Compensation Plans and Tax-sheltered Annuities.
18. State Retirement System Plans.
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Chapter
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Earnings and Deductions - Structure

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Earnings
The four ways of calculating earnings are:
RetroPay
- You use RetroPay to ensure that your payroll run for the current period reflects any
backdated payments or deductions.
Advance Pay
- Advance Pay enables you to pay an amount to employees for holiday or other
events scheduled for a later period than the current pay period.
Net-to-Gross
- Net-to-gross processing enables you to calculate the gross amount you need to pay
to meet a fixed net amount, for example a bonus.
Proration
- Proration enables you to calculate proportionate earnings amounts whenever payroll
relevant data is changed during a payroll period because of, for example, a pay rate
change.
Chapter
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Earnings
Deductions
The five categories of deduction are:
Proration: Enables you to calculate proportionate earnings amounts whenever payroll
relevant data is changed during a payroll period because of, for example, a change of
allowance or deduction
Savings and Retirement: Most enterprises provide plans that enable employees to save for
their retirement. Your company may help too by matching a portion of the amount
employees invest.
Third Party Payments: Third Party Payments enable you to make both single and
recurring deductions from employees salaries for involuntary deductions incurred by
court debts or fines, and to specify either corporate bodies or individuals as payees.
Arrears Management: If an employee has insufficient funds to pay the full installment of
a deduction, you can use Arrears Management to determine how Oracle Payroll
calculates a partial payment and adjusts future payments.
Benefits Premiums: You can set up deductions to deduct the premiums that employees
have to pay to be eligible for certain benefits.
Chapter
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Deductions
Gross and Net Earnings
Gross earnings are made up of several components such as Salary, Bonus, and
Allowances and you create elements to represent these values.
You derive net earnings by subtracting the deductions from gross earnings.
For example, you could define an element called Wage for hourly paid employees. You
classify it in the predefined classification Earnings which determines when it is processed
in the payroll and what balances it feeds. The deductions that you similarly define are
deducted when you process the payroll and they can also feed balances.
Chapter
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Gross and Net Earnings
Elements
Elements are the components in the calculation of employee pay. Each element represents a
compensation or benefit type, such as salary, wages, stock purchase plans, and pension
contributions. Elements can have user-defined names, types, and values. You can use elements
to:
Capture any type of information
Define eligibility based on assignment criteria
Provide online or batch entry options
Using the diagram above as an example, consider the following values:
Element is wage
Classification is earnings
Balance is taxable earnings
Input Value is hours worked
Formula is wage=hours_worked * hourly rate
Chapter
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Elements
Processing Rules are a processing frequency of weekly

Eligibility Rules are employees on weekly payroll
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Predefined Elements
A different set of predefined elements is supplied for each legislation, to meet its particular
legislative requirements for such areas as court orders, sick pay or vacation pay. These are
automatically installed, along with formulas and balances required for processing. They simply
need to be linked to employees or assignments to identify eligibility and costing requirements.
In some legislations, other elements are predefined to enable rapid implementation. These
elements represent common requirements in those legislations for areas such as regular salary
or shift pay. However, you dont have to use them. You can use them as templates for creating
your own elements to more closely match your business requirements, if necessary.
Refer to the User Guides or online help for full details of all predefined elements.
Chapter
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Predefined Elements
Element Templates
In addition to predefined elements, in some legislations you can generate elements from
templates to meet common requirements. On the template window, you specify a few basic
rules (such as selecting a calculation method) and Oracle Payroll generates the elements,
formulas, and balances you require. For example, the US and Canadian legislations include
Earnings and Deductions windows for this purpose. The UK legislation contains Absence and
Pension Scheme windows amongst others. These templates enable you to easily set up sick pay
and maternity pay or the pension providers, pension types and pension schemes for your
employees.
Chapter
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Element Templates
Global HR and Payroll Extracts

Global HR and Payroll extracts can report on any earnings, deductions or information
elements. For example, you can use a Full Extract to report on everyone who has been paid a
bonus or contributed to a pension and use a Changes Extract to report on changes to personal
or contribution data.
Chapter
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Global HR and Payroll Extracts
Balances
Balances show the positive or negative accumulation of particular values over periods of time.
The pay values of elements processed in the payroll run feed the balance value.
Chapter
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Balances
Formulas
Elements are processed during payroll runs according to business rules for each element. Many
of these rules are defined in formulas written using Oracle FastFormula. Payroll formulas for
each element let you calculate the actual payments or deductions that are made during each
payroll run. The processed results for each element are called Run Results. The Run Results
then become balance feeds for different balances. Some balance feeds are predefined to feed
required statutory balances and you can also create your own balance feeds to your own userdefined balances.
Formulas obtain some of the required data from entries to their elements input values. The
formulas also obtain information from database items. Much of the information in the Oracle
HRMS database, including extensive information on employees and assignments, is available
to formulas as database items.
Oracle Payroll has predefined formulas specific to your legislation such as calculations
required for employee tax withholding and employer taxes.
Chapter
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Formulas
Processing
Element entries are processed by formulas during the payroll run. The payroll run may use a
different formula depending on the assignment statusfor example, a different formula for
employees on sabbatical leave. The formula can produce several outputs:
A direct result to update balances
Messages for information and control
Other results that update, stop, or change the sub-priority of other element entries
Chapter
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Processing
Quiz
Answer: 1
Chapter
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Quiz
Answer: 2
Chapter
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Quiz
Answer: 1
Chapter
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Quiz
Answer: 2
Chapter
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Summary
Please refer to the additional guide for labs and/or demos for this lesson.
Chapter
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Summary
Chapter 2
Element Setup for Payroll
Chapter
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Chapter
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Chapter
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Objectives
Chapter
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Topics
Chapter
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Payroll Balances Overview

Balances show the accumulation of values over a period of time. An important feature of
balances in Oracle Payroll is that they are rule-based calculations. Each local payroll can
have predefined balances and rules which simplifies managing the balances for legislative
reporting purposes. When you add or adjust source values, the application adjusts all related
balances. You can also define your own balances and rules to suit your requirements.
Chapter
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Payroll Balances Overview
Balances
Two distinct rules determine a balance value. Balance Feeds control the type of values to
include + or and Balance Dimensions control the number of values to include.
Balances accumulate the results from processing elements or input values. When you define a
balance, you define which elements and input values feed the balance. You can select primary
or secondary classifications to include the pay value from all elements within that
classification. For example, Earnings or Bonusable. You can also select individual elements
to include specific Pay or Input values.
The Balance Dimension Rules break down into two specific areas:
Timespan
- This is either predefined periods such as run, period, quarter, year or user-defined
periods such as hire or rolling-year.
Level
- Either person or assignment.
Chapter
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Balances
Example of a Defined Balance
Chapter
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Predefined Balance Dimensions

The balance dimensions follow local legislative rules, which either sum the balance since the
start of the tax year or sum the balance since a transfer from a different tax district. You cannot
change predefined balances or dimensions.
Chapter
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Predefined Balance Dimensions
Balance Dimensions in Formula

When you define a balance, the application automatically generates a database item for each
dimension so you can use it in payroll formulas.
Chapter
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Balance Dimensions in Formula
Balance Attributes
Balance attributes enable you to identify which balances should be used in which reports.
Attribute definitions must be defined prior to creating an attribute, which is the intersection
entity between defined balances and attribute definitions. For example, a balance attribute
could be SOE Earnings Year to Date.
Attributes can be predefined by localizations, created as a result of predefined defaults or be
user defined.
Chapter
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Balance Attributes
Balance Categories
As with element classifications, balance categories are assigned to balances as appropriate.
Chapter
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Balance Categories
Base Balances
A Base balance enables relationships to be implied between two balances. This relationship
can be relied upon when processing and reporting. For example, Loan Repayment could be
the base balance for Loan Repayment Arrears.
Chapter
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Base Balances
Defining Balances Feeds

You can select elements to feed a balance in three ways:
Select a primary classification. The run results of all elements in the classification feed
the balance.
Select a secondary classification. You choose which elements from a primary
classification (such as Earnings) are to feed the balance by giving these elements a
secondary classification. It is the run results of the elements that feed the balance.
Select an individual element. You can select either the run result or an input value to feed
the balance. The input value must have the same unit of measure (such as hours or
number) as the balance.
You can choose any number of classifications (either primary or secondary) or any number of
elements to feed a balance, however you cannot use a mixture of classifications and individual
elements to feed a balance.
Chapter
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Defining Balances Feeds
Defining Feeds Using Element Classifications

If the Earnings classification feeds a balance, then all elements with Earnings as their primary
classification feed this balance automatically.
Chapter
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Defining Feeds Using Element Classifications
Creating Individual Balance Feeds

A single element can feed any number of balances. If you choose to feed a balance using an
element, you can either select the run result or an input value to feed the balance.
Chapter
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Creating Individual Balance Feeds
Defining Balance Feeds

Both the Element and Balance windows have buttons that open a Balance Feeds window. You
use the Element window if you want to feed an element to one or more balances that individual
elements feed. You use the Balance window if you want to feed a balance from either
classifications or individual elements.
A primary balance is one that a single element feeds into. You can use this type of balance if
no balance feeds exist for it, with the exception of the balance initialisation feeds. Oracle
HRMS automatically creates the associated feed when you create a primary balance.
Chapter
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Defining Balance Feeds
Quiz
Answer: 1
Chapter
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Quiz
Answer: 1
Chapter
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Quiz
Answers: 1, 3
Chapter
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Chapter 3
Writing Formulas
Chapter
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Writing Formulas

Writing Formulas
Chapter
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Writing Formulas
Writing Formulas
Chapter
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Types of Formulas
Writing Formulas
Chapter
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Writing Formulas
Formulas are generic expressions of calculations or comparisons you want to repeat with
different input values. They take input from a window, a database, or a process, such as a
payroll run and they return values or messages. Oracle Fast Formula provides a simple
vocabulary and syntax to let you write formulas using English words and simple mathematical
functions.
Writing Formulas
Chapter
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Writing Formulas
Formula Components
Different components make up a formula. These can include assignment statements, different
types of input, and expressions.
Writing Formulas
Chapter
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Formula Components
Component - Input Values From Elements

Input values are the most efficient way to access the input values of the element with which
you associate the formula.
Some examples of INPUTS are:
Inputs are Hours, Rate, Rate_Code (text)
Inputs are Amount, Percentage, Jurisdiction (text)
Inputs are Start_Date (date), End_date (date)
Inputs are person_id to easily access person-related information in formula functions
If the value is not a numeric, that is money, integer, number, for example, then you must
declare the input value type (date or text). Identify the inputs required for the calculation and
where they come from.
Writing Formulas
Chapter
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Component - Input Values From Elements
Component - Functions
Functions manipulate data in various ways. Some of the types of functions available in
FastFormulas are:
Text Functions
Numeric Functions
Date Functions
Data Conversion Functions
Functions to Get Values from Tables
Functions for Accrual Type Formulas
Functions to Call a Formula
Functions to Set and Get Globals (SQL*Plus)
Writing Formulas
Chapter
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Component - Functions
Using the ROUND Function

Here is an example using the ROUND function to round a calculated value to 2 decimal places.
Writing Formulas
Chapter
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Using the ROUND Function
Component - Statements
Statements are instructions that Oracle Fast Formula carries out. You can use the following six
types of statement:
Alias Statement (ALIAS varname1 AS varname2)
Default Statement (DEFAULT FOR varname2 IS constant)
Inputs Statement (INPUTS ARE bonus, start_date (date))
Assignment Statement (varname1 = expression)
If Then [Else] Statement (IF expression1 THEN statement
[ELSE statement])
Return Statement (RETURN variable1, variable2)
Writing Formulas
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Component - Statements
Aliases
The use of aliases makes a formula easier to read. You can use aliases for global values and
database items. Using an alias is more efficient than assigning a database item or global value
to a local variable with a short name. You can use aliases in all the statements except the
default statement where you must use the full database item name.
Writing Formulas
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Aliases
Setting Default Values
Writing Formulas
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Checking Default Values

You can check if the value was defaulted in processing by using the If.then (..) else (..)
statement and raising an error message.
Writing Formulas
Chapter
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Checking Default Values
Inputs Statement
When a formula requires more than one input value from the element, the statement should be:
INPUTS ARE input_value1, input_value2, and so on. In the above example, assume you pay
some salaried employees using a recurring element called Salary. The salary element has an
input value called Amount. To calculate the monthly salary payment you need a formula that
divides the input value into twelve.
Writing Formulas
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Inputs Statement
The Return Statement

In the formula, you define:
The inputs to the formula
The calculation to execute
Any conditions using If.. Then() Else() statements
The values to return
Writing Formulas
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The Return Statement
IF Statement
Writing Formulas
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Component - Comments
Writing Formulas
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Component - Variables
You use variables in a formula to access information. The data type of a variable determines
the type of information the variable holds and can either be numeric, text, or date.
Writing Formulas
Chapter
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Component - Variables
Database Items
Database items exist in the application database and have a label, hidden from users, that the
application uses to find the data. Two types of database items exist:
Static database items: These are predefined and include standard types of information,
such as sex, birth date, and work location of an employee, or the start and end dates of a
payroll period.
Dynamic database items: The application generates these items from your definition of
elements, balances, absence types, grade rates and pay scale rates, and flexfield segments.
Writing Formulas
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Database Items
Easy Access to Data in Formulas

FastFormula uses information in the FastFormula Application Dictionary when it runs a
formula that refers to a database item. The Dictionary contains the information that
FastFormula requires to generate the SQL and PL/SQL error checking code that extracts the
database item.
Some database items require certain contexts. The Database Items window displays these only
when you are creating a formula type that provides these contexts. For example, database items
that require the Assignment ID display when you create an Oracle Payroll formula. This is
because the assignment context is always available when the Payroll run calls the formulas.
Writing Formulas
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Easy Access to Data in Formulas
Global Values
Global values are datetracked so you can make effective changes ahead of time. You can only
change the value using the Globals window and values are datetracked.
They are independent values that store reference type data for the enterprise. For example, you
might want to reference a contribution limit value for employer contributions.
Writing Formulas
Chapter
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Global Values
Local Variables
Writing Formulas
Chapter
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Component - Constants
Numeric Constants:
Enter numeric constants without quotes. Precede negative numbers with a minus sign (-).
Numbers may have a decimal component after a decimal point. Do not use exponents and
floating point (scientific) notations. Do not use commas or spaces in a number. So, for
example, you cannot use 10,000 or 10 000.00 as numeric constants.
Text Constants:
Enclose text constants in single quotes. They may contain spaces. You can represent the single
quote character in a text constant by writing it twice (''). Note that this is not the same as the
double quote (").
Date Constants:
Date constants contain a date. Enclose dates in single quotes and follow immediately with the
word date, in brackets. Use the format YYYY-MON-DD HH24:MI:SS or DD-MON-YYYY.
Writing Formulas
Chapter
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Component - Constants
We recommend that you use the first format if you want to compile the formula under different
language settings.
Writing Formulas
Chapter
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Component Expressions and Arithmetic Operators

Please refer to the additional guide for labs and/or demos for this lesson
Writing Formulas
Chapter
CLASSROOM
Component - Expressions and Arithmetic Operators
Quiz
Answer: 1
Writing Formulas
Chapter
CLASSROOM
Quiz
Answer: 1
Writing Formulas
Chapter
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Quiz
Answer: 2
Writing Formulas
Chapter
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Chapter 4
Defining Formula Results and Processing Rules
Chapter
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Defining Formula Results and

Processing Rules

Chapter
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Chapter
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Formula Processing Rules

Elements and formulas are associated when you define Processing Rules for the element. In
other words, what happens to the results returned from the formula. You can have one or more
than one Processing Rule for each element and you can have one or more results for each
processing rule:
The direct result is the Pay Value
Update or stop entries
Return warning, error, or information messages
Chapter
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Chapter
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Formula Result Types
Chapter
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Please refer to the additional guide for labs and/or demos for this lesson
Chapter
CLASSROOM
Quiz
Answer: 2
Chapter
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Quiz
Answers: 1, 2, 4, 6
Chapter
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Quiz
Answer: 2
Chapter
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Chapter
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Chapter 5
Controlling the Frequency of Processing an Element
Chapter
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Controlling the Frequency of

Processing an Element

Chapter
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Chapter
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Overview
The two types of rules you can use to control when an element is included in a payroll run are:
Frequency Rules
- Define frequency rules for recurring types of element where you want to process
them at periodic intervals.
Skip Rules
- Define skip rules if you want conditional processing of any element using a formula
to determine when to process and when to skip.
Chapter
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Overview
Frequency Rules
Chapter
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Frequency Rules
Once or twice, yearly deductions can be processed on monthly, quarterly or semi annual
payrolls. The frequency rules for these periods refer to periods within a year instead of within a
month. You can define these deductions as nonrecurring and use BEE to make the entries as
required.
Chapter
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Frequency Rules
Skip Rule Formulas

In the US and Canada, skip rules are usually generated along with elements, formulas, and
balances, when you initiate earnings and deductions using the Earnings or Deductions
windows.
Chapter
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Skip Rule Formulas
Skip Rule Formula Example

This example is a formula that does not process a union fees deduction when the annual
balance for the union fees is greater than 10000.
Chapter
CLASSROOM
Skip Rule Formula Example
Quiz
Answer: 2
Chapter
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Quiz
Answer: 1
Chapter
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Quiz
Answer: 2
Chapter
CLASSROOM

Chapter
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Chapter 6
Advance Pay
Chapter
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Advance Pay

Advance Pay
Chapter
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Advance Pay
Advance Pay
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Advance Pay Process

Advance Pay enables you to pay an aggregated amount to employees for holiday or other
events scheduled in advance of the current pay period. For example, a factory shutdown where
the payroll department also closes. This typically applies to weekly or biweekly paid
employees or shift workers. In these instances, you can calculate and deduct taxes as if
earned in future pay periods even if different tax rules apply. You can also ensure that any
changes to pay or benefits in their absence are reflected when they return to work. Oracle
Advance Pay also checks the overall results when an employee returns to work as payments
received in advance are likely to cross over upper and lower tax bands and distort taxed
liabilities.
Advance Pay
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Advance Pay Process
Advance Pay Example

Here is an example to illustrate a simple case:
A weekly paid employee is going on leave in weeks 24 and 25 is entitled to pay for that time in
week 23.
In week 23 the Advance Pay process calculates the correct Net Pay net of tax and other
deductions, for weeks 24 and 25 and creates a non-taxable payment of 150 in week 23.
The overall effect should be to pay the employee 225 in week 23 and 0 in weeks 24 and 25.
Note: If the person is a timecard-based employee and the only pay is based on timecard data,
you also need to make sure you have default timecards entered for weeks 24 and 25 to generate
pay.
Advance Pay
Chapter
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Advance Pay Example
Advance Pay Example

Oracle Payroll manages the overall accuracy of the process by creating recovery elements in
each pay period. This mechanism enables continued processing of the employee to manage
personal or other changes.
The net payment must equal the advanced payment each period. Therefore, when Oracle
Payroll processes the employee in weeks 24 and 25 the net pay should be 75. If nothing has
changed then the recovery element zeros out net for the period and the employee is not paid.
The Advance Pay process internally runs the Gross-to-Net processes to derive the net result for
each pay period.
If a difference in net then additional processing triggers in the return to work period with a
deferred payment or recovery.
However, in normal circumstances the person returns to work. The clear up element identifies
no changes and the person receives regular pay for the period.
Advance Pay
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Advance Pay Example
Advance Pay Process

The process does not generate entries where the amount calculated is zero or negative.
Messages are generated for all assignments where this is the case and you can view these in the
the Payroll Message Report.
The following information displays when the Advance Pay process successfully completes:
The process check box is selected.
The amount of the advance is displayed.
If you select the Defer checkbox, the Deferred Payments region shows the period for which
payments to the assignment are deferred to.
Note: Processing differs for Arrears and Non-arrears payrolls.
Arrears payrolls
The process only performs runs in memory for periods containing an entry for the element.
Non-arrears payrolls
The process calculates the current period and the advanced periods.
Advance Pay
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Advance Pay Process
Advance Pay By Element Process

Some localizations require an advance pay method which does not aggregate the payments
over the leave period but actually calculates a breakdown of the net advance amount into
separate amounts for each pay and deduction element for each payroll period within the time
period specified. Advanced Pay by Element meets this requirement. It can be used instead of or
as well as Advance Pay, but the two should not be used for overlapping pay periods.
The Advanced Pay tab in the Element window that you use to control the advance pay
elements appears if the ADV_CLEARUP legislation rule is seeded within the
pay_legislation_rules.
Similarly to the Advanced Pay process, Advanced Pay by Element manages the overall
accuracy of the process by creating recovery elements in each pay period. These elements
recover the exact amount advanced for that week and not an aggregated amount. Continued
processing of the employee to manage personal or other changes still takes place and so do the
checks for difference in net for additional processing in the return to work period.
Advance Pay
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Advance Pay By Element Process
Advance Pay Events

If the event (advance leave booking) applies to one assignment, you use the Advance Pay
window from the assignment. If the event applies to many assignments, then you use the
Advance Pay Batch Setup window that can automatically create advance pay details for an
assignment set.
Advance Pay
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Advance Pay Events
Absence Element Inputs

The Absence elements that you use to record a period of leave that is due payment in advance
requires the following inputs:
Number of hours/days leave due to be taken
Absence Start Date
Absence End Date
Pay Date (this is the end date of the period in which the advance payment is to be paid)
Advance Override (this is used to indicate that an absence should not be treated as
advance payable Y/N values)
Advance Defer (if an employee receives any additional payments while on leave, the
payments can be deferred until the employee returns to work Y/N values)
Advance Pay
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Absence Element Inputs
Element Description
All elements involved in the advance pay process need to have certain attributions marked up
on the Element Window according to their advance pay processing requirements. The choices
available are:
Mark as Advance Pay Indicator this attribute determines if leave booked using this
specific absence type is eligible for advance pay or not.
Include as an Advance Element the Advance Pay by Element process uses this
attribute. It highlights the element as an element to be processed in advance.
Deduct Advance Amount this attribute determines whether the element that has been
paid in advance needs to be deducted in the period of the leave booking.
Process Advance Entry in Run Payroll uses this flag to determine if the entry should be
processed in the payroll when you run Advance Pay.
Advance Pay
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Element Description
Information Elements
The advance pay process automatically generates information type element entries in each time
period to identify start and end dates for the event period of payment and each advance pay
period:
Advance Period entry in current pay period has two entry values : Start and End Dates
Advance Indicator entry in each advance pay period holds two status inputs:
- One to indicate Period is advanced
- One to defer any outstanding payments during the event period. If payment is
deferred, then the application carries forward the pay to return period. If payment is
not deferred, the application makes additional payment during the absence of the
employee. Typical use would be to defer payment until employee returns to work.
A key requirement for all predefined elements is to set up links to enable entries. You also
need to consider any special requirements for costing advance payments and enter cost
information at link or entry level.
Advance Pay
Chapter
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Information Elements
Direct Payment Elements

The advance pay process automatically generates the following direct payment element entries:
Advance Payment: Holds details of the pay amount advanced
Advance Recovery: Oracle HRMS generates recovery elements in each period to recover
advanced payment amount.
Advance Clear Up: This is generated in the expected return to work period. If the
employee is overpaid during, or for the period of leave, then this amount is recovered
automatically in the pay period following the advance pay period.
Deferred Payments: When further payments are entered for the employee during the
absence period (for example, a bonus), these can be paid either to the employee in that
period or they can be deferred for payment in the period following the advance pay
period.
You also need to consider any special requirements for costing advance payments and enter
cost information at link or entry level.
Advance Pay
Chapter
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Direct Payment Elements
Processing Advance Pay

The basic steps to process Advance Pay are:
If required, set up an assignment set.
Using individual events or batch processes, enter the Advance Period information.
Run the Advance Pay Listing to identify assignments with advance pay entries for the
pay period. It also contains the details of advance pay periods for employees due to
receive advance pay.
Run the Advance Pay process.
Run Payroll as normal.
Advance Pay
Chapter
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Processing Advance Pay
Advance Pay for a Batch

Once a batch transfers, you can purge them from the application using the Batch Header
window. If you create and transfer incorrect batches, you can remove them using the BEE
Rollback process.
Advance Pay
Chapter
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Advance Pay for a Batch
Processing Advanced Pay by Element

The four basic steps to processing advance pay by element are:
You must enter advance leave bookings using BEE (Batch Element Entry) so that you
can manually manipulate the extra input values.
You can run the Advance Pay Listing report to highlight any absences that are advance
payable for checking purposes.
Run the Advance Pay by Element process to generate the necessary advance element
entries for the payroll. The effective date for this process should be the last day of the
current processing period and the Advance End Date is the end date of the range of dates
to check for absences.
Complete the normal payroll processes as normal.
Advance Pay
Chapter
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Processing Advanced Pay by Element
Quiz
Answer: 1
Advance Pay
Chapter
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Quiz
Answer: 1
Advance Pay
Chapter
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Quiz
Answer: 1
Advance Pay
Chapter
CLASSROOM

Advance Pay
Chapter
CLASSROOM
Chapter 7
Retro Pay
Chapter
CLASSROOM
Retro Pay

Retro Pay
Chapter
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RetroPay
Retro Pay
Chapter
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RetroPay Process
You may need to manage back-dated or late notifications of changes to payroll processing.
This could be due to retroactive promotion, salary increase, or retroactive settlement of pay
negotiations, for example. Always run RetroPay immediately before you run a payroll, and, for
greatest accuracy, as close to the cut-off date as possible. The cut-off date is the point at which
all data entry for the payroll is complete. You can run RetroPay:
In the next period for a prior period (for example, for a salary raise that was not notified
in time)
For any number of prior periods
Across tax and financial years, but you must choose the right defined-balance to
recalculate RetroPay automatically calculates the difference in results for the duration
you specify.
Retro Pay
Chapter
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RetroPay Process
How RetroPay Works: Balances

RetroPay provides a common solution to meet the needs of all localized payrolls. It is based on
recalculating values in a defined balance. This balance could be a delivered balance (Gross to
Net), an element-specific balance, or a user-defined balance for a set of elements.
Even if the balance does not exist, you can define a balance at any time and then run RetroPay
for that balance. Oracle Payroll does not store all balance values. Instead, it stores the rules
(element feeds and dimensions) for each balance and the run results that make up the balance.
Oracle Payroll does not perform any adjustments to historical balances.
The only permanent results of RetroPay are the entry values in the RetroPay elements.
RetroPay does not make any changes to audited payroll data. RetroPay makes balance
adjustments when the next payroll run processes the RetroPay elements.
Retro Pay
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How RetroPay Works: Balances
How RetroPay Works: Elements

RetroPay brings the differences in the calculations forward to the current pay period as element
entries. Oracle Payroll calculates and makes payments by processing these elements and then
adjusts balances by the results of processing these elements. The classification of the RetroPay
Element is very important in making adjustments to the correct balances. You should use the
Earnings classification to adjust all gross-to-net balances automatically.
Retro Pay
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How RetroPay Works: Elements
How RetroPay Works: Element Entries

Because the element entries are processed as part of the regular pay cycle, you have a second
level of control to manage special earnings or deductions. For example, what do you do if the
result of the RetroPay calculation is a negative earnings amount? You cannot automatically
take the money from the employee, and, even with agreement, the deduction may exceed the
earnings for the current period. Additionally, what do you do if the result is a large earnings
amount and the employee elects to have it paid in several pay periods to optimize tax
deductions?
With Oracles RetroPay solution, you get an element entry, so you control what happens to the
results of retro-processing.
If you feed the RetroPay result to the pay value, Oracle Payroll makes the payment
automatically.
If you feed the result to another input value, then you use a formula to process and pay
the result.
Retro Pay
Chapter
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How RetroPay Works: Element Entries
Types of RetroPay
RetroPay by Aggregate: Combines all adjustments for all the previous processes into one
entry for each balance
RetroPay by Run: Enables you to see how adjustments are distributed across the
individual runs reprocessed. You may have multiple runs in any period.
RetroPay by Element: Enables you to see how adjustments are distributed at the element
entry level
Enhanced RetroPay: Provides a data-driven mechanism and is based on the Retropay by
Element solution, Enables you to identify the reasons for backdated changes to individual
elements, and Reprocesses an assignment from the exact point at which a change
occurred rather than reprocessing the entire pay period because it contains a backdated
change
You can use only one type of RetroPay for a period. You must not reprocess the same data at a
later time using a different method.
Retro Pay
Chapter
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Types of RetroPay
Enhanced RetroPay Example

The employee has a monthly pay of 1000 with a tax rate of 10% for the January-March period.
In April, there is a backdated rise to 1200 effective from January and the tax rate changes to
20%.
Enhanced RetroPay by Element breaks down the payments and allows you to see all backdated
changes at individual element level.
Retro Pay
Chapter
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This example shows a payroll run for the periods January-March. If the current period is April,
and you run a RetroPay from January using the Enhanced RetroPay method, then Oracle
Payroll uses the 10% tax rate when reprocessing the January-March period. For a retrospective
change of salary to 1200, the additional amount of 200 would result in an additional
retrospective tax deduction of 20 for each month, using the 10% rate.
Retro Pay
Chapter
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Features of Enhanced RetroPay
Differentiates between a corrective change (for example, required when you have entered
wrong information) and a deliberate back-dated change (for example, a back-dated pay
change). Different types of change require the application to produce different results
depending on statutory rules. Enhanced RetroPay addresses these requirements
effectively.
Supports your requirement to differentiate between normal and retro earnings, usually
required for legislative reporting, by enabling context overrides. For example, you may
need to report the results of a retro calculation against a different context from the
original payment or deduction, such as reporting of retro calculation of social insurance
contributions against an alternative contribution code.
Introduces retro assignment, which provides an individual start date for each assignment.
This new feature offers better processing efficiency by running the RetroPay process only
from the date when the assignment changed.
Enhanced RetroPay eliminates the unnecessary recalculation of periods prior to a retro
change. In order to recalculate a previous pay run, the existing RetroPay methods delete
Retro Pay
Chapter
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Features of Enhanced RetroPay
the existing results and then reinstate them after the recalculation. However, Enhanced
RetroPay displays the status of the existing results as Deleted and requires only a single
update to the status after the recalculation. This feature reduces the time required to
delete the run results and associated values. Enhanced RetroPay also introduces run
balances that speed up the re-derivation of latest balances within the retro process.
Retro Pay
Chapter
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Setting Up RetroPay by Element

To set up RetroPay by Element, you:
Create the retroactive element. By default, when you process an element in the RetroPay
by Element process, a retroactive non recurring element with the same name as the
original element is created. However, you can create a retroactive element with a
different name from your user-defined elements. The new retroactive element should
have the following attributions Non-recurring and Multiple entries allowed.
If you create a new retroactive element, enter its name in the RetroPay Element field of
the Element Description window for the corresponding element. For example, you could
call the retroactive element Retro Overtime and then the retro amounts do not appear on
the SOE under the same name as the base element Overtime.
Link elements (base and corresponding retro) to your payroll.
Enter retroactive changes using DateTrack.
Create an element set including the elements for retroactive processing, for example, base
elements such as Company Overtime.
Retro Pay
Chapter
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Setting Up RetroPay by Element
Create an assignment set including the assignments to use in the retro comparison.
Retro Pay
Chapter
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Retroactive Element Definition

You use RetroPay by Element to calculate a breakdown of retroactive payments by elements
and time periods in which they were earned. Having separate RetroPay elements for each
element included in the Retropay process means that they appear as separate entries on the pay
advice and can be costed separately.
Retro Pay
Chapter
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Retroactive Element Definition
Setting Up Enhanced RetroPay

The setup steps are as follows:
Set up a RetroPay definition that groups RetroPay components.
Create Retro Components.
Define the RetroPay elements that will receive the retroactive adjustments.
Link the RetroPay elements to the relevant payroll.
Enter retroactive changes using DateTrack.
Retro Pay
Chapter
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Setting Up Enhanced RetroPay
Running Enhanced RetroPay

This slide summarizes the processing options when you run Enhanced RetroPay. The
parameters that you choose are:
Effective Date, which is the date from which you want to begin your RetroPay processing
Payroll
Retro Pay
Chapter
CLASSROOM
Running Enhanced RetroPay
Costing RetroPay Results
Retro Pay
Chapter
CLASSROOM
RetroCosting
The RetroCosting process ensures that the costing information entered for payroll processing is
correct. The process recalculates costing records using current costing information and then
compares these results with the existing costing information.
Retro Pay
Chapter
CLASSROOM
RetroCosting
Quiz
Answer: 2
Retro Pay
Chapter
CLASSROOM
Quiz
Answer: 2
Retro Pay
Chapter
CLASSROOM
Quiz
Answer: 3
Retro Pay
Chapter
CLASSROOM
Chapter 8
Net-to-Gross and Proration
Chapter
CLASSROOM

Chapter
CLASSROOM
Chapter
CLASSROOM
Net-to-Gross
Net-to-Gross processing enables you to calculate the gross amount needed to meet a fixed net
amount, for example a bonus. You define an earnings type that is a fixed net amount and the
taxes and other deductions you are willing to pay by selecting the balances that can be used in
the Net-to-Gross processing.
Chapter
CLASSROOM
Net-to-Gross
Creating a Net-to-Gross Earnings Type

American and Canadian users create a Net-to-Gross earnings type using the Earnings window.
Initially, you should ensure that you set your effective date early enough to handle any
historical entries you may want to make.
The calculation rule you select generates a formula called <earnings
name>_GROSSUP_FLAT_AMOUNT, which you can configure if necessary. Please ensure
that you select the correct calculation rule for your country:
GROSSUP_FLAT_AMOUNT_NONRECUR (US)
Flat Amount for Net to Gross (Canada)
You review the list of balances in Grossup Processing and clear any Include checkboxes for
balances that you want to exclude from the Grossup processing. You can also exclude balances
for individual element entries using the Exclude Balances window.
After you save your work, you can review the components for the earnings and make changes
to them. However, you cannot amend any details using the Earnings window. Instead, you
have to delete all generated components and re-initiate the earnings.
Chapter
CLASSROOM
Creating a Net-to-Gross Earnings Type (U.S./CA)
Creating a Net-to-Gross Earnings Type

Users in the United Kingdom create a Net-to-Gross earnings type using the Element
Description window. Initially, you should ensure that you set your effective date early enough
to handle any historical entries you may want to make. The earnings element should be non
recurring, disallow multiple entries, and use the iterative formula DEFAULT_GROSSUP. You
can enter an iterative priority if you want to determine the sequence of adjustment during
iterative processing. Elements with a lower priority number are adjusted first. Correct
calculation of Net-to-Gross depends on having the correct input values available:
Amount (desired net pay).
To Within (the amount by which actual net can differ from desired net after normal
processing. This value must not be 0, but can be a nominal amount such as 0.01).
Method (Interpolation or Binary).
Low Gross, High Gross, Remainder, and Additional Amount (The
DEFAULT_GROSSUP uses these inputs to calculate the grossup amount).
Iterative processing rules specify how to use the iterative formula results to control the
processing. Each formula result must adjust the input value of the same name.
Chapter
CLASSROOM
Creating a Net-to-Gross Earnings Type (U.K.)
Net-to-Gross Processing Excluding Balances

When you define a balance, you can select the Grossup check box. By default, this balance is
then included in all Net-to-Gross processing. However, you can exclude a balance from the
net-to-gross processing of a particular element using the Grossup Processing window (U.S. and
Canadian users) or Exclude Balances window. Use the list of values in the Exclude Balances
window to check which balances are included.
Chapter
CLASSROOM
Net-to-Gross Processing Excluding Balances
Proration
Oracle HRMS enables you to calculate proportionate earnings amounts whenever data that is
relevant to a payroll changes during a payroll period.
Various events can trigger the need for proration. For example:
An assignment begins or ends.
A salary amount changes.
A pay rate changes.
Working hours change.
Allowances or deductions change.
Proration unit can be periods, days, or hours. You can apply Proration to a monetary, timebased, or numeric amount.
Chapter
CLASSROOM
Proration
Proration Setup
To prorate an earnings element, such as basic salary, you assign an event group to it. An event
group is a collection of proration points that share similar characteristics.
You can create an event group for all proration points that affect an employees salary, for
example. This event group could contain proration points such as salary increases, assignment
changes, and pay rate changes.
You then process the element using a formula that handles proration. You can either use a
payroll formula that handles proration or create a separate proration formula, using the
predefined examples, that runs after the main payroll formula only in payroll periods when a
proration event occurs.
Chapter
CLASSROOM
Proration Setup
Historic Rates
The historic rates functionality is U.K. specific. It retrieves a datetracked money value and
recalculates it according to different time-dimensions (converting a daily wage to hourly). You
can use historic rates to determine employee payments at the rate that applied when the work
was done, rather than at the current rate.
Historic rates are the values of a specific element or combination of elements, based on a
specified time dimension at a specified date. They can take into account an assignments FTE
and length of service, if the rate of pay varies with these factors.
To calculate pay using historic rates, use the GET_HISTORIC_RATE function in your payroll
formula. This function returns the rate. The parameters for the function are:
The element or group of elements (a rate type)
The time dimension (such as hourly)
The effective date
Chapter
CLASSROOM
Historic Rates (U.K.)
Rate Type Information

For most rate calculations, a single element provides the pay rate. However, some rate
calculations are the sum of multiple elements. For example, a holiday rate could be the sum of:
Basic pay (held as a progression point)
Shift Allowance (an input value)
Bonus (a global value)
The same element can be part of any number of rate types. For example, the basic pay element
could also be part of the sickness rate type.
You use a rate type to group elements that form a single pay rate when they are added together.
You create a rate type using the lookup type PQP_RATE_TYPE and you use the element Rate
Type extra information type to specify the rate types to which an element belongs.
Chapter
CLASSROOM
Rate Type Information
Element Attribution Information

You use this element extra information type to specify:
Time Dimension (hourly, daily, or periodic).
Pay Source Value, which can be either grade rate, spine point, rate type, element name,
global value, or input value.
Qualifier (the name of the source specified in Pay Source Value).
If the value is subject to FTE, ensure that you have entered Working Hours and
Frequency in the Assignment window for your employees.
Whether the formula must adjust the rate according to length of service.
Factor %s
- These attributes apply only if you have a pay source value of element name or rate
type. You enter whether to apply a % or factor, what this figure actually is, or the
input value that holds the figure.
Whether the process should return values only for assignments that are linked to the
element.
Chapter
CLASSROOM
Element Attribution Information
Whether the formula should adjust rates by term-time hours divided by annual hours.
This check only applies to employees whose annual term-time hours are defined on the
Contract table.
If you base a historic rates calculation on an element input value, you also have two options:
If the element allows multiple entries, you can use the sum of all the entries in the historic
rates calculation.
If a lookup determines the input value, you can use the lookup meaning or the lookup
code in your formula.
Chapter
CLASSROOM
Contract Types Table

You use the user-defined PQP_CONTRACT_TYPES table to specify attribution for each
contract type:
Total annual hours worked
Total annual overtime hours worked
Total annual term-time hours worked
Number of days, weeks, or months in year
Adjustment factor for length of service
The historic rates function uses this information about each contract type to convert values held
for one time dimension to another dimension. For example, if a rate is held as an hourly rate
and needs to be returned as a daily rate, the function calculates an annual value by multiplying
the rate by Annual Hours, and then then divides this value by the Days Divisor.
You assign an employee to a contract type on the Extra Details of Service window.
Chapter
CLASSROOM
Contract Types Table
Quiz
Answer: 2
Chapter
CLASSROOM
Quiz
Answers: 2, 4, 6
Chapter
CLASSROOM
Quiz
Answers: 1, 4
Chapter
CLASSROOM
Quiz
Answer: 2
Chapter
CLASSROOM
Quiz
Answer: 1
Chapter
CLASSROOM
Summary
Chapter
CLASSROOM
Summary
Chapter 9
Element Design Wizard
Chapter
CLASSROOM

Chapter
CLASSROOM
Chapter
CLASSROOM
Generating Earnings and Deductions Elements

The two ways of generating earnings and deduction elements are:
Template Elements: You can use the Configuration Workbench to select many earnings
and deductions from a template library for your country and industry into a template set.
The Workbench creates the elements, formulas, balances, and formula result rules that
Oracle Payroll requires to process each earnings and deduction type. You can configure
the components that the Configuration Workbench generates for you.
Generated Elements: This method of initiating earnings and deductions depends on your
localization. Typically you use the Earnings and Deductions windows, Element Design
Wizard, or other template windows for specific earnings and deduction types. The
application generates the elements you require, along with balances, balance feeds, and
formulas. You can configure generated elements and formulas to match any special
requirements.
Chapter
CLASSROOM
Generating Earnings and Deductions Elements

This browser-based wizard guides you through the definition of all typical earnings and
deductions you need to administer a payroll. The Element Design Wizard provides the
following templates that enable you to complete your definitions quickly and with less risk of
error:
Earnings Templates, such as Flat Amount, Percentage of Earnings, and Hours X Rate
Deductions Templates, such as Flat Amount and Percentage of Earnings
Chapter
CLASSROOM
Chapter
CLASSROOM
Element Design Wizard: Process Flow

Chapter
CLASSROOM
Element Design Wizard: Process Flow
Quiz
Answer: 1
Chapter
CLASSROOM
Quiz
Answer: 2
Chapter
CLASSROOM
Quiz
Answers: 1, 2
Chapter
CLASSROOM
Chapter 10
Managing Third Party Payments
Chapter
CLASSROOM
Managing Third Party

Payments

Chapter
CLASSROOM
Managing Third-Party Payments
Chapter
CLASSROOM
Objectives
Chapter
CLASSROOM
Topics
Chapter
CLASSROOM
Third-Party Payments Overview

Third-Party Payments are also known as Wage Attachments, Wage Garnishments or Court
Orders, depending on your localization. Oracle Payroll features for third party payments enable
you to:
Create Third-Party Payments and determine which earnings are eligible for Third-Party
Payments
Administer fees for recouping processing costs of Third-Party Payments (if admin fees
are payable for your localization)
Establish the priority of payments if a worker has several Third-Party Payment
obligations that cannot be met in a single pay period
Stop making Third-Party Payments when your worker has discharged the obligation
Chapter
CLASSROOM
Third-Party Payments Overview
Third-Party Payments
Third-Party Payments are usually involuntary deductions incurred by court debts or fines, such
as child support, but can be a voluntary deduction such as a charitable donation, union dues or
subscriptions to professional organizations. Oracle Payroll enables you to process these
deductions from the employees wages. Third-party payments in Oracle Payroll are rule driven,
so you can tailor them to meet your business needs.
Chapter
CLASSROOM
Third-Party Payments
Entering Third-Party Payments for an Employee
Identify the recipients of the payments Payee Organization or Person (Contact)

Create a specific payment method and add to payrolls as a valid payment method
Enter the third-party pay method as a personal Payment method for the employee Select
the payee organization or person
Assign the wage attachment deduction element to the employee as an element entry
Record appropriate data
Chapter
CLASSROOM
Entering Third Party-Payments for an Employee
Payee: Organization
Use the Organization window to pay to an organization:
Create the location or address first
Create an organization name like Child Support Division of West Virginia, Internal
Revenue Service
Use Payee Organization classification
Chapter
CLASSROOM
Payee: Organization
Payee: Contacts
You create individual payees as contacts of the person making the deductions. In the Contacts
window:
Enter the name and address
Check the Payment Recipient box when you create the payee
Chapter
CLASSROOM
Payee: Contacts
Recording Third-Party Payments for an Employee

Enter a Third-Party Pay Method on the Personal Pay Method window
The system automatically makes this pay method the first priority. You cannot change
this number.
Choose the Payment Recipient by entering the payee organization or contact name.
Enter the Wage Attachment on the employees Element Entries
Chapter
CLASSROOM
Recording Third-Party Payments for an Employee
Managing Deductions
Many Third-Party Payments are not on-going, therefore must be stopped.
Depending on the payment, and whether the deduction is diminishing or on-going, you can set
a deduction end date.
Alternatively, set up the deduction for Oracle Payroll to stop processing when the balance is
paid in full.
Chapter
CLASSROOM
Managing Deductions
Third-Party Processing Priorities

You determine when to deduct each third party payment from an employees earnings, using
element classifications and processing sequences.
For example, you may need to ensure that Oracle Payroll processes court orders before other
deduction types. You may also need to prioritize the court orders further to ensure that Oracle
Payroll always processes child support deductions before education loans. In this example,
these third party payments belong to an element classification with a low numbered processing
sequence. This ensures they are processed before all other deductions.
To ensure Oracle Payroll processes your child support payments before education loans, you
could determine a secondary processing sequence. You do this in the Element Entries window.
If you dont specify a secondary processing sequence, third-party payments are processed in
date order.
Chapter
CLASSROOM
Third Party Processing Priorities
Protected Earnings
You can use the predefined formulas to determine how third party payments are processed in
your organization. For example:
Determine the amount of pay liable for third party deductions. For example, the employees
take home pay after tax and other deductions, and the amount that is protected or exempt from
third-party deductions.
Chapter
CLASSROOM
Protected Earnings
Producing Checks/Cheques for Third-Party Payments

Wage attachments are automatically processed by the payroll run.
After the payroll run you run the PrePayments process.
- This uses personal payment methods for the types of payment and the amount of
pay to distribute to each type.
When PrePayments are complete you are ready to produce a check file for third-party
payments.
Chapter
CLASSROOM

Payment of third-party payments generates one check/cheque per employee. For example, if
several employees have wage attachments paid to the Child Enforcement Division in Georgia,
then the system produces a separate check/cheque for each employee. Select the name of the
third-party payment method. For Check/Cheque Style, select Third-Party Check/Cheque.
The Sort Sequence defaults to:
Organization, Person.
If other sequences are defined for your installation, you can select one of them.
Enter the Start Check/Cheque Number and submit.
Chapter
CLASSROOM
Producing Checks/Cheques for Third- Party Payments
Quiz
Answer: 1
Chapter
CLASSROOM
Quiz
Answer: 1
Chapter
CLASSROOM
Quiz
Answer: 1
Chapter
CLASSROOM
Summary
Chapter
CLASSROOM
Summary

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Student Guide

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R12.x Oracle Payroll

U.S. GOVERNMENT RIGHTS

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Introduction to Payroll Earnings and Deductions ........................................................................................1-1

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Controlling the Frequency of Processing an Element ..................................................................................5-1

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Defining Formula Results and Processing Rules ..........................................................................................4-1

Element Design Wizard...................................................................................................................................9-1

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Creating a Net-to-Gross Earnings Type (U.K.) .............................................................................................8-6

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Working experience with Oracle Applications

How This Course Is Organized

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System release bulletins

Installation and users guides

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Use the SELECT command to view information stored in the

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Typographic Conventions in Code

DROP USER scott

CREATE ROLE role

SQL commands and SELECT userid

Typographic Conventions in Oracle Application Navigation Paths

(M) From the menu, select Query then Find.

(B) Click the Approve button.

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Typographical Conventions in Oracle Application Help System Paths

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Under Journals, select Enter Journals.

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represents the following sequence of actions:

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Introduction to Payroll Earnings and Deductions

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Introduction to Payroll Earnings and Deductions

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Introduction to Payroll Earnings and Deductions

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Introduction to Payroll Earnings and Deductions

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Introduction to Payroll Earnings and Deductions

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Earnings and Deductions Structure

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OraclePayroll Earnings & Deductions