Concept: Benefit Credits and Surcharges

Workday delivers a flexible framework for applying benefit credits and surcharges. You can create benefit credits and apply them to a:

Workday applies benefit surcharges to coverage targets on health care plans and rates when:

The employee elects coverage for a spouse or domestic partner who has the
This person is or could be enrolled in Health Care coverage elsewhere
check box selected.
The employee indicates that the employee and 1 or more dependents use tobacco.

You create the benefit credits based on Workday-delivered benefit credit types. These delivered benefit credit types are based on dependent, employee, and enrollment information. They provide a wide range of criteria by which you can award amounts. Examples:

You can group individual benefit credits into benefit credit bundles. The applied amount of the credit is the total of the individual benefit credits. Once you define and assign your benefit credits and surcharges, Workday applies them to eligible employees.

Benefit credits are cumulative: Total cost of benefits and any surcharges - Total number of benefit credits = The total cost to the employee.

If there’s an excess of credits, Workday applies that amount to the employee's taxable income.

When an employee eligibility change affects a credit or surcharge amount, Workday automatically reflects it in the employee's total cost of benefits. Workday automatically updates the employee's total benefit cost and notifies Workday Payroll and the Payroll Interface:

For an added, updated or deleted credit from a benefit group, coverage type, or benefit plan.
For a changed or deleted healthcare rate.

This table illustrates the relationship between Benefits, Payroll, and Payroll Interface:

Benefits	Relationship	Payroll / Payroll Interface
Benefit Costs Medical Life Retirement Savings Additional Benefit Surcharges	Sent as Deductions	Deductions Medical Life Retirement Savings Additional Benefit Surcharges
Benefit Credits Medical Life Retirement Savings Additional	Sent as Earnings	Earnings Medical Life Retirement Savings Additional
Excess Credits (if credits exceed costs)	Added to Taxable Income	Taxable Income