Understanding Earning and Deduction Elements

Earning and deduction elements enable you to send absence-related data to your payroll system so that payees can be appropriately compensated for time off. Think of earnings as adding to a person's pay and deductions as subtracting from a person's pay. There's little difference between defining earning elements and defining deduction elements.

The payroll system with which Absence Management is integrated determines whether you should create earning elements, deduction elements, or both:

• If using PeopleSoft Payroll for North America, create earning elements.

• If using PeopleSoft Payroll Interface with a third-party payroll system, create earning elements, deduction elements, or both as needed.

After you create earning and deduction elements in Absence Management, you map these elements to their counterparts in your payroll system. The rules that you define in Absence Management should be consistent with the corresponding earning and deduction rules in your payroll system.

When you define an earning or deduction element, you select from one of four calculation rules:

• Unit × rate.

• Unit × rate × percent.

• Base × percent.

• Amount.

An element's calculation rule determines which values the system can transmit to your payroll system after you process absence events.

In most cases, you'll want to select a calculation rule of unit × rate or unit × rate × percent. This enables you to pass the units of paid and unpaid time calculated by the Absence Take process to your payroll system. Absence Management will pass along the retrieved value for rate, percent, and amount, if these are part of the calculation rule, but its does not calculate values for these components.

Saving an element definition causes the system to automatically generate the following components based on the selected calculation rule: unit, rate, base, percent.

Automatically generated components have the same name as the earning or deduction element plus a suffix. For example, if you create the earning element VACATION = Unit × Rate, the system automatically generates two component elements named VACATION_UNIT and VACATION_RATE. Suffix names are determined by the country that you specify for the earning or deduction element on the Element Name page.

Components take on the attributes of the earning or deduction element. If you change the attributes of the earning or deduction element, the component attributes also change. To continue with the previous example, if you change the name of the VACATION earning element to PTO, the system changes the component names to PTO_UNIT and PTO_RATE. The only attributes of a component that you can change directly are the description, comments, customer fields, and the Via Element Overrides option. You make these changes on the Components page.

A component is also an element and can therefore be used in another element's definition. As an example, assume that you define the following elements:

• SICK1 = Unit × Rate.

• SICK2 = Unit × Rate.

• SICK2 Rate = SICK1 Rate.

When the system calculates the rate for SICK2, it uses the rate for SICK1. You don't have to redefine the rate for every new element. No matter how the rate for SICK1 is defined (numeric, formula, and so on), the rate for SICK2 always equals the rate for SICK1.

When you define an earning or deduction element, you can specify which accumulators to create. For example, a year-to-date accumulator for an earning or deduction element. You can base the accumulators on calendar periods, fiscal periods, or both. You can also indicate whether you want to store amounts, units, or both and the periods that you want to store in the accumulator: period-, month-, quarter-, or year-to-date.

Like components, automatically generated accumulators take on the attributes of the corresponding earning or deduction element and use the suffixes that you define on the Earnings and Deductions page of the Element Suffixes component (GP_SUFFIX).