Working with Salary and Bonus

This chapter provides an overview of salary and bonus rules and discusses how to:

• Set up for salary processing.

• Report earnings and deductions.

• View delivered salary and bonus elements.

Understanding Salary and Bonus Rules

The delivered rules for determining salary and bonus satisfy Japanese statutory and business requirements. This section reviews some of the requirements and discusses in general terms how the rules satisfy them. Separate chapters discuss additional earnings and deductions that affect employee take-home pay.

This section provides an overview of:

• Base pay setup.

• Overtime pay.

• Pay cut due to absence.

• Bonus.

• Earning accumulators.

Base Pay Setup

In calculating base pay, Global Payroll for Japan uses the employee’s compensation package that you define by using compensation rate codes in PeopleSoft Enterprise Human Resources. The base pay rate formula (ER FM BASE RATE) gathers the employee’s base pay rate codes, converts them to the frequency of the employee’s pay type, and sums them to determine the value of the base pay rate variable (ER VR BASE RATE).

Base pay is calculated differently depending on the employee’s pay type. If the employee’s pay type is daily or hourly, the system also uses time data when calculating base pay. Enter time data each month on Global Payroll Positive Input pages.

See Also

Defining Country Data

Tracking Time Data

Overtime Pay

You define the value of the variables for overtime premium amounts and overtime premium ratios. The system calculates the employee’s overtime base unit, and then calculates overtime pay according to the amount of overtime that you enter for the employee.

The system provides variables for the following overtime premium ratios:

• Regular.

• Holiday.

• Late night.

• Holiday late night.

See Also

Defining Country Data

Pay Cut Due to Absence

You define the value of the variables for reduction base amounts and reduction ratios. The system calculates the employee’s reduction base unit, and then calculates the pay cut based on the amount of absence time that you enter for the employee.

The system provides variables for the following reduction ratios:

• Tardy arrival and early departure.

• Special leave.

• Absence.

• Sick leave.

Bonus

The system delivers the bonus earning element (ER BONUS). Use positive input to enter each employee’s bonus amount into this element.

See Also

Working with Positive Input

Earning Accumulators

For purposes of taxation and insurance premiums, accumulators track the following amounts of each employee’s salary and bonus:

• Taxable.

• Nontaxable.

• Cash.

• Non-cash.

• Remuneration subject to social insurance premium.

• Wages subject to labor insurance premium.

Additional accumulators track other details and totals of pay.

Setting Up for Salary Processing

You must enter some data into the system before you calculate salaries for employees whose pay types are other than Monthly:

1. Map compensation rate codes that are set up in Human Resources to the Global Payroll Japan rate codes.

2. Enter or update the default value of the variables for calculating overtime pay and pay cut due to absences on the Variable by Category page.

   This table lists the delivered variables and the corresponding category that are used to access the Variables by Category page:

   Variable	Description	Category
   ER VR WRK DAYS YR	Annual number of workdays.	Overtime Premium Reduction Base Information
   ER VR WRK HRS DAY	Fixed working hours per day.	Overtime Premium Reduction Base Information
   ER VR OVR PRM RAT	Overtime premium ratio for regular overtime.	Overtime Premium Rate
   ER VR HOL PRM RAT	Overtime premium ratio for holiday overtime.	Overtime Premium Rate
   ER VR NIG PRM RAT	Overtime premium ratio for late night overtime.	Overtime Premium Rate
   ER VR HOLN PRM RAT	Overtime premium ratio for holiday late night overtime.	Overtime Premium Rate
   ER VR TAED RAT	Absence reduction ratio for tardy arrival and early departure.	Reduction Ratio
   ER VR SPLE RAT	Absence reduction ratio for special leave.	Reduction Ratio
   ER VR ABS RAT	Absence reduction ratio for absence.	Reduction Ratio
   ER VR SCLE RAT	Absence reduction ratio for sick leave.	Reduction Ratio

3. Override the default value of the variables at any level necessary on the override page for the appropriate supporting element.

4. Enter each employee’s time data for overtime and absence through positive input.

See Also

Defining Rate Code Elements

Setting Up Pay Types

Tracking Time Data

Reporting Earnings and Deductions

Global Payroll provides a generic report that you can configure to list earnings and deductions for each employee.

See Also

Setting Up and Running Generic Reports

Viewing Delivered Salary and Bonus Elements

Global Payroll for Japan delivers earnings and process lists to calculate salaries and bonuses.

Salary and Bonus Earnings

This table lists the salary and bonus earnings:

Salary and Bonus Process Lists

This table lists the salary and bonus process lists:

See Also

Viewing Delivered Elements and System Data

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Japan. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

See Also

Viewing the Delivered Elements