Allowance or Deduction Set Up

You can specify a compensation type as an allowance or a deduction.

This means that you can specify positive amounts/percentages for deductions. You can also specify negative amounts and percentages on both allowances and deductions, such as to make adjustments. Either way, the specification of a compensation type as deduction is a change of the sign in the calculation of gross pay and base salary.

You can also specify if a compensation type contributes to the calculation of gross payment and base salary, respectively. Compensation types are extended with fields for specifying an external description.

Currently you can specify an upper limit on compensation types and compensation agreements used for percentage calculation, with a limit that applies to the pay period. This limit is extended so that you can specify an annual limit (a limit for the calendar year). You can also specify a threshold amount for the pay period as well as annually. If x is the result of calculating the percentage of the total amount for the compensation agreements within the specified compensation group and y is the threshold, then the calculation will give x: y if the amount is positive and zero otherwise (in case y is positive).

For gross pay calculations, the pay period limit and threshold cover a calendar period as defined by the pay period calendar of the compensation model, while annual limit and threshold cover a calendar year as defined by the pay period calendar.

For base salary calculations, both the pay period and annual limits/thresholds are scaled down to the calculation period of the base salary calculation.