You can define a bonus or other payment, which is a fixed net amount, using Net-to-Gross Processing. Oracle Payroll calculates the gross amount needed to meet the net pay. You define which taxes and other deductions the employer is willing to pay by selecting the balances that can be used in the net-to-gross processing.
The following formulas are used in net-to-gross processing:
DEFAULT_GROSSUP
This iterative formula calculates the amount that the employer must pay in addition to the desired net amount.
CALC_GROSSUP_PAY_VALUE
This formula adds the additional amount returned by the iterative formula to the desired net amount to return the payment amount. Create a formula result rule to return this payment amount as a direct result to the element's pay value.
Net-to-gross elements always process separately, after you process the main payroll.
For details of how to set up a net-to-gross element, see Setting Up Elements for Net-to-Gross Processing
When you define the element for net-to-gross processing, you select which balances to exclude from the gross-up calculations. The employer pays all deductions except the ones you exclude.
The formulas for net-to-gross processing do the following:
The iterative formula takes as input the desired net amount (Amount input value), the amount by which net can diverge from the desired amount (To Within input value), and the method of calculation (Method input value).
In the first run the formula sets the lower gross limit to the desired net amount, and the higher gross limit to twice the desired amount. Then it runs a function to provide the first guess of the gross. The formula returns three values--low gross, high gross, and additional amount--to the element's input values.
The element's payroll formula runs (CALC_GROSSUP_PAY_VALUE). It adds the additional amount to the desired amount to create the gross and returns this value to the element's pay value for the payroll run to process.
In the next iteration, the iterative formula compares the additional amount to the total value of the balances that are available for grossup for this element entry. The additional amount must not differ from this balance total by more than the amount you specified in To Within field.
If the additional amount equals the balance total, then the iterative processing ends.
If the additional amount is above or below the balance total by an acceptable margin, then the processing ends and the formula returns the remainder (additional amount - balance) to the element's Remainder input value.
Otherwise, the formula runs the function to generate a better estimate for gross, using the remainder to determine by how much to change the guess. The formula checks the results in another iteration.