Concept: Pay Component Proration Calculation

When a primary pay component references another pay component (Example: Base Pay references Holiday Pay), you must select the

Target Single Subperiod for a Prorated Pay Component

check box on the

Create Pay Component Group

or the

Create Pay Accumulation

task. Selecting this check box sets the referenced pay component (Example: Holiday Pay) to target a single subperiod of the prorated primary pay component.

If you enter the reference pay component via a pay input and the input end date is within the period; Workday uses the input end date.

Example:

Jake Lee has a midperiod compensation change on 1/10/24. There’s a pay input for a holiday on 1/1/24. Base Pay is configured for pay component proration on a compensation change and Holiday Pay isn’t. Workday calculates:

Primary pay component Base Pay subperiod 1 (1/1-1/9).
Primary pay component Base Pay subperiod 2 (1/10-1/31).
Reference pay component Holiday Pay entered via input (start and end date is 1/1) will target primary pay component subperiod 1.

If you don't enter the referenced pay component via input or the input end date is outside of the period; Workday uses the subperiod of the reference pay component or period end date to determine the target subperiod of the primary pay component.

Example:

Jake Lee has a midperiod compensation change on 1/10/24. There’s a holiday on 1/1/24. Base Pay is configured for pay component proration on a compensation change and Holiday Pay is not. Workday calculates:

Primary pay component Base Pay subperiod 1 (1/1-1/9).
Primary pay component Base Pay subperiod 2 (1/10-1/31).
Reference pay component Holiday Pay not entered via input will have a period end date of 1/31, and will target primary pay component subperiod 2.

When the reference pay component subperiod or period end date doesn't fall into a subperiod of the primary pay component, Workday applies the reference pay component to the first subperiod of the primary pay component.

Example:

Jake Lee's:

Primary pay component (Base Pay) proration events: Compensation change and Leave of Absence.
Reference pay component (Holiday Pay) proration events: None
Pay Group: Executive (Monthly)
Pay Period: 1/1/24 - 1/31/24

Sequence of events:

January 1st is a Holiday
Jake Lee goes On Leave effective 1/5
Return from Leave effective 1/10
Compensation Change for Jake Lee effective 1/15
Jake Lee goes On Leave effective 1/31
Return from Leave effective 2/1

Workday Calculates:

Base Pay subperiod 1: 1/1 - 1/4
Base Pay subperiod 2: 1/10 - 1/14
Base Pay subperiod 3: 1/15 - 1/30
Holiday Pay has no subperiod, so period end date is 1/31
Reduction wages for holiday pay is applied to the Base Pay subperiod 1/1 - 1/4