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Administrator Guide
Last Updated: 2023-06-23
Set Up Proration Calculations

Set Up Proration Calculations

Security:
Set Up: Payroll (Calculations - Payroll Specific)
 domain in the Core Payroll functional area.
When a midperiod change creates subperiods, you can configure Workday to prorate the pay component and related calculation amounts in each subperiod.
When configuring proration calculations, ensure that you define a proration method for both the pay component and the relevant related calculations.
  1. Access the
    Edit Earning
     or
    Edit Deduction
     task.
  2. As you configure the
    Calculation Proration
     section, consider:
    Option Description
    Prorate Using Days Worked
    Prorates by the formula: (Number of days worked in the subperiod)/(Number of working days in the full period).
    Example: You hire a worker on 6/5 with a 6/1 - 6/15 period for a semimonthly payroll. With 11 working dates from Monday - Friday, Workday uses a proration factor of 7/11.
    Workday refers to an employee's assigned work shift to determine the number of work days to use in the proration factor. When you don't assign a work shift, Workday uses Monday through Friday as work days.
    Prorate Using Calendar Days
    Dependent on the number of days in the month.
    Example: For a person hired mid month for June payroll, Workday uses a proration factor of 15/30 for the monthly period.
    Prorate Using Annual Working Days
    Prorates using the formula: (Days Worked * Periods in the Year) /(Annual Days * (Days in Work Shift/5)).
    Define the annual days for the proration factor in the
    Calculation for Annual Days Worked
     prompt.
    Workday uses an employee's work shift to determine:
    • The days worked.
    • The proration factor denominator.
    When you don't assign a work shift, Workday uses Monday through Friday as work days.
    Example: You define 260 annual days worked for a full-time position working Monday through Friday. For an employee hired mid month for a monthly payroll, Workday uses a proration factor of (11*12)/(260).
    Workday doesn't support the
    Prorate Using Annual Working Days
     option when:
    • Managing midperiod labor costing. Workday uses calendar days instead (CAN, FRA, IRL, UK, USA).
    • Allocating an FLSA bonus across employment. Workday uses the number of FLSA periods within coverage dates instead (USA).
    None of the above
    No proration. Workday processes the pay component in full in each subperiod. To process the pay component only once per pay period, select 1 of these calculations in the
    Worker Eligibility
     grid:
    • Pay Component: Not Previously Paid in Period
    • Pay Component: Not Previously Paid in Period (by Company)
    For Payroll for Australia, Workday recommends you choose this option.
  3. As you complete the task, consider:
    Option Description
    Events Causing Pay Component Proration
    By default, Workday doesn't prorate midperiod compensation changes. Select
    Compensation Change
     to enable pay component proration for a midperiod change to a worker's compensation.
    By default, Workday applies gross-to-net proration for leaves of absence. When enabled on the
    Maintain Payroll Proration Override
     report, you can select
    Worker-based Leave
     to use pay component proration for a leave of absence. To do so, you must identify a country in the earning.
    For Payroll for Australia, Workday doesn't apply proration by default for leave of absences. Workday recommends that you enable leave of absence as a pay component proration event, and then select worker-based leave for the leave of absence.
    Payroll for Ireland only supports pay component proration. Workday doesn't prorate PRSI insurable weeks for workers on unpaid leaves of absence. You need to adjust the insurable weeks manually. See Add Payroll Input for Workers.
    Compensation Element
    When setting up pay component proration for a midperiod compensation change, select the compensation element for the earning.
  4. Set the proration method for the related calculations listed in the
    Related Calculations
     grid.
    For Payroll for Canada, France, Ireland, the UK, and the U.S.:
    1. Select
      Related Calculation
      Edit
       from the related actions menu of a related calculation.
    2. On the
      Value
       tab, select a proration method.
      Ensure that you select a proration method that is consistent with the proration method for the pay component.
      For earnings and deductions with the
      Prorate Using Annual Working Days
       proration method, select 1 of these methods for the related calculations:
      • Prorate Using Days Worked
      • Prorate Using Calendar Days
    For Payroll for Australia, Workday recommends that you configure proration in the Pay Component Related Calculations. When you configure calculations for a Pay Component Related Calculation, you can use Workday delivered calculations to derive the values for a sub-period. For example:
    • PC Sub Period: Scheduled Working Hours, excluding non-working time, in a Sub Period as per Worker's Schedule
    • Job: Weekly Scheduled Hours (as of Sub Period End Date)
    • Compensation: Compensation Element Value (using PC Freq Override - No Rounding)
When you calculate payroll, Workday prorates pay component values across subperiods and rounds the:
  • Proration factor to 6 decimals. Workday rounds 0.0000005 and above up, and below 0.0000005 down.
  • The final result based on the rounding rule defined for the calculation. When there’s no defined rounding rule, Workday rounds the final prorated result to 2 decimals. Workday rounds 0.005 and above up, and below 0.005 down.
For Payroll for the U.S., Workday uses separate rounding logic for multiple work jurisdiction allocations for payroll input.
You can access the
Edit Calculation Proration and Events Causing Pay Component Proration
 task to verify and edit proration settings for all earnings or deductions.
If you configured proration calculations in Pay Component Related Calculations, you can access the
Edit Earning
 or
Edit Deduction
 task to verify and edit the proration settings.