Oracle Applications R12

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Payroll

2/24/2012

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Oracle Applications – Payroll

1. Proration Setup

When you prorate an amount, you distribute the payment proportionally over a set period. Rent, utilities and other kinds of payments can be prorated. Suppose if Salary of an employee is changed in the mid of the month then he should get the pay of first 15 days on the basis of old salary and should get remaining days salary on the basis of new salary within a period.

Let’s say we have hired an employee from ’01-JAN-2000’.

Create an Element like ‘Monthly Basic Pay’

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Click on the ‘Input Values’ button to add the input values as shown. Add M_Basic_Pay and check the Database item

Then Click on Save Icon to save the record

Create Link for the Element ‘Monthly Basic Pay’ to make element available. We can set

eligibility criteria for a employee and check Standard check box for Recurring Type elements to attached automatically with employees as per criteria.

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Now Query the Employees record and go to the assignment screen Click on the Entries Button to attach the element.

Attach the ‘Monthly Basic Pay’ Element from ’01-Jan-2000’. If effective date is current date then track the date to ’01-Jan-2000’

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Then Click on the Entry Values Button to enter the Salary the Employee Enter the Salary ‘20000’ and save

Now go to the Fast Formula and write the Fast formula as below. Type will be ‘Payroll Run

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Complete Fast Formula for Proration

DEFAULT FOR MONTHLY_BASIC_PAY_M_BASIC_PAY_ENTRY_VALUE is 0 DEFAULT FOR PAY_PROC_PERIOD_START_DATE IS '1900/01/01 00:00:00' (DATE)

DEFAULT FOR PAY_PROC_PERIOD_END_DATE IS '4712/12/31 00:00:00' (DATE) DEFAULT FOR PRORATE_START IS '1900/01/01 00:00:00' (DATE)

DEFAULT FOR PRORATE_END IS '4712/12/31 00:00:00' (DATE)

ALIAS MONTHLY_BASIC_PAY_M_BASIC_PAY_ENTRY_VALUE AS BASIC_PAY ALIAS PAY_PROC_PERIOD_END_DATE AS PERIOD_END

ALIAS PAY_PROC_PERIOD_START_DATE AS PERIOD_START INPUTS ARE prorate_start(date), prorate_end(date) No_of_days = 0 amount = 0 RATE_PER_DAY = 0 WORKING_DAYS = 0 No_of_days = to_number(to_char(last_day(PERIOD_END),'dd')) WORKING_DAYS = DAYS_BETWEEN(PRORATE_END,PRORATE_START)+1 Rate_per_day = WORKING_DAYS/no_of_days

Amount = ROUND(BASIC_PAY * RATE_PER_DAY,0) Return Amount

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Add the Formula results as below screen and save

Now Query the Seeded Event Group and check the tables and columns. We can create our own event group if required

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Now Query the Element and move to the Proration Tab and set the Proration Group (Event Group Name) and Formula and save.

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2. Proration Testing

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Update the Salary value from 20000 to 30000 and save. A window will appear Click on Update Save

Record is saved with new value which means employees salary from 01-Jan-2000 to 14-Jan-2000 was 14-Jan-20000 and 30000 from 15-Jan-14-Jan-2000 onwards.

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Now Run the Quick Pay (Change the date to the last of the Month i,e ’31-Jan-2000’

Query employee’s record, go to assignment’s screen and click on ‘Others’ button to run quick pay.

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Select ‘Standard’ as Run Type

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Status will be completed. Now Click on View Results Button

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You can see the change. Element attached twice and calculated. 9032 amount is calculated against 20000 for 14 days and 16452 is calculated against 30000 for 16 days.

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3. Accrual Plan Setup

Accrual plans permit eligible employees to accrue / accumulate / gain PTO (paid time off) each year as they work, to use for vacation or sick leave. Oracle HRMS has no restrictions on the number of plans you can set up, each with its own units of accrued time (hours or days) and its own rules.

First we create two lookup values (ABSENCE_CATEGORY and ABSENCE_REASON) See the Navigation

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Now go to the Element Description screen and Define new element as ‘Annual Leave’ Add input values as ‘Day’ and Check the Database Item Box

Save

Create Element Link to make sure that element is available (We can set Eligibility Criteria to restrict the element for organization , job , grade , people group , position etc ) and we can make element as Standard to be attached automatically with employees as per criteria

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Now Define the Absence Types

In Which

We attach the Category (Lookup Values we created above) We attach the Element used for Accrual.(We create above) We attach Reasons (Lookup Values we created above)

In the next step we will define Accrual Plan

We use the seeded formulas for accrual and we can set Accrual Start as Hire Date when employee joins the organization.

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Oracle Applications – Payroll See the Navigation

See the screen to select Hire Date

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Formula for Carry Over

Click on the Accrual Band button and enter

Year of Service = Total Service (up to the retirement or can break in rows)

Annual Rate = Annual leaves employee can avail in a year

Maximum Carryover = Employee can carry remaining leaves in next year if not availed (if value is less than annual rate and

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Ceiling = The maximum amount of unused paid time off an employee can have in an accrual plan. When an employee reaches this maximum, he or she must use some accrued time before any more time will accrue.

Save

When we save the Accrual Plan then automatically five elements are created with the starting name of our element

Elements created

- Annual Leave Plan

- Annual Leave Plan Carried Over - Annual Leave Plan Residual - Annual Leave Plan Tagging

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Second Element Created

It holds unused accrual/leaves to be carried over to next year/payroll year. Third Element Created

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It holds unused accrual/leaves that cannot be carried over to next year/payroll year due to accrual rules/bands.

Fourth Element Created

The payroll run uses a tagging element to keep track of retrospective entries of absences (and other elements included in the net accrual calculation). When the payroll run encounters a retrospective entry, it will recalculate gross accruals to take account of this entry. It then creates a tagging element entry so that the same retrospective absence does not trigger it to recalculate gross accruals in the next payroll run.

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Example: Supposing an accrual plan has a ceiling of 10 days, and two days accrual per

month. An employee has a net accrual of 10 at the end of May. The June payroll run does not award any new accrual to this employee because the net accrual must not exceed the ceiling. However, in July the employee’s manager enters five days vacation in May,

retrospectively. The July payroll run recalculates the accrual and updates the gross accrual balance to 14. The net accrual is now nine (14 minus 5).

Fifth Element Created

Payroll Balance element contains net accrual of a Payroll Period. One can see the values in “Run Result” form after running payroll for a month.

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4. Accrual Plan Testing

Query the Employee and attach the plan First set the date to ’01-MAR-2000’

Go to the assignment screen and attach the automatically create element ‘Annual Leave

Plan’

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Now Go to the Accrual screen ( FastPAth >>> Accruals ) to see the accrual results As we are on the first date of the month we can see Net Entitlement is ‘0’ because employee can only be eligible for leaves

at the end of the month

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Again go to the Accruals form and see the Change As we have given 20 annual leaves in Accrual Plan so monthly entitlement is 1.667 if leaves not availed

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Set the date to ’10-Apr-2000’ and enter leaves from 15-Apr-2000 to 15-Apr-2000 (One Day Annual Leave)

Save

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As employee’s joining date is 01-Mar-2000 and Accrual Plan starts from 01-Jan-2000 so Projected entitlement is 15.667 out of 20 annual leaves

Now go to the Accruals form and check the entitlements up to 30-Apr-2000 after changing date.

Here net entitlement is

Month Accrual Per Month By

Formula Leaves Total Accrue - Leaves Balance

Mar-2000 1.667 0 1.667 - 0 1.667 Apr-2000 1.667 + (Last Month

Balance(1.667)) 1 3.333 - 1 2.333

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Submit a single request

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See the entitlements from 01-Mar-2000 to 31-Dec-2000

As we are at the end of the year date i.e 31-Dec-2000 we cant see carry over leaves

Now keep in mind that we entered 5 in maximum carryover in our accrual plan so an employee can only carry 5 leaves in next year and other not availed leaves will be lost . Change the date to ’01-Jan-2001 and see the change.

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5 - RetroPay By Element Setup

Wages/Arrears due for past months at newly negotiated rates/increment in salary from past months.

First we have to create two elements one for Salary and one for Adjustment (Arrears) Elements : xxMonthly Salary

xxMonthly Salary Adj

Set effective date to your actual setups date (Normally we create all elements including adjustment elements during initial setups)

Define the element and select Primary classification as Earnings

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Click on Input Values Button and define input values for the element, check database item and save

Same way define another element which is our adjustment element. But make it

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Now we can define the salary basis but its an optional step.

Select the values from list of values like element name and input value name and basis.

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Oracle Applications – Payroll Link for Salary Adj element.

Now define a person by setting the effective date ’01-Jan-2000’ (You can hire a person at a later date)

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Now attach Payroll and Salary Basis with person at assignment screen. save

Now Click on the Entries Button on Assignment screen and attach element xxMonthly Salary with the person. Then click on entry values

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Oracle Applications – Payroll Now Run the quick Pay

We will run quick pay for the month of Jan-2000 and Feb-2000 with only one element that is xxMonthly Salary

Then we will run quick pay for the month of Mar-2000 with changed salary with two elements after some more setups.

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Select Standard as Run Type

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Process is Completed. Click on View results and select Run results.

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Create new event group and add the following datetracked events as below.

Note: One can use predefined event group for Retropay.

These are the events to add to our newly created event group.

Update Type Table Column Name

Date Track Update PAY_ELEMENT_ENTRIES_F EFFECTIVE_END_DATE

Date Track Update PAY_ELEMENT_ENTRIES_F EFFECTIVE_START_DATE

Date Track Delete PAY_ELEMENT_ENTRIES_F

Date Track End Date PAY_ELEMENT_ENTRIES_F

Date Track Insert PAY_ELEMENT_ENTRIES_F

Date Track Correction PAY_ELEMENT_ENTRIES_VALUES_F SCREEN_ENTRY_VALUE

Now go to the element screen again and Query xxMonthly Salary Element and Click on

Recalculation tab and add

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6 - RetroPay By Element Testing

Now query Employee record for which we are testing our scenarios.

Update the salary from 10,000 to 12,000 on 01-Jan-2000 and select correction when save(if salary was defined on 01-Jan-2000).

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Now create assignment set to run retropay for only our selected employee.

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Select Include and add Saleem, Mr Yaseen (Our Employee ) SAVE.

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Saving the record will enable “Include Element” Button.

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Now Run the request Click on View and select Request from drop down menu list

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Find Retro-Notification Report request (running this request is an optional task. Not running this task will not effect on Retropay process).

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You can Click on Refresh Data button to see the updated Phase & Status of request otherwise request Phase & Status

will be updated automatically on completion.

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Now run the RetroPay By Element Process. Give the parameters as below

Check the request as we did before.

Click on View Log to see the assignments processed

See the Assignments processed, as we have just one employee in our assignment set so number of assignments processed is 1.

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Go to the assignment’s screen and click on Entries button. Here you can see the two elements are attached as we have changed

our salary in Jan-2000 and run the process in march that’s why Adj Element for jan and feb is attached with entry value 2000 (amount increased since Jan and have to be paid in March as arrears)

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Oracle Applications – Payroll See the Change for Feb-2000

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Here we can see that oracle payroll has calculated the two month arrears (which are only salary difference I,e 12000 – 10000 = 2000

Oracle Applications R12 - Payroll Setups v1.2