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Administrator Guide
Last Updated: 2024-03-08
Concept: Calculated Plans for Compensation

Concept: Calculated Plans for Compensation

Compensation administrators can create powerful compensation plans based on customized calculations.

Calculations

Calculated compensation plans rely on calculations created on the
Create Arithmetic Calculation
,
Create Conditional Calculation
, or other tasks. Calculations can be simple, such as a constant value, or very complex with nested operations.
You must create calculations in the
Compensation
 category to use them in Compensation. Workday recommends not modifying calculations in other categories because doing so might negatively affect other Workday product areas.
You can create calculations using a wide variety of Workday-delivered report fields and Instance Value Calculations within the
Compensation
 category.

Calculated Plans

After you create calculations, use the
Create Calculated Plan
 task to associate your calculations with plans. Calculated plans can be of 2 types, dynamic or event-driven. Each work differently depending on whether they're Managed by Basis Total (MBT):
Dynamic
Event-Driven
MBT
Workday updates plan assignment amounts when:
  • A compensation event occurs.
  • You run the
    Calculated Plan Assignment Updates by Position
     operation type on the
    Mass Operations Management
     task.
Workday creates new effective-dated events each time the amount is updated.
Workday doesn't calculate a negative target percent calculation or ceiling amount calculation when the calculated plan is salary dependent.
Non-MBT
Workday updates plan assignment amounts whenever you view the plan assignment.
Workday doesn't generate new compensation events when plan amounts change.
You can't use the
Mass Operations Management
 task to update plan assignment amounts.
Workday is able to calculate a negative target percent calculation or ceiling amount calculation when the calculated plan is salary dependent.
Workday updates plan assignment amounts when:
  • A compensation event occurs.
  • You run the
    Calculated Plan Assignment Updates by Position
     operation type on the
    Mass Operations Management
     task.
Workday creates new effective-dated events each time the amount is updated.
Workday doesn't calculate a negative target percent calculation or ceiling amount calculation when the plan is salary dependent.
You can then:
  • Assign calculated compensation plans to employees like other compensation plans.
  • Use plans as part of a compensation basis.
  • Use plans for MBT employees and non-MBT employees.
    Calculations based on commission plans, remainder plans, or nonfixed salary plans won't be accurate for MBT scenarios.
  • View or update data in the
    Other
     section in Compensation reports and transactions, and in staffing transactions that include compensation. Example: During a
    Request Compensation Change
     business process, Workday displays a list of compensation plans for the employee. You open the
    Other
     section to display any calculated plans assigned to the employee.
Calculated plans for MBT employees can't have dependencies on commission plans or remainder plans.
Unlike other compensation plans, Workday doesn't remove calculated plans with a zero value. Workday can recalculate zero value calculated plans when compensation transactions, or staffing transactions that include compensation, change the value.
For dynamic plans not part of the Primary Compensation Basis, Workday updates assignment amounts for MBT employees. However, Workday only changes the effective date if the event requires a recalculation.
Workday can't process salary-dependent calculated plans that:
  • Use a subtractive calculation compensation basis and a salary plan.
  • Use a guaranteed  calculation compensation basis for MBT workers.
  • Include plans with a ceiling and maximum salaries that don't equal 100%.
  • Include plans without a target percent in the calculated plan and where the compensation element is in a base pay group.

Calculated Plan Assignment Updates by Position

For MBT employees, Workday updates calculated plans when performing top-down calculations. You can also update calculations on a schedule using the
Mass Operation Management
 task.
Create a calculated plan that adds a fixed amount to the salary of each employee for every year of service. Use the
Create Arithmetic Calculation
 task to create a calculation that multiplies years of service (using a Workday-delivered report field) by a fixed Accrual amount set up as a Constant Value. Then use the
Mass Operation Management
 task and the
Calculated Plan Assignment Updates by Position
 operation type to update these employees once each year.