Oracle HRMS provides you with the ability to define all typical earnings and deductions needed to administer payroll, using a browser-based wizard. This classification and secondary classification model determines element behavior.
Note: You can only define new elements with this wizard. You cannot delete, update, or query for existing elements.
You must choose a calculation rule for each element you define. The rules that are available for earnings elements are: Flat Amount, Hours * Rate, Percentage of Earnings, and Days * Rate.
When defining deductions elements, you can choose to withhold a flat amount or a percentage of eligible earnings each pay period.
Note: HRMS elements do not support by default:
Special inputs
Skip rules
Oracle HRMS has replaced these features with new functionality (such as run types and pay value overrides).
When you define an element through this wizard, it automatically creates the following characteristics:
Balance Attributes (for Balance Reporting)
Element Extra Information Types (for IDW)
Secondary Classifications
Frequency Rules
You assign each element with a classification. You can do this through the Element Design Wizard.
For earnings elements, the classifications are:
Earnings
Supplemental Earnings
Imputed Earnings
Amends
Non-payroll Payments
For deduction elements, the classifications are:
Pre-tax Deductions
Tax Deductions
Involuntary Deductions
Voluntary deductions
See also: Survey of the Classifications
You must choose a calculation rule for each element you define. The rules that are available for earnings elements are:
| Calculation Rule | Description |
|---|---|
| Days * Rate | For earnings that are based on a daily rate. The result is derived by multiplying the number of days with the daily rate. The number of days and the daily rate can be specified on the element entry. If left blank, the number of days is derived from the employee's work schedule and the daily rate is derived from the employee's salary proposal. |
| Flat Amount | Pays the amount specified on the "Amount" input value. |
| Hours * Rate | For earnings that are based on an hourly rate. The number of hours and the rate can be specified on the element entry or can be derived from the work schedule and the salary proposal. |
| Percentage of Earnings | For earnings that are calculated as a percentage of another balance. This balance is defaulted to the employee's normal pay as defined through salary administration. |
Christmas Saving is a deduction from the employee calculated as a percentage of gross earnings. At the end of the year, the "Saving Box" distributes the funds back to the employee with interest. The "Saving Box" is a saving fund selected by the employees, which is different from the formal "Saving Fund" which is administrated by the employer.
If an employee authorizes a 5% deduction for Christmas Saving, and they are paid semi-monthly with gross earnings for the period of $5,000.00, the Saving Box input value would be 5.00. The deduction amount would be $250.00.
The available deduction calculation rules are:
| Calculation Rule | Description |
|---|---|
| Flat Amount | Creates deductions that deduct the amount specified on the "Amount" input value. |
| Percentage | For deductions that are a percentage of eligible earnings. The percentage is specified on the element entry. The eligible earnings are defined by feeding the eligible comp balance for the deduction. |
See also: Amount Rules for Earnings and Non-Payroll Payments and Calculation Rules for Deductions
The wizard helps you specify the following attributes for earnings elements:
| Attribute | Description |
|---|---|
| Base Compensation | You can use Historic Rates to group elements into Rate Types. Use this field to indicate if the element is a part of the delivered Base Pay rate type. Oracle HRMS uses Base Pay to derive other earnings like Christmas Bonus and Vacation Premium. Oracle HRMS determines the ordinary monthly salary for an employee using this Historic Rates functionality and the Base Pay rate type. You identify the elements that contribute to an employee's base salary by setting the Base Compensation field to "yes." Oracle HRMS uses Base Salary to the compute the employee's monthly pay, which is needed to compute the ISR tax on Amends as well as non-periodic earnings. See: Historic Rates |
| IDW Type | Use this field to indicate if the earning should be considered as Fixed or Variable for IDW purposes. See: Integrated Daily Wage Overview |
| Time Dimension | Use this field to specify one of the following calculation frequencies:
Oracle HRMS uses this to convert the value into a daily amount for IDW purposes. |
| Pay Source Value | Use this field to specify how the IDW value for this element is derived. |
| Qualifier | Use this field to specify the name of the element, rate type, or input value from the Pay Source Value field to be used in IDW. |
| Calculation Type | Use this field to specify if the IDW value for the element is derived as a percentage or multiple of the pay source value specified earlier. Use this field only if you selected element or rate type as the pay source value. |
| Calculation Value | Use this field to specify the value of the percentage or the factor to be applied to the result if you have selected a value for the calculation type field above. |
| CFDI Payslip Code | Use this field to specify the CFDI Payslip Code. This information is mandatory for each element as the XML Payslip will be invalid, if any element which is present in the XML Payslip does not have the CFDI Payslip code. For elements, you can enter CFDI Payslip Code using the Element Description, Further Information window. See: Setting up Information for CFDI Payroll Payslip XML Interface for more information. |
| CFDI Overtime Hours Type | Use this field to specify the CFDI Overtime Hours Type. Although this field is available for all elements with the Calculation Rule Hours X Rate in the Element Design Wizard page, use this field only for Supplemental Earnings with the secondary classification Overtime or Other Overtime. This information is mandatory for each element as the XML payslip will be invalid, if any element which is present in the XML Payslip does not have the CFDI overtime hours type. For existing elements, you can enter the CFDI Overtime Hours Type using the Element Description, Further Information window. See: Setting up Information for CFDI Payroll Payslip XML Interface for more information. |
Oracle HRMS uses the following additional attributes to capture information relating to the processing of the element:
| Attribute | Description |
|---|---|
| Includes Rest Days | This attribute is available only if you selected the "Days * Rate" calculation rule. Select "Yes" if rest days are included in the calculation of the daily rate and the number of days. Example If an employee earns 350.00 MXP per week and "Yes" is selected, the daily rate is calculated as 50.00 MXP because it calculates the rate based on 7 days and 70.00 MXP The value is stored under the Further Element Information flexfield. |
| Tax Processing Type | Use this field to specify how tax rules should be applied to earnings.
|
| Eligible Worked Days for PTU | This attribute is available only if you selected the "Days * Rate" calculation rule. Select "Yes" for those earnings whose days balance should be included in the profit sharing calculation. |
The wizard helps you specify the following attributes for deductions elements.
See: Deductions Overview
The following options are available:
Arrearage and No Partial Deduction
Example
The employee only earns commissions, which can vary and is paid weekly. In this example, the employee is scheduled to have a $300 deduction called Deduction "A" to be taken.
| Week | Gross Earnings | Taxes | Deduction A | Net Pay |
|---|---|---|---|---|
| 1 | 1,200.00 | 400.00 | 300.00 | 500.00 |
In the next payroll period, the employee earns only $300.00. The scheduled deduction of $300 is NOT taken and is placed into arrears.
| Week | Gross Earnings | Taxes | Deduction A | Net Pay |
|---|---|---|---|---|
| 2 | 300.00 | 100.00 | 0.00 | 200.00 |
In week number 3, the employee earns enough for the current $300 Deduction "A" and the arrearage amount from week number 2.
| Week | Gross Earnings | Taxes | Deduction A | Net Pay |
|---|---|---|---|---|
| 3 | 1,200.00 | 400.00 | 600.00 | 200.00 |
Arrearage and Partial Deduction
Example
Employee is paid weekly and has a deduction called Deduction "B" in the amount of $300.00 per week.
| Week | Gross Earnings | Taxes | Deduction B | Net Pay |
|---|---|---|---|---|
| 1 | 1,000.00 | 200.00 | 300.00 | 500.00 |
In week number 2 the employee's earnings after taxes are withheld is $225.00. Oracle Payroll deducts this amount and places $75.00 in the arrears balance.
| Week | Gross Earnings | Taxes | Deduction B | Net Pay |
|---|---|---|---|---|
| 2 | 300.00 | 75.00 | 225.00 | 0.00 |
Week number 3 shows the regular scheduled Deduction "B" of $300 plus an additional $75 to make up the shortage from week number 2.
| Week | Gross Earnings | Taxes | Deduction B | Net Pay |
|---|---|---|---|---|
| 3 | 1,000.00 | 200.00 | 375.00 | 425.00 |
Error on Arrearage
No Arrearage and No Partial Deduction
No Arrearage and Partial Deduction
Example
Employee has $1,000 in earnings, Deduction D for $300 (Deduction D defined as No Arrearage, but "Yes" take a Partial Deduction) Union Dues for $300 and Uniform deduction for $100.
Union Dues and Uniform Deductions are deducted before Deduction "D".
| Week | Uniform | Deduction D | Net Pay | |||
|---|---|---|---|---|---|---|
| 1 | 1,00.00 | 315.00 | 300.00 | 100.00 | 285.00 | 0.00 |
In week number 2 Employee has $1,350 in earnings. Oracle Payroll will deduct the regular scheduled amount for Deduction "D". No additional entry for the week number 1 difference of $15 is taken.
| Week | Gross Earnings | Taxes | Union Dues | Uniform | Deduction D | Net Pay |
|---|---|---|---|---|---|---|
| 2 | 1,350.00 | 467.00 | 300.00 | 100.00 | 300.00 | 183.00 |
The deduction stops for an employee when a balance of the amount taken for the deduction reaches a specified amount.
Used to identify the element as an INFONAVIT element and is required for inclusion of INFONAVIT information on Social Security reports and the SUA Interface.
Set the INFONAVIT field to "Yes" to generate additional input values required for tracking INFONAVIT related information.
The following input values would be created when the value of 'INFONAVIT' segment is 'Y':
| Input Value | |
|---|---|
| Credit Number | Number |
| Credit Start Date | Date |
| Discount Type | Character |
| Discount Value | Number |
| Credit Grant Date | Date |
| Transaction Type | Number |
| Reduction Table Applies | Character |
See: Federal Workers Housing Fund (INFONAVIT)
When creating elements in the Element Design Wizard, Oracle HRMS creates the following input values based on the calculation rule you specify.
See: Input Values and Formula Results
The Element Design Wizard automatically creates the Fast Formula element, based on the formula templates and calculation types. The formula name has the element name as a prefix and the calculation name as the suffix.
When creating elements in the Element Design Wizard, Oracle HRMS creates the following formula result rules based on the calculation rule you specify.
See: Input Values and Formula Results
When creating elements through the Element Design Wizard, it generates the following balance feeds and dimensions based on the calculation method you select.
See: Balance Types, Dimensions, and Feeds
The payroll run uses Element Type Usages to determine whether an element can be processed in the run type being processed. The payroll run can also use element type usages to determine if a particular run type should be triggered. Mexico Payroll uses Element Type Usages to implement the Tax Processing functionality.
Elements with 'Regular' tax processing type are excluded from the following run types:
Separate Payment - Non Periodic
Process Separately - Non Periodic
Elements with 'Non Periodic' tax processing type are excluded from the following run types:
Separate Payment
Process Separately
The payroll run uses element type usages and run types to determine if Oracle Payroll should use Article 142 to calculate ISR tax instead of Article 113.
When creating Earnings elements, the element template wizard creates the following Element Extra Information Types to support the Historic Rates functionality for the calculation of IDW:
Historic Rate - Element Attribution
Historic Rate - Rate Types
When creating Deductions elements, the element template wizard creates the following Element Extra InformationType to support the INFONAVIT Discounts and Retirement Fund Voluntary Contributions:
Deduction Processing
If you need to delete elements you created with the Element Design Wizard, do not use the Element window. Query the element from within the wizard and delete it from there.
See: Deleting an Element