Understanding Global Payroll for Mexico

This chapter discusses:

• Global Payroll for Mexico.

• Global Payroll for Mexico business processes.

• Delivered elements for Mexico.

• Element naming conventions in Mexico.

• Viewing delivered elements for Mexico.

Global Payroll for Mexico

Global Payroll for Mexico is a country extension of the core Global Payroll application. It provides you with the payroll rules, elements, and absence processes that are needed to run a Mexican payroll.

Global Payroll for Mexico Business Processes

Global Payroll for Mexico supports these business processes:

• Earnings.

  Global Payroll for Mexico enables you to define and process different types of earnings, including base salary, bonuses, commissions, overtime, profit sharing (PTU), food coupons, vacation premiums, savings funds, and seniority pay. You can also determine the taxable and nontaxable portion of each earning and deduction, such as for overtime, vacation premium, Sunday premium, savings fund, and Christmas bonus.

  See Tracking Earnings.

• Christmas bonus.

  You can calculate the Christmas bonus, (Aguinaldo), that is given to employees. Bonus amounts are based on the length of service and salary and are prorated according to worked days during the year.

  See Defining Earnings.

• Average salary.

  Global Payroll for Mexico calculates the average salary based on previous balances or periods. The result of this can be used as a base calculation for earnings and deductions.

  See Tracking Earnings.

• Profit sharing (PTU).

  You can calculate amounts due to employees as a result of profit sharing. Profit sharing payments are based on two parts: the employee's salary and the worked days from the profit generating year. You can define the profit sharing (PTU) parameters, such as the amount to share, maximum salary, and number of days for temporary employees to be considered into the process. You can generate four different reports for the PTU, including Profit Sharing Project, Eligible Employees, Non-Eligible Employees, and Unpaid Employees.

  See Tracking Earnings.

• Overtime.

  You can define the maximum number of double hours per day, the maximum number of occurrences by week, or the maximum number of double hours per week. You can create an annual overtime calendar. You can also record daily and weekly overtime hours for employees, including overtime hours, days off worked hours, and holiday hours. You can generate two overtime reports: one with detail and one without detail.

  See Tracking Overtime.

• Deductions.

  Global Payroll for Mexico enables you to define and process many different types of deductions for Mexico including before tax, after tax, and nontaxable deductions. Examples of deductions include union fees, parking dues, absences, personal loans, and deductions based on seniority. You can also set up and track provisions, which are accrued expenses, for vacations, vacation premiums, Christmas bonuses, and IMSS (social security) quotas.

  See Defining Deductions.

• Social security.

  Global Payroll for Mexico enables you to calculate and process different aspects of social security, including IMSS (social security), SAR (retirement), and INFONAVIT (housing). You can calculate IMSS quotas for employers and employees and the fixed, variable, and hourly integrated daily salary (SDI). You can generate several social security reports and interfaces, including the SUA Payee Load interface, SUA Transactions interface, IMSS Hire notification, IMSS Termination notification, IMSS Salary Modification notification, Variability report, Work Risk Disabilities report, and the Base Over Cap report.

  See Updating Social Security Contributions.

• Federal and state taxes.

  You can define and process federal and state taxes. Examples of federal taxes that you can process include the Monthly tax (Art. 113, 114, and 115), Annual tax (Art. 177, 178, and 116), Termination taxes (Art. 112), and other special tax calculation methods, such as RISR 86 and Multiple Months earnings (Art. 91). You can also define which earnings and deductions are eligible for the state tax base according to each state's laws, including those for the most complex state taxes, such as Ciudad Juárez (Chihuahua), Hidalgo, Guerrero, and Chihuahua.

  See Managing Taxation.

• Annual adjustment.

  Global Payroll for Mexico enables you to process year-end calculation of taxes and determine whether the company withheld the correct amount of taxes during the monthly process. Excess withholding can be used to offset withholding for December and the following months. However, the difference can be discounted in a single deduction or multiple deductions, depending on parameters that are provided.

  See Managing Taxation.

• Subsidy factor.

  You can calculate the subsidy proportion of taxes that will apply to employees in the following calendar year. You can set up subsidy factor parameters for your company, calculate the subsidy factor, and generate a Subsidy Factor report. Additionally, a separate process exists that calculates the subsidy factor, which the user enters in the Company table. Payroll then generates federal taxes based on this subsidy factor.

  See Managing Taxation.

• Absences.

  You can track and define different types of absences, including maternity leave, general illness, work risk, work related illness, and in transit work risk. You can create rules for other types of absences, such as for paid-permitted and unpaid-permitted, overlapping absences (such as illness during vacation), subsidy rules, and mass absences. You can also generate an absence report and a Risk Factor report, which lists the employees who were on disability due to work-related illnesses or accidents during the year.

  See Updating Absences.

• Vacations.

  Global Payroll for Mexico enables you to record and track vacations. You can generate vacation entitlements, create mass vacation takes, handle negative entitlement balances, track accrued vacation premiums for financial reporting, process vacation pay, and generate a vacation report with or without employee detail.

  See Updating Absences.

• Termination pay.

  You can calculate the final check amount for terminated employees. The system enables you to define different termination versions and which earnings and deductions are considered in each version. You can also define which termination versions are linked with each Job/Action reason. Global Payroll for Mexico provides two sample letters for the termination and layoff process.

  See Processing Terminations.

• Garnishments.

  Global Payroll for Mexico enables you to define and process garnishments. This includes defining the recipient information and handling the most complex requirements, such as multiple garnishments by an employee with different rules and priorities. Global Payroll for Mexico provides the five most common types of garnishment rules, including fixed amount, net pay percentage, total earnings minus tax percentage, total earnings percentage, and specific earnings minus corresponding tax percentage.

  See Understanding Garnishments.

• Results adjustments and reversals.

  Global Payroll for Mexico enables you to identify an employee whose check is going to be reversed for a particular calendar and adjust or reverse a check that was already paid to the employee.

  See Defining Results Adjustments and Reversals.

• Gross up earnings.

  Global Payroll for Mexico provides two earnings elements that are used for paying a net amount to payees. Starting from the net amount, the system determines the gross amount to process so that after tax deductions have been made, the required net amount remains.

  See Understanding Net-To-Gross Payments.

• Payslips.

  You can generate payslips using Global Payroll for Mexico. You can specify the printing order, which earnings and deductions should be printed, and a range of employees to generate their payslips. Sometimes, defining the earnings and deductions that you want excluded on the payslip is easier than defining all the earnings and deductions that you want included. If this is the case, you can define your earnings and deductions this way. Global Payroll for Mexico gives you the choice to set up payslips in the way that works best for your business processes. If you purchased PeopleSoft Enterprise ePay, you can have employees view their payslips online.

  See Creating Payslips.

  See Managing Pay Information for Global Payroll.

• Banking.

  You can define source bank and payee bank information. You can run the banking process and specify payment instructions to the bank. The system generates flat files for the top five Mexican banks: Banamex, BBVA Bancomer, Banorte, HSBC, and Scotiabank.

  See Processing Banking.

Delivered Elements for Mexico

Global Payroll defines each business process for Mexico in terms of delivered elements and rules. Some of these elements and rules are specifically designed to meet legal requirements, while others support common or customary payroll practices.

This section discusses:

• Delivered element creation.

• Element ownership and maintenance.

Delivered Element Creation

All of the elements that are delivered as part of this country extension were created using the core application, the same application that you use to create additional elements and (in many cases) to configure existing elements that are delivered as part of Global Payroll. Because the tools that are needed to redefine or create new payroll elements are fully documented in the core application PeopleBook, this information does not appear here. Instead, the documentation briefly reviews the relationship between the core application (which contains the tools that you need to define your own elements) and the country extensions (which contain country-specific rules and elements that are defined by PeopleSoft).

The core application:

• Consists of a payroll rules engine.

  The payroll rules engine is a flexible tool that enables you to define the rules of your payroll system and to run payroll and absence calculations. Global Payroll does not embed payroll-specific logic or computations in application code. Instead, it specifies all business application logic (such as earnings, deductions, absences, and accumulators) in terms of payroll rules. Global Payroll enables you to enter and maintain payroll rules through a set of pages and offers comprehensive features that enable you to work in your preferred language or currency.

• Provides a payroll processing framework.

  The payroll processing framework provides a flexible way to define and run payroll and absence processing flows (such as calendars, run types, pay periods, and process lists).

Country extensions:

• Are built using the core application.

• Consist of statutory and customary objects (country-specific payroll rules, elements, payroll processes, reports, pages, and self-service applications).

Element Ownership and Maintenance

This section describes PeopleSoft's approach to element ownership and what this means for the maintenance of Mexican payroll rules. This information helps clarify which parts of the system you might be required to maintain, what you can modify, and what parts of the system you cannot change.

Element Ownership in Global Payroll

Five types of element ownership are in Global Payroll:

Element Ownership in Global Payroll for Mexico

Of the five ownership types described here, only these two are used to define Mexican elements:

• PS Delivered/Maintained.

• PS Delivered/Not Maintained.

Although Global Payroll for Mexico delivers some elements as PS Delivered/Maintained, the large majority of elements are designated PS Delivered/Not Maintained. This enables you to modify, update, and reconfigure delivered elements to meet your own unique requirements.

This table contains an element-by-element description of the Global Payroll for Mexico approach to element ownership and maintenance.

Element Naming Conventions in Mexico

Understanding the naming convention that is developed for PeopleSoft-delivered elements can help you determine the element type, the functional area that it serves, and how it is used.

This section discusses:

• Naming conventions.

• Functional area codes.

• Element type codes (PIN_TYPE).

Naming Conventions

This section discusses the naming conventions for:

• Primary elements.

• Supporting elements.

• Component names (suffixes).

Additional information about abbreviations that are used in Mexican elements is also discussed in this section.

Primary Elements

Primary elements (such as earnings, deductions, absence take, and absence entitlement elements) do not contain functional area codes or element type codes in their names. Primary elements have names that identify their functions and element types without the use of additional codes. For example, the name of the earnings element SDO POR HORA identifies this element as earnings (SDO [Sueldo]), and more specifically, as an hourly salary element (por hora).

Supporting Elements

For supporting elements (such as variables, formulas, dates, and durations), PeopleSoft uses this naming convention: FF TT NAME.

• FF: Functional area code.

  See Functional Area Codes.

• TT: Type of supporting element.

  See Element Type Codes (PIN_TYPE).

• NAME: Based on a term in Spanish and provides a further means of identifying the element.

For example, in the variable IE VR ESTADO GC:

• IE represents the functional area (state taxes [Impuestos Estatales]).

• VR represents the element type (variable).

• ESTADO GC provides a further means of naming the element (variable identifying the state [estado] used in generation control [GC]).

Note. This naming convention applies to these element types: arrays, brackets, counts, dates, durations, formulas, rate codes, variables, historical rules, fictitious calculation rules, proration rules, rounding rules, writable arrays, and generation control conditions.

Component Names (Suffixes)

In Global Payroll for Mexico, suffixes are used to name the components of earnings and deduction elements. For example, when you create an earnings, deduction, or absence element in Global Payroll, you must define the components that make up the element, such as base, rate, unit, and percentage. The system automatically generates the components and accumulators for the element based on the calculation rule or accumulator periods that are used. The system also names the components and accumulators by appending a suffix to the element's name.

For example, suppose that you define the earnings element named EARN1 with this calculation rule:

EARN1 = Rate × Unit

The system automatically creates two additional elements for the components in the calculation rule:

• Rate element: EARN1_RATE.

• Unit element: EARN1_UNIT.

The system creates suffixes to name the components of the element (_RATE and _UNIT).

In Global Payroll for Mexico, all components and accumulators have:

• Country: MEX

• Separator: _

In Global Payroll, all suffixes fall into one of these types:

• Separator.

• Earnings or deductions component suffixes.

• Earnings or deductions accumulator suffixes.

• Deduction arrears component suffixes.

• Deduction arrears accumulator suffixes.

• Deduction recipient suffixes.

• Absence entitlement component suffixes.

• Absence entitlement accumulator suffixes.

To view all of the suffixes that are defined for Mexico, use the Element Suffixes page in Global Payroll (core application).

See Defining General Element Information.

Additional Information About Abbreviations Used in Mexican Elements

Many Mexican elements contain abbreviations that provide additional information about their use in the system (beyond that provided by functional area codes or element type codes). For example, Global Payroll for Mexico delivers the duration element GN DR AÑOS SERV. While the functional area code GN indicates that this element is used across various functional areas (it has general [GN] relevance) and the element type code DR identifies it as a duration element, the abbreviation AÑOS SERV (Service Years [Años de Servicio]) provides additional information about how the element measures time. As you become more familiar with the payroll rules that are created for Mexico, these abbreviations can help you further identify and understand the role that is played by each element.

This table lists the most common abbreviations that are used in the names of Mexican elements.

Functional Area Codes

For some elements, you need to use a functional area in the naming convention. The two-digit functional area codes are used in naming conventions to identify the functional area where the element is being used.

This table contains the functional area codes that are used in the names of Mexican elements.

Element Type Codes (PIN_TYPE)

This table contains codes for all of the element types. Because not all element types are delivered for Mexico, not all of these codes appear in the names of Mexican elements.

Archiving Data

Global Payroll for Mexico generates a large amount of result data. To keep the amount of saved data manageable, you should periodically archive it. PeopleSoft Enterprise PeopleTools delivers an archiving tool called the Data Archive Manager. To aid you in archiving your result data using the Data Archive Manager, Global Payroll for Mexico delivers a predefined archive object (GPMX_RSLT_ARCHIVE) and an archive template (GPMXRSLT). The delivered archive template uses queries that select data by calendar group ID (CAL_RUN_ID field).

Note. Please use extreme caution when making changes to delivered archive objects, queries, or templates. Any modifications can result in the loss of important data.

See Archiving Data.

Viewing Delivered Elements for Mexico

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements that are designed for Mexico. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

See Also

Understanding How to View Delivered Elements