Understanding Global Payroll for Japan System Setup
This section provides general information about how we set up the delivered elements in Global Payroll for Japan. It also provides some notes and cautions about using and configuring the system.
This section discusses how to:
Use base pay and other PeopleSoft HR data.
Define pay entity.
Set up pay types.
Set up calendar group IDs.
Understand retroactive pay calculations.
Use the delivered writable arrays.
Set up monthly salary earning attributes.
Set up bonus earning attributes.
Set up variables for time tracking.
Your Global Payroll for Japan application is designed to use company data and employee personal and job data that is entered in your HR application. We provide the necessary Global Payroll rules, Structured Query Reports (SQRs), and application engine programs to manage the HR data that is needed for payroll processing.
Mapping Base Pay Rate Codes
In calculating base pay, Global Payroll for Japan uses the employee's compensation package that you define using compensation rate codes in HR. As sample data, we deliver three generic rate codes for Global Payroll for Japan (J08–J10) and map them to three generic base pay rate codes in HR (J08-J10). Add, remap, and modify these rate codes as required, as long as the HR rate codes that you map to have the Base Pay check box selected on the Comp Rate Code table.
The pay entity is a legal definition of an organization from a payroll perspective; it is the organization that is responsible for making payments to payees. Often, the organization and the pay entity are the same. Use the Pay Entity component in the core Global Payroll application to define pay entities for your organization.
If your social insurance establishments, labor insurance establishments, and tax establishments for income tax and inhabitant tax are smaller organizations than the pay entity, define them on the Tax Establishment page described in this topic. You must have at least one tax establishment defined for social insurance, labor insurance, income tax, and inhabitant tax even if the pay entity as defined is the same as each of these establishments.
Global Payroll for Japan uses the variable ER VR PAY TYPE to identify the employee's pay type. As delivered, the formula ER FM BASE RATE assigns the value of this variable according to the employee's compensation frequency on the Job Data Compensation record in HR. Valid HR compensation frequencies for Japan are:
Term |
Definition |
|---|---|
M (monthly) |
Monthly salaried employees who are not subject to overtime payment. |
JM (daily-monthly) |
Monthly salaried employees who are subject to overtime payment. |
D (daily) |
Employees who are compensated on a daily basis. |
H (hourly) |
Employees who are compensated on an hourly basis. |
Note: You should verify that monthly salaried employees who are subject to overtime payment are assigned the JM frequency on the Job Data-Compensation page in HR.
Set up calendar group IDs that are meaningful to your organization and payroll processing periods. Each calendar group can have only one run type, which means that you must set up a unique calendar group ID for each regular, bonus, year-end tax adjustment, or retirement allowance pay run. As sample data, PeopleSoft provides six run types for Japan: salary, bonus, year-end adjustment on bonus, year-end adjustment on salary, independent year-end adjustment, and retirement allowance.
The Global Payroll for Japan application provides the necessary elements for processing retroactive changes in base salary. The following list summarizes how the application processes retroactive changes:
The trigger for retroactive base salary processing is any change in the HR Job Data Compensation record (COMPENSATION).
Because this record is a child of the Job Data record, changes in both the Compensation record and the Job Data record trigger retroactive processing.
These elements are adjusted for retroactive processing:
ER BASE PAYM
ER BASE PAYD
ER BASE PAYH
ER OVERTIME
ER OT ABVLMT
ER NIGHT
ER HOLIDAY
ER HOLNIG
ER TAED RED
ER SPLE RED
ER ABS RED
ER SCLE RED
SC REM S01
SC REM S02
SC REM S03
SC REM S04
SC REM S05
SC REM S06
SC REM S07
SC REM S08
SC REM S09
SC REM S10
SC REM S11
SC REM S12
Social insurance processing tracks retroactive changes when calculating monthly remuneration and when determining eligibility for occasional revision.
Note: When you add a retroactive data row in HR records, you should place your cursor in the row of data that you want carried forward into your new row. You must manually update any existing data rows that come after your inserted row if you want your new data to be carried forward into the remaining rows of the table.
Payment Keys
Japan organizations should not use payment keys when configuring payroll for Japan.
Caution About Element Segmentation
You should not use the segmentation feature of Global Payroll. If you use segmentation, review all of your report output thoroughly for accuracy; segmentation could impact the data that is being reported.
Global Payroll for Japan delivers the following writable arrays
GPJP Writable Array (GPJP_WA).
This array stores data that is used in PeopleSoft Application Engine and SQR programs.
Social Insurance Salary Report Writable Array (GPJP_WA_SC_RPT_SAL).
This array stores salary data used to create social insurance reports.
Social Insurance Bonus Report Writable Array (GPJP_WA_SC_RPT_BON).
This array stores bonus data used to create social insurance reports.
When you create a new earning element for Global Payroll for Japan, you must also set up the attributes. Monthly salary earnings have the following attributes:
Taxable (or nontaxable).
Cash (or non-cash).
Cash remuneration (or non-cash remuneration).
Wage.
Fixed wage.
Basis of overtime pay calculation.
Basis of pay-cut calculation.
You set up these attributes by adding the earning element to the appropriate accumulators.
|
Attribute |
Accumulator |
Description |
|---|---|---|
|
Taxable Nontaxable |
ER AC TAX PAY SAL ER AC NTAX PAY SAL |
Total amount of taxable salary pay. Total amount of nontaxable salary pay. |
|
Cash salary Non-cash salary |
ER AC CASH SAL ER AC NCASH SAL |
Total amount of cash salary. Total amount of non-cash salary. |
|
Cash remuneration Non-cash remuneration |
ER AC CASH REM SAL ER AC NCSH REM SAL |
Total amount of cash remuneration from salary. Total amount of non-cash remuneration from salary. |
|
Wage |
ER AC TTL WAGE SAL |
Total amount of salary wages. |
|
Fixed wage |
ER AC FIX WAGE SAL |
Total amount of fixed salary wages. |
|
Basis of overtime pay calculation |
ER AC PRM BASE SAL |
Overtime premium salary amount. |
|
Basis of pay-cut calculation |
ER AC RED BASE SAL |
Reduction base salary amount. |
For example, if an earning element were taxable, non-cash, remuneration, wage, fixed wage, and the basis of overtime pay calculation, you would add the element to the following accumulators: ER AC TAX PAY SAL, ER AC NCASH SAL, ER AC NCSH REM SAL, ER AC TTL WAGE SAL, ER AC FIX WAGE SAL, ER AC PRM BASE SAL.
When you create a new bonus earning element for Global Payroll for Japan, you must also set up the attributes.
|
Attribute |
Accumulator |
Description |
|---|---|---|
|
Taxable |
ER AC TAX PAY |
Total amount of taxable bonus pay. |
|
Wage |
ER AC TTL WAGE BON |
Total amount of bonus wages. |
|
Cash Non-cash |
ER AC CASH BON ER AC NCASH BON |
Total amount of cash bonus. Total amount of non-cash bonus. |
|
Cash remuneration Non-cash remuneration |
ER AC CASH REM BON ER AC NCASH REM BO |
Total amount of cash remuneration from bonus. Total amount of non-cash remuneration from bonus. |
For a bonus earning, the element must be taxable and wage. You must always add the bonus earning element to the following accumulators: ER AC TAX PAY BON (total amount of taxable bonus pay), ER AC TTL WAGE BON (total amount of bonus wages). Additionally, you must add cash bonuses to ER AC CASH BON and ER AC CASH REM BON. You must add non-cash bonuses to ER AC NCASH BON and ER AC NCASH REM BO.
You must configure the delivered variables to conform to your organization's business rules. Then you can enter time data for each employee each pay period before running payroll.
Here's how you set up variables:
Configure variables for overtime and absence.
PeopleSoft delivers four variables for overtime and four variables for pay cut due to absence. You can add additional variables to track additional types of overtime or absence.
PeopleSoft delivers five additional variables for tracking time data, such as PTO take and compensatory day off. We also deliver a "dummy" earning for each of these variables to enter the time data through positive input.
Remember to create corresponding variables for the overtime premium ratio and reduction ratio.
If you use the variables that you added to calculate overtime pay, pay-cut for absence, or any other pay calculations, remember to create or modify formulas and other rules accordingly.
Change the delivered value of the variable AO VR PR PRI FLAG if your organization deducts PTO from the current year first.
Change the delivered value of the variable AO VR ENT MONTHS if your organization entitles PTO as of a month other than October.
Set up your PTO entitlement schedule.
PeopleSoft delivers four variables for scheduling PTO entitlement according to length of service.
Add new variables and define rules to evaluate length of service if necessary to conform to your organization's entitlement schedule.
Define the amount of PTO entitlement that is associated with each variable.
Change the default value of the variable AO VR PTO EXP FLAG if unused PTO for the previous year expires at PTO entitlement.