Setting Up General Deductions

This chapter provides an overview of general deductions and discusses how to:

• Modify and update delivered general deductions.

• Create new general deductions.

Note. General deductions define calculation routines for deductions other than benefit deductions.

Understanding General Deductions

This section discusses:

• Delivered general deductions.

• Delivered supporting elements.

• Deduction assignments.

• Deduction overrides.

• Process lists and sections.

• Viewing delivered elements.

Delivered General Deductions

The PeopleSoft system delivers a number of general deductions for the U.S. that demonstrate the flexibility of Global Payroll rules to meet common processing requirements such as loan and garnishment calculations.

In this table, the first column combines the name and description of the delivered deductions. The other columns indicate the calculation rule components, such as Unit, Rate, Percent, and Amount, and the pre- and post-process formulas for each deduction.

Note. Except for BOND and BOND PURCH, the general deductions are defined as PS Delivered/Not Maintained. This means that you can use them as delivered, modify them, or replace them with new elements.

Credit Union

The CREDIT UNION deduction has a calculation rule of Amount and is used to calculate contributions to a company savings plan. Define the amount at the payee level using the Element Assignment by Payee (GP_ED_PYE) and Payee Assignment by Element (GP_ED_ELEM) components, or positive input.

United Way

The UNITED WAY deduction has a calculation rule of Amount and is used to calculate United Way contributions. Define the amount at the payee level using the Element Assignment by Payee (GP_ED_PYE) and Payee Assignment by Element (GP_ED_ELEM) components, or positive input.

Holiday Fund

The HOLIDAY FUND deduction has a calculation rule of Amount and is used to define holiday savings accounts. Define the amount at the payee level using the Element Assignment by Payee (GP_ED_PYE) and Payee Assignment by Element (GP_ED_ELEM) components, or positive input.

Loan

The LOAN deduction has a calculation rule of Amount and is used to calculate regularly scheduled loan payments. Define the amount, the loan repayment schedule, and other information related to the loan at the payee level using the Request Loans USA page.

Loan Additional Payment

The LOAN AD PYMT deduction is for additional, one-time payments a loan recipient may choose to make outside of the standard repayment schedule. It has a calculation rule of Amount; define the amount, payment date, and other information related to the additional loan at the payee level using the Request Loans USA page.

Note. The deduction LOAN AD PYMT is referred to as a non-payroll loan payment. Although it is processed by the payroll system, it does not reduce the amount of net pay (it is not included in the standard gross to net calculation); instead, it directly reduces the loan balance.

Garnishment

The GARNISHMENT deduction has a calculation rule of Amount and is used to calculate child, spousal, or dependent support deductions, tax levies, creditor garnishments, delinquent student loans, and other types of garnishments. Define garnishment information at the payee level using the Assign Garnishments USA component.

Bond

The BOND deduction has a calculation rule of Amount and enables payees to purchase bonds through payroll deductions. Define the deduction amount, the bonds to purchase, registration instructions, and other information at the payee level on the Savings Bond Assignment page.

Bond Purchase

The BOND PURCH deduction has a calculation rule of Unit x Rate, and enables payees to purchase bonds using the amounts processed by the BOND deduction.

Delivered Supporting Elements

This table lists the key supporting elements used to define the delivered general deductions:

Note. Additional information about supporting elements can be found in chapters on each of the general deduction types.

See Also

Setting Up Loan Deductions

Setting Up Garnishment Processing

Administering U.S. Savings Bond Purchases

Deduction Assignments

Deductions with a component of their calculation rule set to Payee Level must be assigned to individual payees before they can be processed, and require positive input for either the Unit, Rate, Base, or Percent component.

The following delivered deductions for the U.S. fall into this category:

See Also

Assigning Loan Deductions

Assigning Garnishments

Administering U.S. Savings Bond Purchases

Deduction Overrides

You can override the amounts that are regularly processed for a loan, garnishment, or bond deduction by entering one-time positive input. This table explains how to define one-time overrides for these deductions:

Process Lists and Sections

All general deductions are members of the USA STD PAYROLL process list.

Within this process list, the general deductions are arranged in these sections:

Viewing Delivered Elements

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

See Also

Viewing the Delivered Elements

Modifying and Updating Delivered General Deductions

This section provides overviews of deduction schedules and deduction recipients, and discusses how to:

• Modify deduction schedules.

• Modify deduction recipients.

Note. This section focuses on the CREDIT UNION, UNITED WAY, HOLIDAY FUND, LOAN, and LOAN AD PYMT deductions. We discuss other general deductions in detail in chapters dedicated to specific types of deductions such as garnishments and bonds.

See Also

Setting Up Garnishment Processing

Assigning Loan Deductions

Assigning Garnishments

Administering U.S. Savings Bond Purchases

Understanding Deduction Schedules

This section discusses:

• Deduction schedules.

• Generation controls for bi-weekly and semi-monthly pay periods.

• Generation controls for weekly pay periods.

• Defining deductions with multiple and single frequencies.

• Using generation control when the frequency is per calendar period frequency

• Using generation control with a specified frequency.

Deduction Schedules

The general deductions are delivered with a frequency option of Use Calendar Period Frequency. This means that the deduction amount that the system calculates for an eligible payee is the same regardless of the pay period frequency. For example, suppose that you define a deduction as a flat amount of 100.00 USD with a frequency option of Use Calendar Period Frequency. If you process payrolls on a weekly basis, the system deducts 100.00 USD per week for eligible payees. If you process payrolls monthly, the system deducts the same amount each month.

All general deductions delivered with Global Payroll for United States are set up to be processed every pay period, in the first segment only. If you don’t want the system to process a deduction each pay period, you can use one of several delivered generation controls, or define your own generation control frequencies modeled on the delivered generation control elements.

Generation Controls for Bi-Weekly and Semi-Monthly Pay Periods

This table lists the generation control elements delivered for bi-weekly and semi-monthly pay calendars and the associated frequency factors:

Note. You can associate these generation control elements with a deduction at the element level, or assign them to specific payees using the Element Assignments by Payee component.

Generation Controls for Weekly Pay Periods

This table lists the generation control elements delivered for weekly pay calendars and the associated frequency factors:

Note. You can associate these generation control elements with a deduction at the element level, or assign them to specific payees using the Element Assignments by Payee component.

Defining Deductions with Multiple and Single Frequencies

When a deduction has multiple frequencies, you may need to create generation control elements with more than one associated frequency factor. For example, if you define a deduction that can be taken in the first and second weeks of a weekly pay calendar (frequency factor = 24) or in the first period of a bi-weekly pay calendar (frequency factor = 12), define a generation control element containing both of the required frequencies (as in the case of the delivered generation control element GEN GC WEEK 1AND2). If you process your deductions on a single frequency, you can define generation control elements with a single associated frequency factor.

Using Generation Control When the Frequency Is Per Calendar Period Frequency

When the frequency of a deduction is Per Calendar Period Frequency, the system does not annualize or deannualize amounts to account for different pay period frequencies. This is true even when the deduction is associated with a generation control element. For example, assume that you assign the CREDIT UNION deduction to a payee for 100 USD, and that you process payees weekly. If you use the generation control element GEN GC WEEK 1AND2 with a frequency factor of FRST SCND to schedule this deduction in the first and second week of each month, the amount taken each pay period does not change, but the frequency of the deduction does (100 USD is taken only twice a month, rather than every week).

Using Generation Control with A Specified Frequency

Normally, when you define a deduction with a specific frequency such as monthly or weekly, the system annualizes the amount of the deduction using one of the frequencies defined in the HR Frequency table, and deannulizes it using the pay period frequency.

For example, assume that you process payees weekly, and that you define a deduction of 100 USD per month (frequency = monthly). During processing, the system annualizes this amount to 1200 USD (100 x 12 [monthly frequency factor]), and then deannualizes it into the payroll processing frequency (frequency = 52). The amount paid each period is 1200/52 = 23.076923.

However, when you use a generation control element with an associated frequency factor, the system deannualizes the deduction amount using the frequency associated with the generation control element, rather than the pay period frequency. For example, assume that you use the delivered generation control element GEN GC WEEK 1AND2 with a frequency factor of FRST SCND to schedule the UNITED WAY deduction in the first and the second week of each month. The frequency factor associated with this generation control element is 24 (there are 24 separate deductions per year if the UNITED WAY deduction is processed in the first and second weeks). If the deduction amount is 100 USD per month (frequency factor = 12), the system calculates the per period amount as follows: 1200 USD (100 x 12)/24 = 50.

Note. When you define a deduction with a specific frequency, Global Payroll uses this frequency to annualize the deduction amount. And it uses either pay period frequencies or generation control frequencies to deannualize this amount: if there is no generation control frequency, it uses the pay period frequency; if the element has an associated generation control frequency, it uses the generation control frequency instead.

Note. Although the frequency of the general deductions is Per Calendar Period Frequency, you can modify this definition on the element definition page or at the payee level. The system will then annualize and deannualize the deduction based on the selected frequency option and the generation control element.

Processing a Deduction in the First Segment

PeopleSoft delivers an additional generation control elements that can be used to manage deduction processing:

See Also

Defining Generation Control Elements

Frequency and Generation Control Calculations

Understanding Deduction Recipients

The CREDIT UNION and UNITED WAY deductions are delivered with deduction recipients identified on the Recipient page of the deduction definition component. If you want to complete, modify, or delete the recipient definitions for these deductions, use the recipient definition pages in Global Payroll.

See Also

Defining Recipients

Assigning Recipients to Deductions and Payees

Pages Used to Modify Deduction Schedules and Deduction Recipients

Modifying Deduction Schedules

To modify deduction schedules:

1. Associate the appropriate generation control element with the deduction at the element or payee level.

   For example, associate the delivered generation control GEN GC WEEK 1AND2 with the credit union deduction (CREDIT UNION) on the Calculation page of the deduction definition component, or with a specific payee using the Element Assignments by Payee component.

2. Associate the calendar you are processing with the frequency factor of the generation control element you selected.

   Do this on the Generation Control page of the Calendar component.

   For example, if you process payees weekly and you schedule a credit union deduction to be taken in the first and second week of each month (using the generation control element GEN GC WEEK 1AND2), associate the first and second calendar you process every month with the frequency factor FRST SCND. The generation control element triggers the deduction when the frequency factor associated with the calendar is identical to the frequency factor of the deduction.

   See Defining Generation Control Elements, Using Calendars.

Modifying Deduction Recipients

To modify deduction recipients:

1. Define general and individual recipients on the Deduction Recipients page.

2. Define recipients’ address information on the Recipient Address page.

3. Select recipients’ deposit schedule on the Deposit Schedule page.

4. Link general recipients to a deduction on the Recipient page of the deduction definition component.

See Also

Defining Recipients

Assigning Recipients to Deductions and Payees

Creating New General Deductions

This section discusses:

• Accumulator structure of general deductions.

• Limit processing.

• Termination processing.

• Earnings/deduction assignments.

• User fields.

Note. This section focuses on the CREDIT UNION, UNITED WAY, HOLIDAY FUND, LOAN, and LOAN AD PYMT deductions. Other general deductions are discussed in detail in chapters dedicated to specific deduction types, such as garnishments and bonds.

See Also

Setting Up Garnishment Processing

Assigning Loan Deductions

Assigning Garnishments

Administering U.S. Savings Bond Purchases

Understanding the Accumulator Structure of General Deductions

If you create new general deductions, make sure that they conform to the accumulator structure of the delivered deductions. This is to ensure that the new elements are processed correctly and are included in the appropriate gross-to-net calculations.

Accumulator Structure of General Deductions

This table describes the accumulator structure of general deductions:

Additional Accumulators

The following additional accumulator have been defined for loan and bond deductions:

Note. There are additional accumulators defined for the general deductions. We discuss these accumulators in chapters dealing with specific categories of deductions, such as garnishments and loans.

See Setting Up Garnishment Processing, Setting Up Loan Deductions.

Understanding Limit Processing

Occasionally, you may need to define a deduction that is limited to an annual or monthly goal or is subject to other limit testing.

If you need to define a limit for one of the delivered general deductions or a deduction that you create yourself, follow these steps:

1. Modify or create the deduction.

2. Create a monetary variable to store the limit amount.

   This limit can apply to the deduction itself or to specific payees (if defined at the payee level).

   Define the limit as a supporting element override.

3. Create an accumulator to store the amount that has been deducted to date.

   This deduction can be for any time period.

   The deduction defined in step 1 should be the only member of this accumulator.

4. Create a formula to perform limit processing.

   Use the post-process formula LNS FM PYMTS as a model:

   If LNS FM TERMINATION = 1 Then
       1   >>  SET CURR AMT VAL
       LNS VR GOAL AMT - LOAN PAYMENT - LOAN_ARR   >>  OVRD CURR AMT VAL
       Exit
   Else
       If LOAN PAYMENT + LOAN_ARR + CURR AMT VAL > LNS VR GOAL AMT Then
           1   >>  SET CURR AMT VAL
           LNS VR GOAL AMT - LOAN PAYMENT - LOAN_ARR   >>  OVRD CURR AMT VAL
           Exit
       Endif
   Endif

   This formula, which is associated with the LOAN deduction:

   1. Determines the termination status of the loan recipient.

      If the loan recipient has a termination status of 1 (YES), the formula calculates the LOAN deduction as the total loan amount (LNS VR GOAL AMT) minus the amount repaid (LOAN PAYMENT) minus the arrears amount (LOAN ARR).

      If the loan recipient's termination status is 0 (NO), the formula sums the amount repaid to date (LOAN PAYMENT), the current amount to be deducted (CURR AMT VAL), and the arrears amount (LOAN ARR).

   2. Compares the sum of the preceding elements to the original amount of the loan (LNS VR GOAL AMT). If the sum exceeds the original loan amount, the formula calculates the deduction (loan repayment) as follows:

      Original amount of loan (LNS VR GOAL AMT) minus amount repaid to date (LOAN PAYMENT) minus amount in arrears (LOAN ARR).

5. Enter the formula in the Post Process Formula field on the Calculation page of the Deduction Definition component.

Additional Considerations

When you create a limit testing formula, note that:

• You must replace the variable LNS VR GOAL AMT in the delivered formula LNS FM PYMTS with the variable you create in step 2.

• You must replace the accumulator LOAN PAYMENT in the formula LNS FM PYMTS with the accumulator you create in step 3.

• If you allow the deduction you create to go into arrears, the arrears accumulator for your deduction should replace LOAN ARR.

• If termination processing is not required for the deduction you create, you should eliminate the termination check included in the formula LNS FM PYMTS.

Understanding Termination Processing

Some general deductions require special processing when a payee is terminated.

If you create a deduction that requires termination processing, use the LOAN deduction as a model.

The LOAN deduction references the formula LNS FM TERMINATION within the post-process formula LNS FM PAYMENTS to check the termination status of payees.

The formula LNS FM TERMINATION consists of the following actions and conditions:

If TERMINATION DT <= PERIOD END DATE And TERMINATION DT >= PERIOD BEGIN DATE Then
    1   >>  LNS FM TERMINATION
Else
    0   >>  LNS FM TERMINATION
Endif

Based on the value returned by LNS FM TERMINATION (1[YES] if the payee was terminated in the current period, and 0 [NO] if the payee continues to be active), the system executes the necessary termination processing for the LOAN deduction.

Note. In the formula LNS FM TERMINATION, the termination date is represented by the database system element TERMINATION DT. The pay period begin and end dates are represented by the system computed elements PERIOD BEGIN DATE and PERIOD END DATE, respectively.

See Also

Pre-process and Post-process Formulas

Processing Final Payments

Understanding How to Configure Earnings/Deduction Assignment and Override Components

If you create deductions that use variables or other supporting elements in their calculation, you can modify or replace the standard supporting element override components to facilitate entering the values of these variables and other elements at either the payee or calender ID override levels.

Note. You can modify the standard supporting element override components by adding or changing field labels, prompt tables, and other page elements to better suit the elements you want to override.

See Also

Configuring Element Overrides

Understanding User Fields

When you create a deduction, you can associate it with as many as six different user fields. You can then assign the deduction to the same payee multiple times in a single segment and track each assignment, as well as any associated arrears, separately by user field set.

See Also

Managing Multiple Resolutions of an Earning or Deduction