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Administrator Guide
Last Updated: 2025-05-30
Example: Reduce Salary for Time Off and Holidays

Example: Reduce Salary for Time Off and Holidays

This example illustrates how to set up an earning for a worker's salary that's reduced by time off or holiday pay for these payroll countries:
  • USA
  • Canada
  • UK
.
You want to prevent salaried employees from receiving both their full regular wages and time off or holiday pay earnings when they take paid or unpaid leave.
Payroll for France recommends that you create separate deductions for unpaid time off. As a simplification, however, you can directly reduce the salary by unpaid or paid time off.
You need to reduce the earning in a way that considers subperiods and any proration. Example: Midperiod compensation changes and leave events (when you enable PC Proration for leave of absence).
This example only applies when using Absence Management with Workday Payroll.
  • Set up the worker's holiday calendar.
  • Create a
    Salary
     earning based on a compensation element.
  • Create 2 related calculations named
    Hourly Rate
    , and
    Reduction Amount
     with proration set to
    None of the above
    .
  • Create a related calculation named
    Salaried Comp (prorated)
     with proration set to
    Prorate Using Days Worked
    .
Security:
  • Set Up: Calculations - Generic
     in the Core Payroll functional area.
  • Set Up: Time Off (Calculations - Generic)
     in the Time Off and Leave functional area.
  • Set Up: Payroll (Calculations - Payroll Specific)
     in the Core Payroll functional area.
  1. Create an aggregate calculation, named
    Hours Not Worked
     to calculate hours not worked due to time off and holidays.
  2. Access the
    Create Arithmetic Calculation
     task.
    Create a calculation named
    Salaried Comp (prorated) - Reduction Amount
     with these settings:
    1st Operand
    Operator
    2nd Operator
    Salaried Comp (prorated)
    Subtract
    Reduction Amount
  3. Access the
    Create Arithmetic Calculation
     task.
    Create a calculation named
    Hours Not Worked * Hourly Rate
     with these settings:
    1st Operand
    Operator
    2nd Operator
    Hours Not Worked
    Multiply
    Hourly Rate
  4. Access the
    Edit Earning
     task for
    Salary
    .
    1. Enter these settings:
      Option
      Value
      Worker Eligibility
      Pay Rate Type <> Hourly as of PS Date
      Calculation Proration
      Prorate Using Days Worked
      Calculation
      Salaried Comp (prorated) - Reduction Amount
      Events Causing Pay Component Proration
      Compensation Change
      Compensation Element
      Select the worker's salary compensation element.
    2. Add 3 rows to the
      Related Calculations
       section.
      Related Calculation
      Override Calculation
      Reduction Amount
      Hours Not Worked* Hourly Rate
      Hourly Rate
      Enter a calculation to retrieve a worker's hourly rate.
      Salaried Comp (prorated)
      Compensation: Compensation Element Value (using Pay Period Frequency Only - No Rounding)
Workday reduces the worker's salary for the period by payments for time off and holidays. When the worker has multiple subperiods, or proration, Workday:
  • Prorates the salaried amount for each subperiod.
  • Calculates the reduction amount for each subperiod based only on the time off and holidays in the period.
Create earnings for paid time off and holiday pay.