When it is time to calculate your employees' PTU earnings, run the Profit Sharing Process. For the given reporting year, this process evaluates the following criteria and determines the PTU earnings due to each employee:
Amount to share (typically somewhere between 8-10% of the profits, as defined by the National Profit Sharing Commission)
Salary of the employee or 120% of the salary of the highest-paid union employee, whichever is lower
Number of days worked by the employee
Number of days worked by all employees
This process calculates each employee's share in the company's profit and creates a Batch Element Entry (BEE) batch for the Profit Sharing element to store the results of the calculation. Use this batch to create element entries for the Profit Sharing element. You can also download the batch to a spreadsheet for review and make modifications to the calculated values before creating element entries for employees, if needed.
By default, this process includes all employees who have been processed in a payroll run, Quickpay, balance initialization, or balance adjustment process in the year.
Run this process from the Submit Request window.
Select Profit Sharing Process in the Name field.
Click on the parameters field if the Parameters window does not automatically open.
Specify the year for which you want to calculate the profit share.
Specify the date on which the employees would be paid the PTU amounts. Oracle HRMS uses this date to determine when the profit sharing element gets processed through payroll.
Specify the legal employer.
Indicate if you want to include temporary workers in the profit sharing process.
If you chose to include temporary workers, specify the minimum number of days these employees must have worked for them to be eligible.
Optionally, select an assignment set.
Use assignment sets to exclude or include specific employees from the profit sharing process. You can also use assignment sets to process different groups of employees in separate batches.
If you use assignment sets to process employees in separate groups, make sure you specify the same values for "Include Temporary Workers" and "Minimum Worked Days" for all groups. If you do not specify the same value, the profit sharing calculation could be inaccurate.
Specify a unique name for your BEE batch header.
Click OK and then Submit.
The Profit Sharing Report generates a batch file of the specified name. The batch populates the following input values for the Profit Sharing element:
| Input Value | Description |
|---|---|
| Pay Value | Amount of the profit sharing to be paid to the employee. |
| Jurisdiction | Left blank and not used in the calculation. |
| Separate Payment | Indicates the profit sharing amount should be paid separate from other earnings. The application defaults this to Yes. |
| Process Separately | Indicates that the profit sharing amount is being paid with other earnings but taxes on these earnings are being calculated using article 142. The application sets this to 'Yes' by default.
Note: If you set both Separate Payment and Process Separately to No, the application considers the profit sharing earnings to be regular earnings and calculates taxes using article 113. |
| Total Profit Shared | This is the same as Total Amount to Share, entered at the Legal Employer level. This is populated for use in reporting. |
| Eligible Worked Days | Number of days the employee worked in the year. This field is populated based on the Eligible Work Days for Profit Sharing balance for the employee. |
| Eligible Compensation | Employee basis for profit sharing calculation. This is based on the Eligible Compensation for Profit Sharing balance for the employee. |
| Average Daily Salary | Employee's daily salary for profit sharing calculation. |
| Capped Average Daily Salary | The employee's daily salary capped to 1.2 times the highest daily salary. |
| Total Worked Days | Total days worked in the year by all eligible employees. |
| Total Capped Average Salary | Total of the capped daily salary for all eligible employees. |
| Worked Days PTU Component | Portion of an employee's profit share that is based on number of days worked. |
| Average Salary PTU Component | Portion of an employee's profit share that is based on daily salary. |
| ISR Subject | Portion of the profit sharing payment that is subject to ISR tax. This is based on the limits specified within ISR tax law. The ISR Subject value is computed using Unit of Measure and Update (UMA). |
| ISR Exempt | Portion of the profit sharing payment that is exempt from ISR tax. This is based on the limits specified within ISR tax law. The ISR Exempt value is computed using UMA. |
You can download the entire batch into a spreadsheet using the BEE Spreadsheet interface. From there, you can review the data and make modifications. You can use the standard spreadsheet features to manipulate data in the spreadsheet generated by the process. You can also update the BEE batch by uploading the spreadsheet back into the application. Once you have verified the results, you can transfer the BEE Batch. Transferring the batch creates element entries for all employees included in the batch. These element entries can then be processed in a subsequent payroll run.
Open the Batch Header window and query for your BEE batch header name.
To view your batch, click Assignment Lines.
To transfer the batch, click Process.
Once you have successfully processed the batch, you can run the payroll and distribute the earnings to your employees.