SYMPTOM:

You have an employee, who has been given a mid-month promotion. Hence, he receives an increment with effect from the middle of the month.

So, every Payroll entry for this employee needs to be split into two Structures - one against the old Pay Structure and the other against the new Pay Structure. Under such circumstances, the System pro-rates the values, which will depend on the number of days that the employee works (or, has worked under) under a particular Pay Structure. 

This Article will discuss some subtle issues with the implementation.

Now here is our scenario:

In a particular Company, certain employees receive 'Canteen Allowance' at a daily rate of '5.00'. However, they receive this allowance only for the days in which they are physically present. So all Holidays, Leaves and Absences are excluded. In fact, the number of days of physical presence is separately tracked through a specific ('Other' type) Head of Pay (HOP) (say, 'PPDays').

Both the Heads of Pay - titled 'Canteen Allowance' as well as the intermediate HOP (i.e., the 'PPDays') - are being marked 'non pro-rated', since normal pro-rating is not desired. In fact, the formula for 'Canteen Allowance' is being defined as "PPDays * 5.00".

Let us consider a Monthly Attendance Class. The Period in question is 'July 2000', the Length of Period being '31 days'. The employee receives the increment as on 23rd July, 2000. Thus,  the previous Pay Structure is being re-attached to the employee from '23.7.2000'. Consequently, the previous 'Attachment' (in effect, the previous Pay Rate) remains valid till 22nd July, 2000.

Thus, the employee needs pro-rated treatment for all the HOPs in general. As a standard rule, the entitled value against an HOP will be multiplied by a factor of (22/31), since the employee has worked for only 22 days out of 31 days.

Similarly, under the new Pay Structure Attachment, the employee will receive a fraction of the entitled values, which is (9/31), since in July 2000, he works under the new rate from 23rd, i.e., for 9 days.

Nevetheless, 'Canteen Allowance' is an exception. It needn't be pro-rated in terms of number of days that the employee works under the Pay Structure.

But, following problems are noted:

• The allowance titled 'Canteen Allowance' is getting pro-rated somehow. For example, if 'PPDays' is entered as '7 days' for the new Pay Structure, then the 'Canteen Allowance' should, ideally, be '7 * 5 = 35'. However, it turns out to be '35 * (9/31) = 10.16 (approx.)'. What could be the workaround?

• Net payable total of 'Canteen Allowance' is required at the end of the month. You need the finalised total of 'Canteen Allowance' for both the 'split' Periods but how to get the sum under the second Pay Structure Attachment?

We shall take up the issues in the order in which they have been raised, here. For the sake of convenience, let us assume that the Short name of 'Canteen Allowance' is 'Canteen'.

CAUSE:

PERKS expects every allowance to be pro-rated as a rule, when the salary is split between multiple Periods. 'Canteen Allowance', being an 'Allowance', automatically, gets pro-rated against the split Period, irrespective of whether it is being marked for pro-rata calculation, or not. This is the default behaviour of the System.

RESOLUTION:

• It is possible to bypass the default behaviour on 'Allowance' type HOPs for 'split' Periods. Please refer to the WORKAROUND section for details.

• Create an HOP with 'Valuation As' as 'Calculated'. Set its formula as 'FINALTOTAL('Canteen')'. The 'FINALTOTAL()' function will seek the value against the Short name 'Canteen', and return the sum of the generated values of the Short name under each Pay Structure Attachment, i.e., against each corresponding 'split' Periods.

STATUS:

The behaviour on 'Allowances' is inaccordance with the design of the System.

Let both the HOPs, viz., 'PPDays' and 'Canteen Allowance', be marked as 'non - prorated'. However, convert the 'Type' of 'Canteen Allowance' from 'Allowance' to 'Other'. This would allow the HOP to be computed in a strictly non pro-rated basis.

To consider this HOP as part of Total Allowance (TOTALLOW), manually modify the formula of 'TOTALLOW', and add 'Canteen' to it. This is the standard way to bypass the default behaviour on pro-rating.

MORE INFORMATION

For obtaining preliminary Help on 'split' entries, please search the Online Help on 'Double Pay Structure Entry'. You can find related information in the Article captioned Leave Deduction for Split Case Employees .