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Administrator Guide
Last Updated: 2023-06-23
Example: Create Deductions for New Hires and Terminated Employees (FRA)

Example: Create Deductions for New Hires and Terminated Employees (FRA)

This example illustrates how to create a deduction to reduce a worker's earnings based on:
  • The worker's calendar schedule.
  • The time not worked in a full period, due to termination or hire.
Global Modern Services:
  • Pays workers monthly salaries.
  • Uses worker schedules to manage the number of days and hours a worker normally works in a month.
For workers hired or terminated in the middle of a payroll period, you want to reduce the worker's monthly salary for the time not worked. To calculate the reduction amount, you want to:
  • Use the worker's calendar schedule to prorate the monthly salary based on the unworked hours.
  • Convert the prorated amount to a daily rate based on unworked calendar days.
  • Set up a
    Base salary
     earning for monthly salaries.
  • Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  1. Access the
    Edit Earning
     task, for the
    Base salary
     earning and select
    None of the above
     in the
    Calculation Proration
     section.
  2. Access the
    Create Deduction
     task and enter these settings:
    Field
    Setting
    Name
    Reduction for Days Not Worked
    Code
    Days Not Worked
    Effective Date
    Select today's date.
  3. On the
    Effective Dated
     tab, add a row in the
    Worker Eligibility
     grid.
    Select
    Worker has Non Worked Hours (based on Work Schedule)
     from the
    Worker Eligibility
     prompt. This calculation ensures that the deduction resolves only for workers who entered or left the company in the middle of a pay period.
  4. From the
    Calculation
     prompt, select
    FRA Days * Rate Rounded to the Nearest 0.01
    .
  5. In the
    Calculation Proration
     section, select
    None of the above
    .
  6. Add these rows in the
    Related Calculations
     section:
    Related Calculation
    Override Calculation
    Rate
    FRA Base Salary Elements Daily Rate for Full Period Non Rounded
    FRA Days
    Non Worked Days in Full Period [FRA]
    FRA Unpaid Hours
    Non Worked Hours in Full Period [FRA]
  7. On the
    Non-Effective Dated
     tab, from the
    Groups
     prompt, select
    FRA Subtracts from Gross [FRA]
     to subtract the deduction from the gross pay.
Global Modern Services terminated Eric on January 16th, 2018. Before his termination he:
  • Had a monthly salary of 4000 EUR.
  • Worked Monday to Friday, 7.5 hours per day, based on his calendar schedule.
Workday calculates a daily rate of 127.536 EUR for the remaining days in the full period that weren't included in the worked subperiod, based on:
  • Eric's work calendar schedule: 82.5 unworked hours out of 172.5 work hours for January.
  • 15 unworked calendar days.
Workday displays these earning and deduction lines on Eric's payroll results:
Description
Rate
Unit
Amount (EUR)
Base salary
4000
Reduction for Days Not Worked
127.536
15
(1913.04)