Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
An Oracle White Paper July 2014
Oracle Fusion HRMS (United Arab Emirates): Payroll Implementation and Functional Considerations
Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
Disclaimer The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
Introduction ................................................................................................................................. 1 What’s in this Document.......................................................................................................... 1 Other Information Sources ...................................................................................................... 1 Document Updates ................................................................................................................. 2 Comments and Suggestions ................................................................................................... 2 Payroll Data ................................................................................................................................ 3 Person and Employment Payroll Data ..................................................................................... 3 Calculation Cards .................................................................................................................... 5 Statutory Deductions and Gratuity Calculation .......................................................................... 16 Social Insurance Calculation ................................................................................................. 16 Gratuity Calculation ............................................................................................................... 18 Elements ................................................................................................................................... 22 Element Classifications ......................................................................................................... 22 Element Templates ............................................................................................................... 26 Elements: Allowances, Unpaid Leave and Loans .................................................................. 29 Gratuity Payment Element .................................................................................................... 42 Salary Basis and Additional Allowance Elements .................................................................. 43 Auto Indirect Elements and Creation of Element Eligibility .................................................... 45 Proration and Retroactivity .................................................................................................... 46 Balances ................................................................................................................................... 48 Balances Definitions predefined for UAE............................................................................... 49 Balances and SOE ................................................................................................................ 53 Payroll Set up ........................................................................................................................... 56 Payments Setup.................................................................................................................... 56 Consolidation Groups and Payroll Definitions........................................................................ 60 Payroll Definitions ................................................................................................................. 61 Salary Basis and Compensation ........................................................................................... 64 Hiring an Employee and Running Payroll for UAE: Worked Example ........................................ 67 Hire an employee .................................................................................................................. 67 Assign additional information ................................................................................................ 70 Run Payroll and Review Results ........................................................................................... 76 Government Sector Employees............................................................................................. 79 Mandatory Post-Payroll Processes ........................................................................................... 81 Calculate Prepayments ......................................................................................................... 81 Archive Periodic Payroll Results............................................................................................ 82 Payments Processing and Payslip ............................................................................................ 85 Payments Processing ........................................................................................................... 85 Payslip .................................................................................................................................. 90 Monthly Reports ........................................................................................................................ 95 Form 1 .................................................................................................................................. 95
Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
Form 6 .................................................................................................................................. 98 Form 7 ................................................................................................................................ 100 Monthly Contributions – Private Sector ............................................................................... 102 Monthly Contributions – Government Sector ....................................................................... 105 Wage Protection System: Salary Information File ............................................................... 107 Global Reports ........................................................................................................................ 110 Statutory Deductions Register ............................................................................................. 110 Payroll Register Report ....................................................................................................... 113 Payment Register Report .................................................................................................... 116 Gross-to-Net Summary Report ............................................................................................ 119 Termination ............................................................................................................................. 123 Worked Example – Terminating an Employee..................................................................... 123 Form 2 ................................................................................................................................ 126 Conclusion .............................................................................................................................. 130 Glossary.................................................................................................................................. 130 General Terminology........................................................................................................... 130
Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
Introduction This paper identifies and describes payroll setup tasks for Oracle Fusion Human Resources Management System (HRMS) for the United Arab Emirates (UAE).
What’s in this Document This document is intended to support the implementation team in understanding:
UAE-specific payroll data that needs to be provided.
UAE statutory deductions calculations and set up needed at implementation level.
UAE predefined element templates and set up that needs to be done when creating customer specific elements.
UAE-specific predefined balances and how these can be fed by customer specific elements.
UAE-specific considerations for proration, retroactivity and terminations.
The base set up that needs to be done to execute a UAE payroll and prepare payment file and payslip.
The post-payroll processes that can be executed for UAE.
UAE predefined setup for SOE online results viewing and impact on customer created balances.
The migration process from a legacy system, by identifying UAE-specific fields that need to be populated by such migration.
Note: Flexfields described in this document are Developer Descriptive Flexfields (DDF) that must not be customized at an implementation level. Customer Descriptive Flexfields (DFF) are the fields delivered by the product that are meant to be used for customization during implementation. This documentation may also be beneficial to end users who run application processes after implementation. Note: This document should not be considered a comprehensive guide for payroll implementations. The focus of this document is UAE-specific processes and information. For information about generic tasks, the implementation team should refer to documentation listed in the following section. Note: Before running payroll for UAE, Human Resources needs to be implemented for the country itself. For this task refer to the HR Implementation and Functional Considerations guide for UAE, listed in the following section.
Other Information Sources Oracle Fusion Workforce Deployment Implementation Guide: http://docs.oracle.com/cd/E28271_01/fusionapps.1111/e20379/toc.htm Oracle Fusion HRMS (UAE): HR Implementation and Functional Considerations Guide: https://support.oracle.com/oip/faces/secure/km/DocumentDisplay.jspx?id=1565436.1 Oracle Fusion Global Payroll User Guide: http://www.oracle.com/technetwork/fusion-apps/payrolluserguider4-1873385.pdf
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Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations
Document Updates This document is based on the most current application release as of the document’s publication date. Content is updated as needed only to reflect major changes to existing features or when significant new features are added to the UAE localization. For this reason, it is possible that some minor UI differences may exist between the version being implemented and the version described in this document.
Comments and Suggestions Your comments are important to us. We encourage feedback about Oracle Fusion Applications Help and guides. Please send your suggestions to:
[email protected]. You may also use the Send Feedback to Oracle link in the footer of Oracle Fusion Applications Help.
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Payroll Data Person and Employment Payroll Data For a person to be processed in payroll a payroll relationship must be defined for the same. This section describes specific requirements for UAE in terms of payroll relationships including the UAE-specific information needed for payroll that must be captured in the employment and payroll relationship data Payroll Relationships, Terms and Assignments
Payroll Relationship represents the relationship of the person with the Payroll Statutory Unit (PSU). This varies from country to country, but essentially no balance aggregation is performed above this level for a person. Each country defines the person types for which a payroll relationship is created. In general, to be processed in payroll, a person must have a person type of Employee, Contingent Worker or Beneficiary. In UAE, the payroll relationship type Standard is used for person type Employee. You can also create a payroll relationship for other person types such as contingent worker and nonworker.
If the nonworker type is NonWorker Paid, the payroll relationship is Standard.
If the nonworker type is NonWorker, the payroll relationship must be of type Element Entries Only.
If the nonworker type NonWorker Unpaid, no payroll relationship is created.
For contingent workers the payroll relationship is of type Element Entries Only.
For UAE, a single payroll relationship is created per relationship type. In case of rehire, the employee is treated as a new employee and so there is only one payroll relationship per person. For UAE, the payroll relationship rule Continuous Period of Service (C) is predefined. Note: Payroll relationship rule Continuous Period of Service (C) implies that when the HR user creates a new Work Term, a check is made for a Payroll Relationship of the same type and PSU. If one exists, the LSED of the payroll relationship will be validated. If it is greater than the Term start date, the Work Term will be attached to it. If it is less than the Term start date, a new Payroll Relationship will be generated. If one does not exist, a new Payroll Relationship will be generated. When a Work Term is terminated, if it is the last active Work Term associated with the Payroll Relationship, the Payroll Relationship will also be terminated. Note: You can find the predefined data for legislation rules in the Oracle_Fusion_HRMS_UAE_Payroll_Data.xls on My Oracle Support (MOS). UAE has a requirement to handle multiple assignments within a legal employer. A person may have multiple assignments within different terms. Possible valid combinations are:
1 Payroll Relationship – 1 Term – 1 Assignment
1 Payroll Relationship – 1 Term – n Assignments
1 Payroll Relationship – n Terms – n Assignments
Social insurance deduction is calculated at payroll relationship level. Earnings related to social insurance are considered at all the three levels, that is, Relationship, Terms, and Assignments.
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UAE-specific data must be captured at a payroll relationship level and the calculation of some country specific allowances is derived from this. To capture this information, two flexfields are enabled for the UAE at the payroll relationship level:
If data is migrated from a legacy system, this UAE-specific field must be populated. The following table shows the attributes of this flexfields for record PAY_PAY_RELATIONSHIPS_DDF (DESCRIPTIVE_FLEX_CONTEXT_CODE = AE): TABLE 1. PAYROLL RELATIONSHIP DATA FLEXFIELDS UAE
APPLICATION_COLUMN_NAME
END_USER_COLUMN_NAME
LOOKUP
DESCRIPTION
REL_INFORMATION1
ACCOMMODATION_PROVIDED
HRC_YES_NO
Accommodation Provided
REL_INFORMATION2
TRANSPORTATION_PROVIDED
HRC_YES_NO
Transportation Provided
Contract Data
Contract data must be captured for every payroll relationship, which also affects gratuity processing. For this reason, it is strongly recommended that UAE payroll customers use the 3-tier employment model. If there is no requirement to have multiple terms and multiple assignments, the 2 tier – single contract – single assignment employment model can also be used. The UAE has the following 2 contract types:
Fixed Contract
Unlimited Contract
The flexfield Employment Status is enabled to capture UAE specific contract details.
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If data is migrated from a legacy system, this UAE-specific field must be populated. The following table shows the attributes of this flexfields for record PER_CONTRACT_LEG_DDF (DESCRIPTIVE_FLEX_CONTEXT_CODE = AE):
TABLE 2. CONTRACT DATA INFORMATION FLEXFIELDS UAE
APPLICATION_COLUMN_NAME
END_USER_COLUMN_NAME
LOOKUP
DESCRIPTION
CTR_INFORMATION1
EMPLOYMENT_STATUS
HRX_AE_EMPLOYMENT_STATUS
Employment Status
Calculation Cards Calculation cards functionality is used to capture data needed for payroll processing that cannot be captured in global fields. These cards are used to capture data at the organization level as well as the person level. The UAE localization provides two predefined cards at the payroll statutory level (PSU). These are:
Employer Social Insurance Details
Employer Gratuity Details
At the person level, there are two predefined cards:
Employee Social Insurance Details card
End of Service Details card
The flexfield structure used to store information entered in the calculation cards is described in Oracle_Fusion_HRMS_UAE_Payroll_Data.xls on My Oracle Support (MOS). Employer Social Insurance Calculation Card
The employer social insurance details card uses the following information for social insurance calculation at the legal entity level:
Employer Sector: The employer sector can be either government sector or private sector. The deduction rules are applied based on the type of sector you choose.
Contributory Salary Reference Formula: You can define the formula that calculates the contributory salary at the legal entity level. The contributory salary value is derived from this formula and is used as the reference value for social insurance calculation. This formula must have the value returned using variable CONTRIBUTORY_SALARY_REFERENCE. For additional details on the calculation, refer to the section on social insurance calculation.
To enter or modify this information: 1.
Sign in to the Oracle Fusion application using a role that has the profile of a superuser and privileges to create all organizational structures:
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2.
Select Setup and Maintenance from the Navigator:
3.
Navigate to task Define Legal Entities for Human Capital Management:
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4.
Select the legal entity through Selected Scope, for which data needs to be added and select task Manage Legal Entity Calculation Cards:
5.
Select the Employer Social Insurance Details Card from the given list. If no card exists, click Create. Select the Employer Social Insurance Details and click Continue. The Manage Calculation Cards page appears:
6.
Enter required details in the Payroll Statutory Unit Social Insurance Details:
Employer Gratuity Details Card
The gratuity card contains the payroll statutory unit (PSU) gratuity details and uses the following information for gratuity calculation at the legal entity level:
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Calculation Basis: The amount of gratuity is based on the salary per day of the employee which will differ based on whether you choose fixed or actual calculation basis. For gratuity calculation, the monthly salary is converted to annual salary. This amount is divided by the number of days in a year. The actual calculation basis uses 365 days in a year whereas the fixed calculation basis uses 360 days.
Salary Formula: You must define your own salary formula for gratuity calculation. Once you have defined the salary formula, you can select it here. The formula must return the values using variable MONTHLY_SALARY. Additional details on the calculation are provided in the section on gratuity calculation.
Reference Formula: You can define your own reference formula to calculate the paid gratuity amount and select it here. The formula must return the values using variable PAID_GRATUITY. This overrides the amount calculated by the default reference formula in the End of Service Details card in the gratuity details calculation component.
To enter or modify this information: 1.
Follow steps 1-5 used for employer social insurance details card.
2.
Select the Employer Gratuity Details:
3.
Enter required details in the Payroll Statutory Unit Gratuity Details:
Person Social Insurance Calculation Card
The calculation component on the employee social insurance card corresponds to the social insurance contribution payroll deduction element, defined at the legislative level. The employee social insurance component details section
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captures additional information used to calculate the deduction. When the employee social insurance calculation card is created, the social insurance calculation component and the social insurance calculation components details record are automatically created. You can create additional calculation component details such as Social Insurance Contributory Salary Override and Social Insurance Contributory Salary Adjustment Amount. The social insurance card is automatically created when the new hire process for an employee is completed, provided the employee citizenship information is specified. If the citizenship information is not specified, then the social insurance card must be created manually for this employee. For the automatic card creation to be enabled, your Payroll Product Usage must be set to Oracle Fusion Payroll or Payroll Interface. To enter this information: 1.
Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager:
2.
Select Payroll Calculations task from the Navigator:
3.
Navigate to Manage Calculation Cards task and select the person for whom you want to review the calculation card:
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4.
Select the Employee Social Insurance Details Card from the given list. The Manage Calculation Cards page appears:
Note: If no card exists, select Create and create the calculation card manually. 5.
Enter details or edit the Employee Social Insurance Details:
Note: For the UAE localization, you must associate the social insurance card to a person for running the payroll. Consider the following points when entering the data: Citizenship: Social insurance deductions are processed only for the UAE citizens. You must specify the citizenship of the employee as the social insurance card will be processed based on this information. Method of Obtaining Nationality: This information is used for reporting purposes. The method of acquiring nationality could be by birth, residence, marriage or any other factor.
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Date of Acquiring Nationality: The date of acquiring nationality cannot be earlier than the person's date of birth. Exception Type: Social insurance deductions are processed based on the exception type:
Employee pays both employer and employee contributions
Employer pays both employee and employer contributions
Employer pays contribution monthly and employee pays later
Depending on the selected exception type, the employee or the employer pays the contributions. If no value is specified, then the employer and the employee each pay their contributions. Registered for Social Insurance - This checkbox indicates whether to process social insurance calculations for employees. For employees who are Emirati citizens and have their Social Insurance Numbers specified during the new hire process, this checkbox is selected automatically indicating that social insurance calculations must be processed. For employees who are non-Emirati citizens, this checkbox remains unselected indicating that social insurance calculations will not be processed. Employees registered for social insurance are not eligible for gratuity. Paid from another Government Sector - Select this checkbox to specify if the employee receives additional pay from another government sector organization. You can select the checkbox by editing the automatically created card. Sector or Department Name: This is a free text field. This does not affect the social insurance calculation, but used for reporting purposes. 6.
Enter Override or Adjustment amounts:
To enter the employee social insurance contributory salary override or adjustment amounts, you must manually create the calculation component details. Click Create to create the calculation component details and enter the required information:
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Consider the following points when entering the data:
7.
Social Insurance Contributory Salary Override: You can additionally create the calculation component details for Social Insurance Contributory Salary Override, if applicable. You use the override amount to specify a social insurance contribution amount that is different from the social insurance balance, or the amount derived from the reference formula at the legislative level. This is applicable only for the private sector employees and is processed just in the first month of joining or in the month of January every year. This amount, if specified, is applicable for the whole year. Social Insurance Contributory Salary Adjustment: You can additionally create the calculation component details for Social Insurance Contributory Salary Adjustment Amount, if applicable. You use the adjustment amount to make any changes to the social insurance contributory salary amount. This is only applicable for private sector employees and can be specified any time during the year.
Click the Associations tab to ensure that the calculation card is associated with the appropriate TRU and Employment Terms:
Note: The calculation card is associated automatically to the appropriate TRU and Employment Terms. End of Service Details Calculation Card
The component in the End of Service Details card corresponds to the payroll element gratuity contribution, defined at the legislative level. This card captures additional information related to gratuity and end of service details. The End of Service Details card has two main components:
Gratuity details
End of Service details
Gratuity Details
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When you create the End of Service Details card, the gratuity details component and components details record is created automatically. The gratuity details component is used to enter data that impacts the calculation of gratuity payment. On termination, you can enter an override amount to be paid to the employee as gratuity. This amount overrides the gratuity amount calculated using the reference formula defined at the payroll statutory unit level and the legislative level formula calculation. For example, if the primary term is a fixed contract type and the subsequent terms are unlimited, then the amount of gratuity calculated is based on fixed contract type instead of reduced amount for the unlimited contract. In this case, you can enter an override amount at the payroll relationship level. Gratuity card is created automatically upon employee termination, provided the Registered for Social Insurance checkbox is unselected for the employee. When the gratuity card is created, the gratuity component, component details, and the association are automatically created. The automatic card creation is enabled only if the Payroll Product Usage is set to Oracle Fusion Payroll or Payroll Interface. End of Service Details You use the End of Service Details card to specify whether the employee wants to claim the end of service remuneration or pension from the social insurance office. In this card, you can also specify the bank information where the payment has to be made. The end of service details component is used mainly for reporting purposes in the Form 2 and submitted to the social insurance office. To enter this information: 1.
Follow steps 1-4 used for employee social insurance details card.
2.
Enter or edit the required information:
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3.
Click Create to create the calculation component details and enter the required information in the Override Amount field:
Note: To enter the gratuity details override amount, you must manually create the calculation component details. Consider the following points when entering the data:
Override Amount: You can enter an override amount to be paid to the employee as gratuity. If override amount is specified, this amount overrides the reference formula for gratuity calculation defined at the PSU level, and also the calculation formula defined at legislative level.
4.
To create End of Service Details calculation component details, click Create and select End of Service Details:
Consider the following points when entering the data:
5.
End of Service Remuneration or Pension: used to specify whether the employee wants to claim the end of service remuneration or pension from the social insurance office.
Bank Name, Branch, Account Number: bank information where the payment must be made.
Click the Associations tab to ensure that the calculation card is associated with the appropriate TRU and Employment Terms:
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Note: The calculation card is associated automatically to the appropriate TRU and Employment Terms.
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Statutory Deductions and Gratuity Calculation The data entered at the TRU level and at the person level are the starting point for calculating statutory deductions and gratuity payment, if applicable. Based on legislative requirements UAE localization has predefined a setup with the parameters to be used in the calculation. These parameters are stored in the legislative repository for calculation information.
Social Insurance Calculation Social insurance is applicable to all Emiratis who work in the UAE and are paid there. This contribution is normally paid both by the employer and the employee, but there are some exceptions to this behavior that can be defined at the person social insurance calculation card level. Contributions are calculated as percentages of a contributory salary. The contributory salary components are elements like basic compensation, accommodation and transport allowances. The legislation determines which elements are liable to social insurance contributions, whereas the amounts and definitions of the same depend on the employer’s regulations. For private sector employees:
The amount of the contributory salary can be overridden at the person level.
If this amount is not entered at the individual level, you can define a formula used to calculate the contributory salary at the legal employer level.
Finally, if neither individual override, nor legal employer formula, are defined, the contributory salary uses the value of earnings elements that are subjected to social insurance. These elements are identified through secondary classification and feed the balance Subject to Social Insurance. Further detail on how UAE has defined element classifications and balances can be found in the related sections.
The contributory salary has a monthly minimum value and a monthly ceiling. This means that if the monthly social insurance income is lower than the minimum value, contributions are calculated on the minimum value. If the monthly social security income exceeds the monthly ceiling, contributions are due just on the part up to the ceiling. For the UAE, a minimum monthly contributory salary of 1000 AED and monthly ceiling of 50000 AED are predefined.
For Private Sector, the employee contribution is 5% and employer contribution is 12.5%. But if the exception type is Employee pays both contributions, then system adds a private sector subsidy in Employer contribution (12.5% + 2.5% =15%).
For the government sector:
The contributory salary uses the value of earnings elements that are subjected to social insurance. These elements are identified through secondary classification and feed the balance Subject to Social Insurance.
There is no floor or ceiling limit to the contribution salary.
If the employee’s payroll relationship is terminated in the month, no contribution is deducted. If termination date is end of the month the full contribution is deducted. Social Insurance Deductions
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Social insurance contribution is calculated through the deduction Social Insurance that is part of the component group Social Insurance. Calculations are done through element Social Insurance. To view details on component groups, calculations and elements: 1.
Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager.
2.
Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work-area
3.
Select SI Deduction and view the details
Legislative Repository for Calculation Information
Parameters used in the calculation of social insurance are stored in the legislative repository for calculation information. These parameters are predefined by the UAE localization and cannot be modified in the implementation phase. To view predefined parameters: 1.
Log in with a Payroll Manager role.
2.
Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work area.
3.
Select SI Deduction.
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4.
Open the Calculation Factors for the related element:
5.
By clicking on Range Values details of the calculation factors are displayed:
Gratuity Calculation Persons working in UAE are entitled to an additional payment upon termination which is called Gratuity. The entitlement to this payment is accrued during the work relationship. Gratuity calculations are triggered only for persons who are not eligible or not registered for social insurance. The gratuity amount to be paid is driven by UAE labor laws. If you are not following the UAE labor laws, you can define your own formula for gratuity processing. The following two options are available: must
You can define your own formula and create a setup according to the values to be returned to you formula run results. In such a scenario, you may not need to use the localization solution for gratuity processing.
You can define your own reference formula gratuity processing, which substitutes the gratuity formula defined at the legislative level. If a user-defined formula exists, then the seeded formula executes it.
The localization solution for gratuity processing uses the following rules:
The duration of service and the contract type (fixed or unlimited) determines the number of days of gratuity payment to which the payee is entitled per year of service. These days are retrieved from the legislative repository for calculation information. Note that the duration of service can be reduced by unpaid or unauthorized absences. This is obtained by creating elements for Unpaid Leave classification and attaching this element to the absence type. If an absence with this newly created absence type is
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recorded, the Unpaid Leave element’s days input value will feed the Leave Without Pay balance. In the Gratuity formula, the Leave Without pay balance is used to get the unpaid absences.
The base salary for gratuity payment is calculated through the salary formula selected at the legal employer level.
If the person is terminated, contract type and termination initiator is checked and amount is paid: o
If termination initiator is employer, then the complete gratuity accrued is paid to the employee.
o
If termination initiator is the employee, the application fetches the payment factor using the contract type and period of service. Payment factor is available in the legislative repository for calculation information.
Gratuity Entitlement and Payment
Fixed Contracts Gratuity Entitlement: An employee is entitled to 21 days salary for the first 5 years and 30 days salary for each additional year. Gratuity Payment: If employer terminates the employee, the employee is paid the complete gratuity that has accrued. If employee has resigned before the contract period, and has completed less than five years in service, the employee is not paid gratuity. But if the employee has completed more than 5 years, then they are paid the complete gratuity amount upon termination. If the contract has expired and the employee has completed more than one year in service, complete gratuity amount is paid upon termination. . Unlimited Contracts Gratuity Entitlement: An employee is entitled to 21 days salary for the first 5 years and 30 days salary for each additional year. Gratuity Payment: If employer terminates the employee, the employee is paid the complete gratuity that has accrued. If employee has resigned before completing one year, then no gratuity is paid. If the employee has completed between 1 to 3 years, one-third gratuity is paid. If the employee has completed between 3 to 5 years, two-thirds gratuity is paid. If the employee has completed more than 5 years, complete gratuity is paid Calculation Groups and Calculations
Gratuity payment is calculated through supplemental earnings Gratuity Payment that is part of calculation group Gratuity. Calculations are done through element created as a Gratuity Payment. To view details on calculation groups, calculations and elements: 1.
Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager:
2.
Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work-area.
3.
Select GRATUITY Calculation and view the details.
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Legislative Repository for Calculation Information
To view predefined parameters: 1.
Log in with a Payroll Manager role
2.
Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work area.
3.
Select GRATUITY Calculation.
4.
Open the Calculation Factors for the related element:
The calculation factors are used for calculating gratuity payments (gratuity bands represent the eligibility months). 5.
Click on Range Values. Details of the calculation factors are displayed:
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Elements Elements are the building blocks of payroll and benefits. There is no limit to the number of elements that can be defined. Policies or business rules that govern the allocation of these elements to workers can be specified at the element level. Elements can represent:
Earnings, such as salary, wages, and bonuses Compensation, such as employee stock purchase and insurance plans Absences from work Tangible items distributed to persons, such as tools, uniforms, mobile phones, or computers Statutory deductions, such as employee taxes and social insurance Voluntary deductions, such as loans Involuntary deductions, such as court orders, as well as pretax deductions Employer taxes and other employer liabilities
Elements are grouped into primary classifications, such as Earnings and Voluntary Deductions. In a human resources department, you can use the primary classifications to identify groups of elements for information and analysis purposes. In a payroll department, the classifications control processing, including the sequence in which elements are processed and the balances they feed. Oracle Fusion supplies many predefined elements (that cannot be modified at the implementation level), while additional elements can be generated, defining certain types of compensation and payroll elements through templates. Element templates include the elements, balances, balance feeds, and formulas required for payroll processing. Templates have various rules associated with them which will be used to create data based on certain criteria. The template engine will get the values for the rules from the template and process the seeded template structure to create appropriate data that is required. Using the template infrastructure, UAE localization has defined its structures for creating a standard set of elements for earnings, by modifying a global template questionnaire. When creating an element the questionnaire that guides you through the creation depends on the classifications selected for the element itself. Once you complete the questionnaire and submit the process, the relevant payroll objects are generated. You now have the ability to edit these objects (using the review pages and the object navigator) to ensure they fully meet you business requirements.
Element Classifications Global Payroll has defined a set of primary classifications and UAE localization has selected the ones that are applicable for the country. Additionally a set of secondary classifications and subclassifications have been defined specifically by the localization.
Secondary classifications are used in the element template process to drive the questionnaire and also to create the element with the needed characteristics.
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Subclassifications are used to control balance feeds and identify a sub type of the particular classification.
All the classifications predefined for UAE are listed in the Oracle_Fusion_HRMS_UAE_Payroll_Data.xls on My Oracle Support (MOS). Secondary classifications and subclassifications can be created at implementation level and they do not have any impact on the UAE predefined data. Primary Classifications
The following primary classifications are enabled for the UAE localization:
Absence Accruals Absences Balance Initialization Direct Payments Employer Charges Information Involuntary Deductions Pre-statutory Deductions Social Insurance Deductions Standard Earning Supplemental Earnings Voluntary Deductions
In the implementation phase, when creating an element though element template functionality, you are prompted to select the primary classification for that element and this drives the questionnaire to use and also the characteristics of the element that will be created. Notes: The subclassifications Subject to Social Insurance and Subject to Unpaid Leave are defaulted for all elements with primary classification Standard Earning. This implies that all these elements: o Will be part of the contributory salary o Will not be paid in case of unpaid leave Secondary Classifications
Secondary classifications are connected to primary classifications. The following secondary classifications have been defined for the UAE localization: Primary Classification Standard Earnings:
Additional Allowance Basic Salary Children Social Allowance Cost of Living Allowance Grade Allowance Hourly Wage Housing Allowance Overtime Allowance Shift Allowance
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Social Allowance Transport Allowance Unpaid Leave
Primary Classification Voluntary Deductions:
Loans
The selection of the secondary classification will drive the questions of the element template and the characteristics of the element that is created. For the allowances created as standard earning these characteristics are described more in detail in the section of element allowances. Subclassifications
Subclassifications are connected to primary classifications. The following subclassifications are defined for the UAE: Primary Classification Standard Earnings:
Subject to Social Insurance Subject to Unpaid Leave
Primary Classification Information:
Subject to Social Insurance Subject to Unpaid Leave
Primary Classification Absences:
Subject to Social Insurance
All these five subclassifications are attributed by default to the elements created for the corresponding primary classification. During implementation, if there is a requirement to define an element that is not a standard earning, but is part of the contributory salary, the steps to follow are: 1.
Define a new subclassification and the corresponding subclassification rule.
2.
Feed the contributory balance with this subclassification.
Reviewing Classifications
1.
To review classifications , log in with a Payroll Manager role
2.
Navigate to task Manage Element Classifications in the Payroll Calculation work-area
3.
Select the appropriate Legislative Data Group (LDG) and view all the primary classifications defined for the legislation connected to the selected legislative data group.
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4.
Select a specific classification to vie secondary classifications and subclassifications defined for the primary classification.
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Element Templates A specific element template is available in UAE localization for the following primary classification: Standard Earnings For all other primary classifications, the standard global template is used also when creating UAE elements. When selecting Standard Earnings as primary classification:
If no secondary classification is selected or Basic Salary or Additional Allowance secondary classification if selected, then the standard element template is followed and no specific UAE consideration is applied.
If the other Allowances secondary classifications are selected, then allowances are created following UAE specific rules that apply to the specific allowance type.
If Unpaid Leave secondary classification is selected, an element with UAE specific characteristics for the UAE is created.
In the global standard template, the section of Calculation Rules is not displayed because the related global objects must not be created for these elements since UAE specific objects must be created instead. Viewing, for example, an element created with secondary classification Hourly Wage:
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You can see that specific input values have been created and a fast formula (Test_Hourly_Allowance_AE_HOURLY_FF) is used to perform the calculations for this type of allowance. When selecting Voluntary Deductions as primary classification:
If no secondary classification or End of Service Deductions secondary classification is selected, then the standard element template is followed and no specific UAE consideration is applied.
If the Loans secondary classification is selected, then deduction element is created following Global specific rules that apply to loans.
From a template questionnaire perspective, there is no difference with the global standard template, but in this case, set UAE-specific objects are created in addition to the global ones. Further information is provided in the element details section of the document. Availability of Element Template Functionality Based on Product License
The availability of features in element templates depends on the type of license you have. HR-Only: As an HR-only customer, you get access to the basic version of the element templates. These templates create the element and you need to create the input values, formulas, balances to meet your business requirements. Payroll Interface: As a payroll interface customer, you get access to a number of payroll features not available to an HR-only customer. This includes access to the full earnings element that will create the element, input values, formulas, balances. These earnings elements can be processed through the calculation to Gross process which is also available to Payroll Interface customers. Any other type of element, such as deductions, is created using the basic version of the element templates and you need to create the input values, formulas, balances. Payroll: A payroll customer gets access to the full set of earning and deduction templates. These templates create the element, input values, formulas, balances.
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Disclaimer Note: If you want to use an element in the payroll process, then the element must be created after the payroll license is set. This creates the full set of data needed for payroll processing, such as element definition, input values, balances, formulas. If payroll license is set after the element is created the above data will not be created. Setting up Licenses
1.
Navigate to Payroll Process Configuration Task using the Functional Setup Manager (FSM)
2.
Navigate to Default Group Tab
3.
If you have overridden the group, then the payroll license must be set for that group.
4.
Select Payroll License to decide Payroll License parameter name and edit it. Change the appropriate license value. You can enter following values: HR_ONLY – This must be set when customer is having an HR only license. PAYROLL_INTERFACE – This must be set when customer is HR only and has a payroll interface license. PAYROLL – This must be set when customer has both HR and Payroll licenses
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5.
Navigate to Manage Default Process Configuration Group Profile Option Values Task in the FSM:
6.
Set the appropriate configuration group in the profile option value field:
Elements: Allowances, Unpaid Leave and Loans Earning allowances, unpaid leave and loans are the elements for which UAE localization has predefined specific calculation rules. Allowances
The calculation rules for the below allowances are generated when creating the element using the related template. Implementation teams need to elect the appropriate secondary classification when generating a new allowance element. Implementation teams can also set up grade rates and calculation value definitions.
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The calculations of these allowances are triggered through element entries. Children Social Allowance The children social allowance depends on the number of dependent children. This allowance is paid to the local nationals only. The following input is required for the calculation:
Citizenship information in the calculation card for the person. Contact details for the employee in the contacts section in the Manage Person page with contact type Child. The dependent must also be marked as Statutory Dependent. Number of dependent children is based on the data entered here. A range value for the seeded calculation value definition details Children Social Allowance. Allowance per child is based on the value entered here.
To create the range value: 1.
Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager.
2.
Navigate to task Manage Calculation Value Definitions in the Payroll Calculation work area.
3.
Select the calculation value definition details for Children Social Allowance:
4.
Enter the value of the allowance per child by adding a row in Range Values
Note: The From Value must be 0, while any value can be chosen for the To Value since it does not affect calculation.
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Note: The process of entering a value in calculation value definition details is the same for the other allowances. Cost of Living Allowance The cost of living allowance can be a flat amount or a percentage of salary. The following input is needed to perform the calculation:
Range value for the seeded calculation value definition details Cost of Living Allowance Percent. Range values for the seeded calculation value definition details Maximum Cost of Living Allowance and Minimum Cost of Living Allowance: these two amounts will be used to set the maximum and minimum amount, which a person eligible for the cost of living allowances. Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance. The Cost of Living Allowance Percent is applied to this monthly salary basis and the resulting amount is compared with the Maximum Cost of Living Allowance and Minimum Cost of Living Allowance. In case this is out of range, this is adjusted. Grade Allowance The basic salary is a fixed amount that is paid to the employee according to their grade. Since rates can be entered for each grade, it is suggested that you use grade rate functionality for it. The following is the input needed to perform the calculation:
Grades and grade rates must be setup following standard global process. The grade must be associated to the payee in the Employment page. Create an element entry for the payee entering the grade rate ID as an input value entry for Grade Rate.
Hourly Basic Salary For employees under hourly contract the amount paid monthly is based on the number of hours worked during the month. The hourly rate depends on the grade of the employee. The following input is required to perform the calculation:
Create a grade and grade rate and associate it to the employee in Employment page and in Element entries as shown previously in Grade Allowance. The value is calculated based on the hours worked in month * value returned from the grade rate table. Hours worked will be entered as input value.
Housing Allowance Housing allowance depends on the grade and marital status of an employee. The allowance can be a percentage (based on grade and marital status) or an amount (based on grade or marital status). In case of percentage based allowance, the calculated allowance amount can be subjected to a maximum and minimum limit. If the employee avails accommodation that is provided by the employer, then the monthly paid allowance is zero. An override feature is provided where you can enter the amount of housing allowance and then no calculations are performed. The following input is required to perform the calculation:
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Housing allowance is paid to employee if accommodation is not provided by the employer. This information is tracked at payroll relationship level and this value is defaulted to No in case there is no value entered at payroll relationship level. Marital status must be set for person in order to calculate the value of housing allowance and if no marital status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative information section. Create range values for the seeded calculation value definition details Housing Allowance Grade Rate for Married and Housing Allowance Grade Rate for Single. In the value field of the range value UI, you can select the grade rate from the ones that have been defined as grade rates. Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance if you have entered value of input value Rate value to be used as Percent. Create range values for the seeded calculation value definition details Maximum Housing Allowance for Married, Minimum Housing Allowance for Married, Maximum Housing Allowance for Single and Minimum Housing Allowance for Single. In the value field for range value, you must enter minimum or maximum value depending on the marital status. These values are used to get the allowance amounts if you have entered value of input value Rate value to be used as Percent. More specifically, if this calculation option is selected, the rate is applied to this monthly salary basis. The resulting amount is compared with the Maximum and Minimum values of the allowance and, in case of being out of range, is adjusted.
Note: The calculation of housing allowance (similar to other allowances) is triggered by creating an element entry for the payee and parameters that will drive the calculation is entered as input values:
Override Amount: allows overriding the final value of calculation.
Rate Value to be used as: drives the calculation method.
Overtime Allowance Overtime allowance gets paid to an employee for hours worked beyond regular hours on normal working days. The employee also gets paid when they work on rest days or holidays. The overtime rate is a percentage of the salary that depends on the grade and is different for hours beyond regular (on normal working days) and hours on rest days. The following is the input needed to perform the calculation:
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Attach a Gratuity Salary formula, in the Employer Gratuity PSU level Calculation Card, if not already attached. The value returned by this is the base monthly salary that is converted to a hourly salary using ROUND((monthly_salary * 12)/(365 * 8),2) Create range values for the seeded calculation value definition details Overtime Allowance Grade Rate for Regular Days, Overtime Allowance Grade Rate for Rest Days. In the value field of the range value UI, you must choose the grade rates that are used to get the amount for rest and normal day overtime.
Shift Allowance Shift allowance depends on the grade and may also depend on the nationality of an employee: the allowance can be in percent (based on grade and nationality) or in amount (based on grade and nationality). In case of a percent based allowance, the calculated allowance amount can also be subjected to a max and min limit. An override facility is also provided wherein you can enter the amount and then no calculations are performed. The amount entered is processed directly as the shift allowance. The following is the input needed to perform the calculation:
Create range values for the seeded calculation value definition details Shift Allowance Grade Rate for National, Shift Allowance Grade Rate for Non-National. In the value field of the range value page, you must choose the grade rates, which are used to get the shift allowance amount for UAE and no-UAE citizens. Create range values for the seeded calculation value definition details Minimum Shift Allowance, Maximum Shift Allowance. In the value field of the range value UI, you must enter minimum or maximum value of the shift allowance. These values are used to get the allowance amount if you entered the input value Rate value to be used as Percent.
Social Allowance Social allowance depends on marital status of the employee and is paid only to UAE citizens. The following is the input needed to perform the calculation:
Enter the citizenship in the calculation card for the person. Marital status must be set for person in order to calculate the value of social allowance and if no marital status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative information section. Create range values for the seeded calculation value definition details Social Allowance for Married, Social Allowance for Single. In the value field of the range value, you must enter social allowance amount for the married or single employee.
Transport Allowance Transport allowance depends on the grade and marital status of an employee. The allowance can be a percentage (based on grade and nationality) or an amount (based on grade or nationality). In case of percentage based allowance, the calculated allowance amount can also be subjected to a maximum and minimum limit. If transportation is provided by the employer, then the monthly paid allowance is zero. An override feature is provided where you can enter the amount of transport allowance and no calculations are performed. The following is the input needed to perform the calculation:
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Enter the transport allowance paid to employee if no transportation is provided by the employer. This information is tracked at payroll relationship level and this value is defaulted to No, in case there is no value entered at payroll relationship level. Enter the citizenship in the calculation card for the person. Create range values for the seeded calculation value definition details Transport Allowance Grade Rate for National and Transport Allowance Grade Rate for Non-National. In the value field of the range value, you can select the grade rate from the ones that have been defined as grade rates. Attach a Gratuity Salary formula, in the Employer Gratuity Details card, if not already attached. The value returned by this formula is used to take the base monthly salary for this allowance if you have entered value of input value Rate value to be used as Percent. Create range values for the seeded calculation value definition details Maximum Transport Allowance, Minimum Transport Allowance. In the value field of the range value, you must enter minimum or maximum depending on the marital status. These values are used to get the allowance amounts if you have entered value of input value Rate value to be used as Percent.
Allowances Setup: Worked Example
The requirement is to create an overtime allowance by which an overtime percentage of 110% is paid for regular days and 150% is paid for rest days. The following tasks need to be performed: 1) Create grade rates to store the percentages. Navigate to task Manage Grades in Workforce Structures work area.
2) Add a grade rate for each one of the percentages:
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3) Associate these grade rates to range values. Navigate to the task Manage Calculation Value Definition Details in the Payroll Calculation work area:
4) Associate the appropriate Grade Rate to the Range Value:
5) When an element entry is created for an Overtime Allowance element, the hours entered is multiplied by the hourly salary and the appropriate overtime percentages defined in the previous steps is applied.
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Unpaid Leave
Unpaid leave element is generated by selecting unpaid leave as secondary classification in the element template. The unpaid element’s input value Days feeds the Leave Without Pay balance. The Leave Without Pay balance is used in Gratuity calculation to get the unpaid or unauthorized absence. This element also reduces the earnings, based on the amount calculated by the unpaid leave formula. Creating an Allowance Element: Worked Example
This worked example describes how you can create an allowance element for Children Allowance. 1.
Sign in to the Oracle Fusion application using a role that has the profile of a Payroll Manager:
2.
Select Manage Elements in the Setup and Maintenance or Payroll Calculations work area:
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3.
On the Manage Elements page, click Create.
4.
On the Create Element window, select the LDG and a primary classification, then click Continue:
5.
Complete the fields at the top of the Create Element page, and then answer the questions:
6.
Click Next, and complete the rest of the questionnaire:
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7.
Verify the information and click Submit to create the new element:
8.
On the Element Summary page, provide additional information as needed, such as input values, processing rules, and eligibility:
Use the Element Overview panel to navigate through the setup pages.
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Note: Input values have been created for this element to receive information needed to calculate the value of the allowance. Note: Element eligibility must be defined so that the element is linked to an element entry. 9.
In the Element Overview panel, select Actions, and Create Element Eligibility.
10. On the Element Eligibility page, enter a name in the Element Eligibility Name field and click Submit.
Note: If you enter only a name and no eligibility criteria, the element is eligible for all employees. 11. The Balance Feeds link shows the balances that are fed by this element. All the balance feeds (apart from Impl_Doc_UAE_Children_Allowance that was generated by element rules) are generated automatically through the element classification defaulting mechanisms (and the related balance feeds by classification).
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12. The Related Formulas link shows the formulas connected to the elements that were automatically generated by the template.
13. Navigate to Manage Fast Formulas link to verify if the newly created formula is compiled and if not, compile it.
Voluntary Deductions: Loans
The Loan element for UAE is created for the primary classification Voluntary Deductions and the secondary classification Loan. The following loan types are supported for UAE:
Personal Loan House Construction Loan Housing Rent Loan Car Loan
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Loan approval, processing and payments are outside the scope of payroll process. The payroll process only supports the loan recovery process. Since the loan is interest free, there is no need for interest calculation. The element that is created through the element template is the loan recovery element. Multiple loan recovery elements can be created if the enterprise has several types of loans. The input data that is needed to perform the loans calculation is entered though the input values at element entry level. 1.
The input fields are generated by the element template when creating the element:
2.
The element template also generates a set of balances used to store accumulated values needed to process the loan:
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3.
Loan recovery is triggered for an employee by adding an element entry for an element classified as loan:
The following points must be considered when entering data:
Effective Start Date: Date on which the loan recovery will start. Effective End Date: End date of the element entry (if the element is recurring) indicating the last period when the loan must be recovered. Period Type: Indicates the frequency with which the value entered in the amount field recurs. Typically it is either Calendar Month or Annually. Amount: Indicates the amount to be recovered for the instance of the loan. If period type is Calendar Month, then the amount is deducted monthly. If period type is Annually, then the monthly deduction equals Amount divided by 12. If a loan is suspended for a period, then an instance with monthly frequency amount of 0 is created.
Gratuity Payment Element The UAE localization has predefined the Gratuity Payment element that is used to process gratuity payments. This element is automatically calculated in payroll whenever the End of Service calculation card is automatically generated by the termination process.
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This element is feeding the gross pay and net pay balances:
Salary Basis and Additional Allowance Elements In addition to the previously described allowances that are created using UAE specific templates, other earnings such as salary basis and compensation elements can be created using global templates. The following steps show how to create a regular earnings element for basic salary: 1.
Follow steps 1-3 used in the worked example for allowance creation.
2.
On the Create Element window, select the LDG and a primary classification. Click Continue:
3.
Complete the fields at the top of the Create Element page, and then answer the questions:
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4.
Click Next, and complete the rest of the questionnaire:
5.
Verify the information and click Submit to create the new element:
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6.
On the Element Summary page, provide additional information as needed, such as input values, processing rules, and eligibility:
Use the Element Overview panel to navigate through the setup pages. 7.
Repeat this entire process to create a set of elements to support your business needs. For example, you might create another element (Impl_Doc_UAE_Additional_Allowance) for an additional allowance.
Auto Indirect Elements and Creation of Element Eligibility Auto Indirect elements have been predefined by UAE localization to trigger Social Insurance and Gratuity Calculations once the related person level cards have been assigned to the person. These elements are automatically assigned as element entry to the person:
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This assignment is done without any action at the implementation level, but before assigning any person calculation card the implementation team must create element eligibility for the Auto Indirect elements as in this example:
This task is to be performed just once in the implementation process.
Proration and Retroactivity In scenarios where an employee has a mid-period change, for example, changing the social security exception type or the start or end of employment period during a month, a set of elements must be prorated. In scenarios where the employee has a retrospective change, the payroll process must recalculate payroll for past periods and generate retroactive deltas to be processed in the current period. Proration
Prorating Earnings When creating an element through element template you must consider if the element must be prorated for midperiod events. The behavior of the element is managed in the first stage by the answering the question related to proration contained in the questionnaire:
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If the answer is No, mid-period changes will not affect the calculated value of the element. If the answer is Yes, the template prompts you to enter the Proration Group. The mid-period changes may now potentially affect the calculated value of the element.
For elements enabled for proration the template associates by default the global standard proration formula:
Proration formula GLB_EARN_PRORATION uses natural days proration. For example, in case of hire or termination in the course of the month, it uses as proration factor: Employment days in the period or Calendar days in the period To meet different business requirements, implementation teams can create your own specific proration formula and attach it to the elements that follow these business requirements. Events that trigger the proration calculation are identified through the selected proration group. 1.
Log in with a Payroll Manager role.
2.
Navigate to task Manage Event Groups in the Payroll Calculation work area.
3.
Select Entry Changes for Proration
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4.
View the changes that trigger proration.
No specific event group is predefined for the UAE localization. Additional event groups can be added in the implementation phase.
Balances Payroll balances show the accumulation of values over a period of time. The values can be currency, hours, or any other numeric value. Most of the required balances are predefined and additional balances are created automatically when creating elements. Implementation teams can edit the definition of these generated balances, or create additional balances for calculations or reporting. When a balance definition (balance type) is created, balance category and a unit of measure can be selected. Each balance definition is grouped in a predefined balance category for quicker processing. Balance categories are legislation-specific and cannot be modified. Each balance can have multiple dimensions, which define the specific value to be retrieved. Balance dimensions are predefined and typically combine these components:
Time span, such as run, period to date, or fiscal year to date Employment relationship level, either assignment, terms, or payroll relationship Context, required for some balances only, such as tax reporting unit (TRU), element, or payroll
When a specific balance dimension is linked to a balance type, this results in creating a defined balance. The value assigned to a balance during processing is determined by balance feeds defined for the balance.
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Balance feeds can be by element input values or by balance classification run results.
Balance Feeds by Element: Indicates one or more element input values to add or subtract from a balance. If a balance is fed by a single element, it is called a primary balance. Balance Feeds by Classification: Indicates that all elements belonging to a specific classification will feed that balance. Any type of classification can be used to feed the balance but it is to be remarked that if a primary classification is added as a balance feed, the children of this classification from the secondary or subclassifications cannot be added. Also, you cannot use both secondary classifications and subclassifications in the same balance feed.
Balances are important for reporting because in most of the reports balances represent the values that are displayed in the output. Balances can be aggregated (through balance attributes) in balance groups and balance groups are the entities that are used by payroll reports to identify the balances to be included in specific sections of the report. A set of balance definitions are provided by global payroll, but localizations have a predefined set of definitions in addition to global data. UAE localization has predefined data related to the following balance definitions:
Balance Categories (enabling of global categories) Balance Types Balance Dimensions and Usages (enabling of global dimensions) Defined Balances Balance Groups and Attributes
Balances Definitions predefined for UAE This section describes the predefined balance definitions for the UAE localization and related tasks at implementation level. A detailed list of balances definitions predefined for UAE can be found in the UAE balances spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS). Balance Categories
The following global categories are enabled for UAE:
Absences Earnings Employer Charges Information Miscellaneous Social Insurance Deductions Direct Payments Involuntary Deductions Pre-Statutory Deductions Voluntary Deductions Total Earnings
Note: When creating a new balance in implementation phase, it must be associated to one of the predefined categories and categories cannot be added or modified in implementation phase. Balance Types
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Balance types predefined by UAE localization are listed in the UAE Balances Spreadsheet: Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS). In this section describes the balances that affect payroll calculation and that are likely to be fed by elements created in the implementation phase. A separate section is dedicated to the net pay balance due to its impact on the payment process. Gross Balance Gross Earnings collects all the gross earnings applicable for UAE and is fed by 2 primary classifications:
Standard Earnings
Supplemental Earnings
All elements created at the implementation level with these primary classifications feed this balance. Unpaid Leave Balance Subject to Unpaid Leave: Collects all the earnings that are not due to be paid when an employee is on unpaid leave. This balance is fed by subclassification Subject to Unpaid Leave. This subclassification is associated by default to earnings with primary classification Standard Earnings and Information and so all elements created in the implement phase with these primary classifications will feed this balance. Balance Leave Without Pay: Used to track the unpaid absences that are used in Gratuity Calculation. Social Insurance Balance Subject to Social Insurance: Collects all the earnings that are liable to Social Insurance and fed by subclassification Subject to Social Insurance. This subclassification is associated by default to earnings with primary classification Standard Earnings and Information and so all elements created in the implement phase with these primary classifications feeds this balance. The value of this balance is used as contributory salary if the same is not overridden. Balance Contributory Salary is used as base in the contributions calculations. Subject to Social Insurance is designed to store the earnings that make up the contributory base, but for private sector the base can be overridden or adjusted so, eventually, if there is no override or adjustment balance, contributory salary balance is equal to balance Subject to Social Insurance, otherwise it will account for the override or adjustment. Net Pay Balance
During the payment process, the net pay balance is used to store the amount to be transferred as remuneration for the payee. A net pay balance, named Net Pay, is predefined for UAE, and no additional setup is required during the implementation phase. To view the Total Pay balance: 1.
Select Manage Balance Definitions in the Payroll Calculations or Setup and Maintenance work areas.
2.
Enter Net Pay in the Name field and select a UAE LDG, then click Search:
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3.
Click the Net Pay balance in the Search Results to view the balance information:
Note: The Use for Remuneration field must be set to Yes. 4.
Click Balance Dimensions in the left panel to display the dimensions associated with this balance:
Note: The Core Relationship Payments is associated with this balance. 5.
Click Balance Feeds in the left panel to display the classification that feed this balance:
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Note: all elements created in the implementation phase with these primary classifications feed this balance. Balance Dimensions and Defined Balances
Balance dimensions enabled by UAE localization are listed in the UAE Balances Spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS). As per employment model, balances are maintained at all four levels, that is: Payroll Relationship, Payroll Terms, Payroll Assignment, and Group levels. The only dimensions that can be selected when creating a balance in the implement phase are dimensions enabled by UAE localization. Combining balance types and enabled dimensions UAE has delivered a set of defined balances that are listed in the UAE Balances Spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS). Balance Groups and Attributes
Balance Groups group together balances. For the UAE, they are used mainly for reporting or online viewing purposes, to identify balances that must be considered in specific sections. The way these balance groups are used in specific features, such as the SOE, are detailed in the sections describing the features in detail. The following balance groups are predefined for UAE:
AE_PAY_ARCH_GROUP_BALANCES_GROUP AE_PAY_ARCH_REL_BALANCES_GROUP
These balance groups are used in the payslip, whereas all the other reports use global balance groups to which country specific balances are connected. The connection between defined balances and balance groups is managed through balance attributes. Balance attributes can either be:
Created automatically through a defaulting mechanism depending on balance category and dimension Predefined by localization
The AE Balances spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx contains information on:
Defaulting criteria Attributes predefined by UAE localization
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When a balance that meets defaulting criteria is created in implement phase the related attribute is automatically associated to the defined balance. Defaulting criteria and attributed cannot be added or modified in the implementation phase. Balance Groups can be restricted for a specific localization, so that only balances of certain dimensions or categories are associated with a Balance Group. This is done through data that is predefined in the Pay Balance Usage Items table. Data predefined in this table for UAE is shown in the AE Balances spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS).
Balances and SOE The online Statement of Earnings (SOE) is a feature within payroll that allows the end-user to view all the relevant information for an individual employee payroll run or a prepayment in a single place so that the results can be easily viewed and verified. This typically covers personal information, employment information, payroll information, absence information, run results, messages and balances. The SOE feature is part of global product and has been customized to meet country specific requirements. Scope of this document is not to describe overall usage of the feature but to explain:
Criteria that drives the inclusion of specific balances in certain sections (the ones that contain balances results) of the SOE Predefined data for the SOE for UAE localization How you can include user-defined balances in SOE
SOE Sections and Related Balances
Payroll results are displayed in the SOE in several sections:
The following paragraphs mention the sections populated by balance results and for each section the balance groups and related attributed connected to the section are listed.
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Note: UAE localization has not predefined any balance group or attribute for SOE, so the global balance groups are used. Quick Reference Summary
This section is additionally split into four tabs of which, the following two contain data retrieved from balance results:
Gross to Net: This tab includes results for balances (defined balances) connected to balance group: GLB_SUMMARY_GROSS_TO_NET_BALANCE_GROUP that is connected to attribute GLB_SUMMARY_GROSS_TO_NET_ATTRIBUTE
Information: This tab includes results for defined balances connected to balance group: GLB_SUMMARY_INFORMATION_BALANCE_GROUP that is connected to attribute GLB_SUMMARY_INFORMATION_ATTRIBUTE
Earnings This section includes results for defined balances connected to balance group: GLB_SOE_EARNINGS_BALANCE_GROUP that is connected to attributes:
GLB_EARNINGS_ATTRIBUTE GLB_SUPPLEMENTAL_EARNINGS_ATTRIBUTE GLB_TAXABLE_BENEFITS_ATTRIBUTE
Deductions
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This section includes results for defined balances connected to balance group: GLB_DEDUCTIONS_BALANCE_GROUP that is connected to attributes:
GLB_PRE_STAT_DEDUCTIONS_ATTRIBUTE GLB_INVOLUNTARY_DEDUCTIONS_ATTRIBUTE GLB_VOLUNTARY_DEDUCTIONS_ATTRIBUTE GLB_TAX_DEDUCTIONS_ATTRIBUTE GLB_SOCIAL_INSURANCE_DEDUCTIONS_ATTRIBUTE
Information This section includes results for defined balances connected to balance group: GLB_INFORMATION_BALANCE_GROUP that is connected to attribute GLB_INFORMATION_ATTRIBUTE Employer Contributions This section includes results for defined balances connected to balance group: GLB_SOE_EMPLOYER_CHARGES_BALANCE_GROUP that is connected to attributes:
GLB_EMPLOYER_TAXES_ATTRIBUTE GLB_EMPLOYER_CHARGES_ATTRIBUTE
Direct Payments This section includes results for defined balances connected to balance group: GLB_DIRECT_PAYMENTS_BALANCE_GROUP that is connected to attribute GLB_DIRECT_PAYMENTS_ATTRIBUTE Taxable Benefits This section includes results for defined balances connected to balance group: GLB_TAXABLE_BENEFITS_BALANCE_GROUP that is connected to attribute GLB_TAXABLE_BENEFITS_ATTRIBUTE Predefined SOE Data for UAE
UAE localization uses the global Balance Groups for SOE and consequently the global attributes. To display balances seeded by UAE localization in sections where attributes are not generated by default, predefined assignment of attributes to a set of defined balances are delivered for UAE localization. The complete list of UAE delivered associations between defined balances and attributes is contained in the UAE Balances Spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS). For UAE, the following connections are defined between balances and sections of SOE report. Gross to Net Summary Section
Earnings Employee Social Insurance Involuntary Deductions Net Pay Social Insurance Voluntary Deductions
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Information Summary Section
Contributory Salary Leave Without Pay Subject to Social Insurance
Information Section
Employee Social Insurance Adjustment Employee Social Insurance Arrears Employer Social Insurance Adjustment
Attributes cannot be created or modified in the implementation phase. User-Defined Balances and SOE
When you need to create a defined balance with a specific balance category that is mapped in the balance attributes defaulting setup, then an attribute is associated to the defined balance. This occurs also for balances created via template. If that attribute is connected to a balance group that is displayed in a section of SOE, then also the balance you defined is viewable in SOE.
Payroll Set up Before processing payroll or post payroll processes a set of base tasks must be performed by the implementation team to define basic structures such as:
Banks and Bank Accounts Organization Payment Methods Consolidation Groups Payroll Definitions Salary Basis Compensation Elements
Payments Setup To process payments, a payment method must be assigned to a payee. Setup of banks and branches must be done before entering bank accounts and payment methods for the payee. No banks or branches are predefined for UAE. Banks and branches must be defined during implementation. This can be done manually, by entering the banks and branches in the application, or it can be done in a mass upload process. Banks
To define banks: 1.
Sign in to the application with a role that has implementation privileges, such as APPL_IMP_CONSULTANT.
2.
Select Manage Banks in the implementation project task list:
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3.
Click Create.
4.
On the Create Bank page, provide the required information:
Bank Branches
To define branches for the banks you created: 1.
Select Manage Bank Branches in the implementation project task list:
2.
Click Create.
3.
On the Create Bank Branch page, provide the required information:
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Bank Accounts
Once banks and branches are set up, you can define the bank accounts for the organization. Normally, implementation teams set up bank accounts that are used at an organizational level, such as the source bank accounts for payments, rather than bank accounts at the individual payee level. To define bank accounts: 1.
Select Manage Bank Accounts in the implementation project task list:
2.
Click Create.
3.
On the Create Bank Branch page, provide the required information:
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Note: If you want to use this bank account for processing payments related to payroll, select the Payroll option in the Account Use field. Note: The only Legal Entities that can be selected are the ones that have been assigned to a Primary Ledger. Assignment can be done in task Assign Legal Entities:
Organization Payment Methods
After setting up banks, you can define the payment methods that can be used within the organization itself. No organization payment methods are predefined for UAE. Implementation teams will need to create the ones applicable to the enterprise. To define organization payment methods: 1.
Select Manage Organization Payment Methods in the implementation project task list:
2.
Click Create.
3.
Select the LDG associated with this payment method:
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4.
On the Create Organization Payment Method page, enter the required information:
In the process of creating an organization payment method, a payment source needs to be created:
Note: UAE supports the following Payment Types: Cash, Cheque, and Electronic Funds Transfer (EFT).
Consolidation Groups and Payroll Definitions Consolidation groups and payroll definitions must be set up before running a payroll. Consolidation Groups
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Consolidation groups are used within the organization to enable grouping of different payrolls for reporting purposes. No consolidation groups are predefined for UAE. If you are creating payroll definitions for the implementation, you must define at least one consolidation group first, since it is mandatory information for payroll definitions. To set up consolidation groups: 1.
Sign in to the application with a role that has implementation privileges, such as APPL_IMP_CONSULTANT.
2.
Select Manage Consolidation Groups in the implementation project task list:
3.
On the Manage Consolidation Groups page, click Add Row:
4.
Enter a name and select the LDG. Description is optional, but useful to provide.
5.
Click Save.
Payroll Definitions Payroll definitions contain calendar and offset information that determine when payments are calculated and paid. Using payroll definitions, you can specify payment frequency, processing schedule, and other parameters for a particular payroll. Payroll period types, such as weekly or monthly, determine the interval at which you pay employees. UAE employees are typically paid monthly. Each payroll definition can be associated with only one payroll period type, and you must set up at least one payroll definition for each payroll period type that you use to pay employees. When you create a payroll definition, the complete payroll schedule is automatically generated, based on the selected payroll period type, any offsets or calendar adjustments, and the number of years that you specify. Once you have saved a payroll definition, you can assign employees to it on the Manage Payroll Relationships page. Before you can create a payroll definition, you must have already defined the LDG and consolidation group. No payroll definitions are predefined for UAE. To set up payroll definitions: 1.
Select Manage Payroll Definitions in the implementation project task list:
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2.
Click Create.
3.
Select the LDG for this payroll definition, and click Continue:
4.
On the Create Payroll page, enter the required information:
Note the following:
5.
You must select an existing consolidation group.
A Default Payment Method must be selected in order to be able to run the prepayment process.
Click Add Row in the Valid Payment Methods section to add an organization payment method to use as the default, plus any additional payment methods that are valid for this payroll. You can select any organization payment method defined for the LDG that is linked to this payroll definition.
Click Next, and provide the required information on the Payroll Offsets page:
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Number of Years: number of years for which payroll calendars are created starting from the Effective As-of-Date Offset Details: used to determine the key dates within the monthly payroll process.
Note: Date paid is used in the EFT file. 6.
Click Next, and review the payroll calendars that have been generated:
Note: to modify any one of the defaulted dates, the payroll definition that has been created must be updated after it is saved:
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7.
Click Next, and then finalize the creation of the payroll definition by clicking on Submit.
Salary Basis and Compensation Once you have created the elements that are meant to hold the payee basic salary and compensation information, you can perform the setup required to attribute the gross compensation to the payee. Salary Basis
To set up the salary basis: 1.
Sign in to the application with a role that has compensation administrator privileges, such as CMP_ADMIN_ALL.
2.
Navigate to Compensation work area:
3.
Select Manage Salary Basis, and then click Create:
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4.
On the Create Salary Basis page, select the payment element to use for the salary basis and provide the required information:
Note: Selecting Amount as input value will enable the prorating of the amount by period frequency when payroll is run. Individual Compensation
To create a compensation plan, such as for a car allowance: 1.
In the Compensation work area, select Manage Plans and click Create:
2.
Select the payroll element for the compensation plan, such as a car allowance:
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3.
Select the Dates tab and set the payment start and end dates:
4.
Select the Eligibility tab to define eligibility for the plan:
5.
Select the Plan Access tab and indicate whether to restrict access to this plan:
6.
Select the Instruction Text tab and add any instructions you want to associate with the plan.
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Hiring an Employee and Running Payroll for UAE: Worked Example In this section we will go through the process of hiring a UAE employee and running a payroll for the same. More information on the hire task for UAE can be found in Oracle_Fusion_HRMS_for_UAE-HR_Setup_White_Paper
Hire an employee To perform tasks related to person and employee management, you would typically sign- in to the application using a role connected to a user, such as Human Resource Specialist:
The new hire process is the first task in the workforce lifecycle. To hire an employee: 1.
Select New Person under Workforce Management in the Navigator:
2.
In the task list on the left, select Hire an Employee:
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3.
On the Identification page, provide the required information:
4.
On the Person Information page, provide the required information:
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5.
On the Employment Information page, provide the required information:
Note: The employee is connected to the newly created Payroll Definition. Fixed Terms Contracts When hiring an employee with a fixed term contract you must enter the duration of the contract to be used in the gratuity calculation, if gratuity is applicable.
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Assign additional information Now that the employee has been hired a set of data needs to be assigned to the employee in order to be processed and paid. Basic information to be assigned is:
Remuneration Information
Calculation Cards
Personal Payment Method
Remuneration
Remuneration to the employee can be assigned either through Salary Basis and Compensation (that will automatically generate element entries, or directly create element entries. In the example below, you enter remuneration using the setup for Salary Basis and Compensation. Adding a Salary
1.
Sign in to the Oracle Fusion application using a role that has the profile of a Payroll Manager (PAY_MGR_ALL).
2.
Select Manage Salary in the Person Management work area:
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3.
Click Create, then complete the fields on the Add Salary window:
4.
On the Manage Salary page, select the previously created Salary Basis and enter a Salary Amount, such as 2500 AED per month:
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Note: Selectable salary basis are limited to the ones defined for the LDG assigned to the payroll statutory unit connected to the legal employer of the employee. When you save this record, an element entry with the specified start and end dates is automatically generated. You can view the entry on the Manage Elements Entries page:
Note: The salary basis has as annualized value of the compensation. Adding Compensation
1.
Select Manage Compensation in the Person Management work area:
2. On the Manage Compensation page, click Award Compensation:
3.
On the Award Compensation window, select the previously created compensation plan and enter the compensation amount, such as 500 AED as additional allowance:
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When you save this record, an element entry with the specified start and end dates is automatically generated. You can view the entry on the Manage Element Entries page:
Calculation Cards
For payroll to be processed for a UAE employee, the Employee Social Insurance Details card must be present. This card is automatically generated upon hire process if the citizenship information is updated. To view, edit and create calculation cards: 1.
Select the Manage Calculation Cards task in the Payroll Calculation work area:
2.
Select the employee and verify that Employee Social Insurance Details card is created:
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3.
Review the default values that have been assigned to the card and if needed edit the data:
Note: If the card was automatically created as part of the new hire process, the value for Citizenship field is derived from Person Information. If the card is created manually, the citizenship is defaulted to United Arab Emirates. The default value for the Exception Type field is blank. If no value is specified, then the employer and the employee each pay their contributions. Personal Payment Method
Once banks and branches have been loaded in the system and a payroll definition has been assigned to the employee, you can add payment methods to the employee record. To assign personal payment methods: 1.
Select the Manage Personal Payment Methods task in the Payroll Distribution work area:
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2.
Search for and select the employee.
3.
On the Manage Personal Payment Methods page, click Create:
4.
On the Personal Payment Method page, select the Organization Payment Method for this employee:
Note: If the payment type is EFT, you must add a bank account and provide banking details
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Note: An employee can have multiple payment methods. Use the Payment Amount Type and Percentage fields to manage distribution across different payment methods.
Run Payroll and Review Results Now that the basic information has been entered, it is possible to run payroll and review the related results. This section describes the minimum data needed to run payroll, more detail on payroll process can be found in the core guides. Payroll run
1.
Select the Submit a Process or Report task in the Payroll Calculation work area.
2.
Select the LDG for which the payroll is to be calculated and flow pattern Calculate Payroll:
3.
Enter the parameters to run the report:
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4.
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is being run.
Payroll Period: Period for which payroll is calculated. For UAE, the period is always monthly.
Run type: Optionally, the report can be run for a specific establishment.
Click on Next twice and Submit the process.
Review Payroll Results
You can review the payroll results once the process is completed successfully:
Payroll results can be reviewed for the person: 1.
Select the Submit a Process or Report task in the Payroll Calculation work area.
2.
Filter the results using the appropriate parameters such as for example the Payroll Name (Payroll Definition):
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3.
Select the desired row and review the results using SOE:
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Note:
The income subject to social insurance is made up of the two earnings that were assigned to the employee through the remuneration definition. Deductions are driven by the social insurance calculation cards. Note that when exception type Employee pays both contributions was selected, both the employee and employer contributions are discounted from Net Pay.
Government Sector Employees To run the Monthly Contributions - Government Sector report, an employee belonging to a government sector legal employer must be hired. The legal employer must have the Government Sector selected in the legal entity calculation card for the social insurance details component:
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Additionally in order to generate cheque payments, a cheque type payment method must be associated the employee:
This employee is assigned the following payroll definition:
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Mandatory Post-Payroll Processes Once payroll has been executed a set of mandatory post payroll processes:
Calculate Prepayments
Archive Periodic Payroll Results
These are needed as prerequisites to run the set of post payroll processes such as payments, payslip and regulatory reporting.
Calculate Prepayments To run the calculate prepayments process: 1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is being run and flow pattern Calculate Prepayments:
3.
Enter the parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
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Process End Date: Start date of the process for which the prepayment is run.
4.
Click on Next twice, and Submit the process.
5.
Verify that process runs to success:
6.
Review the results at the person level:
Archive Periodic Payroll Results To run the calculate prepayments process: 1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is to be run and flow pattern Archive Periodic Payroll Results:
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3. Enter the parameters to be used to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run. 4.
Click on Next twice, and Submit the process.
5.
Verify the results after the process has run successfully:
6.
Review the results at the person level:
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Payments Processing and Payslip Once payroll has been executed a set of post-payroll processes need to be accomplished. Two basic post-payroll processes are:
Payments processing Payslip
This section describes:
What has been predefined by UAE localization to meet the UAE-specific business requirements. The process to generate the report outputs. A sample output of the reports.
Payments Processing Global payroll provides a global process that generates .XML file containing data generated by payroll that is relevant for payments processing. The UAE localization has predefined an e-text template in Oracle Business Intelligence Publisher which generates an EFT file from the XML. The EFT file has the structure prescribed for UAE. To generate the EFT file, no setup is required in the implementation phase. Report Execution
1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is to be run and flow pattern Make EFT Payments:
3.
Enter the parameters to be used to run the report:
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Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
Organization Payment Method: Process the employees with the selected organization payment method.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to view results:
6.
View the results:
7.
Select the generated file and view the output:
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Note: Once payment process is executed for a person for a specific period, the person will not be selected if the process is rerun. To rerun the payment for an already processed person, the whole execution needs to be rolled back. Generate Cheque Payments
The global Generate Cheque Payments process generates an XML output. This XML output will contain the data that is to be printed on the cheque template. UAE localization has predefined a Rich Text Format (RTF) template in BIP that generates a printout from the XML. The Generate Cheque Payments report has a predefined structure for UAE and consists of two sections: The first section will contain the following information:
Payroll Relationship Number Employee Name Cheque Date Cheque Number Net pay in numbers and letters.
The second section contains: Payroll Relationship Number Employee Name Employee Organization Name Job Title List of earnings elements and amounts List of deductions elements and amounts Total amount to be paid Note: All earnings with classification Standard Earnings, Direct Earnings, Supplemental Earnings templates are displayed under Earning region, and all the deductions with classifications Voluntary and Involuntary deductions are displayed under deductions region. To generate the cheque payments, no set up is required in the implementation phase. Report Execution 1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is to be run and flow pattern Generate Check Payments:
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3.
Enter the parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is being run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
Organization Payment Method: Process the employees with the selected Organization Payment Method OPM.
Start Check Number: This is not applicable to the UAE. You can enter any value here.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to view results:
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6.
View the results:
7.
Select the generated file and view the output:
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Payslip You can generate a payslip for each payment made for an employee for a given pay period, after successfully completing the Event Archive for Payroll and Generate Cheque Payments or Direct Deposit processes. Information such as Employee Details, Payroll Information, Earnings, and Payment Methods are displayed in a payslip, as read-only. The payslip consists of the following regions:
Employee Details Payroll Information Summary of Payments Earnings Deductions Payment Information
Payslip Regions
This section describes in detail the content of each region and what you can set up in the implementation phase. Employee Details This region displays personal details of the Employee. This is predefined and the following details are displayed in this region:
Full Name Alternate Name Employee Number National Identifier Nationality Organization Job Position Grade Location
Payroll Process Information This region displays the details of the payroll that has been processed for the employee. This is predefined and the following details are displayed in this region: Period Type Period Start Date Period End Date Payment Date Basic salary No setup can be done on this region in implementation phase. Summary of Payments This region displays the payment summary derived from the payroll run.
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As by predefined setup set the following details are displayed in this region:
Total Earnings Total Deductions Total Pay: net pay value - difference between the total earnings value and the total deductions.
No setup can be done on this region in implementation phase. Earnings This region contains all the elements paid to the employee. Elements having the following primary classifications are considered to be payments:
Standard Earnings Direct Payments
For each element, whose calculation value is different from zero, amount and description are printed in the payslip. Any element, created at implementation phase, and having the above primary classifications are included in this region. Deductions This region contains all the employee deductions. Element having the following primary classifications are considered to be deductions: Involuntary Deductions Voluntary Deductions Pre- Social Insurance Deductions Social Insurance For each element, whose calculation value is not zero, the amount and description are printed in the payslip. Any element, created at implementation phase, and having the above primary classifications is included in this region. Payment Information This region contains details about the payment method and bank details for the employee to whom the payment has been made. This is predefined and the following details are displayed in this region:
Payment Method Bank Name Bank Branch Account Name/Cheque Number Amount
No setup can be done on this region in implementation phase. Report Execution
1. Select the Submit a Process or Report task in the Payment Distribution work area.
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2. Select LDG for which the process is to be run and flow pattern Generate Payslips:
3.
Enter the parameters used to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run. 4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success:
Review the report output in Oracle Business Intelligence Publisher: 6.
Navigate to Work Area Reports and Analytics
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7.
Within the folder structure Navigate to:
Shared Folders > Human Capital Management > Payroll > Regulatory and Tax Reporting > Emirates > AE Payslip
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Monthly Reports A set of reports to be executed after payroll processing have been predefined by UAE localization:
Form 1 Form 6 Monthly contributions - Private Sector Monthly contributions government sector
Form7
This section of the document provides additional detail on these reports.
Form 1 Form 1 - New Hires is an on-demand statutory report, which an employer must submit to the Social Insurance Office upon hiring an employee. This report contains the following blocks of information:
Employer Information Employee Personal Information Employee Qualification Information Employee Disability Information Employee Compensation Information
The setup for retrieving the information is predefined. You can find the content for the setup for this report in the section that contains employee compensation information. Elements that contribute to each information block are defined by the element classification. The mapping between fields in the report and element classifications or balances is documented in the UAE Reports Mapping.xls in MOS. Elements created during the implementation phase with classifications that are mapped to report fields, contribute to the values reported in those fields. Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Form 1:
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3.
Enter the parameters to run the report
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View Report results
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Form 6 Form 6 - Insured Details is a statutory report that an employer must submit to the Social Insurance Office at the end of each month. The report consists of information about the insured employees in the private sector. This report contains the following blocks of information:
Employer Information Employee Compensation Information
Setup for retrieving this report is predefined. You can find the content for the setup for this report in the section that contains employee compensation information. Elements that contribute to each information block are defined by the element classification. The details of the mappings between fields in the compensation section of the report and element classifications are documented in the UAE Reports Mapping.xls on My Oracle Support (MOS). Elements created at the implementation phase with classifications that are mapped to report fields will contribute to the values reported in those fields. Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Form 6:
3. Enter parameters to run the report;
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow.
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Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results
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Form 7 Form 7 - Monthly Movements is a statutory report an employer needs to submit to the Social Insurance Office at the end of each month. It contains details of newly hired employees, salary changes of existing employees, and terminated employees. This report contains the following blocks of information: Employer Information Summary of contributions for the current month Salary Information: New Employees Terminated Employees Other changes: Employees with Salary Changes. On each page, the report displays 5 hired employees, 4 salary changes and 4 terminated employees. Blank rows are displayed if there are no employees in a particular section. Setup for retrieving this report is predefined. You can find the content for the setup for this report in the section that contains employee compensation information. Elements that contribute to each information block are defined by the element classification. The details of the mappings between fields in the compensation section of the report and element classifications are documented in the UAE Reports Mapping.xls on My Oracle Support (MOS). Elements created during implementation phase with classifications that are mapped to report fields contribute to the values reported in those fields. Report Execution
1.
Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area
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2.
Select the LDG for which the process is to be run and flow pattern Run Form 7:
3.
Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results
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Monthly Contributions – Private Sector Monthly Contributions - Private Sector is a statutory report that an employer needs to submit to the Social Insurance Office at the end of each month. It consists of information about monthly contributions of private sector employers and their employees that is paid to the Social Security Office. This report contains the following blocks of information:
Employer Information Employee Identification Information Employee Compensation Information
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Employee and Employer Contributions
Setup for retrieving the information is predefined. The content that depends on set up in the implementation phase is the one related to the following sections:
Employee Compensation Information Employee and Employer Contributions
Elements that contribute to each box of these sections are defined by either one of these 2 methods:
Element Classification Elements feeding a specific balance
The mapping between fields in the report and element classifications or balances is documented in the UAE Reports Mapping.xls in MOS. Elements created at the implementation phase having classifications that are mapped to report fields, and feeding balances that are mapped to report fields contribute to the values reported in those fields. Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Monthly Contributions – Private Sector:
3.
Enter parameters to run the report:
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Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results:
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Monthly Contributions – Government Sector Monthly Contributions - Government Sector is a statutory report that an employer needs to submit to the Social Insurance Office at the end of each month and it details information about monthly contributions of government sector employers and their employees that are to be paid to the Social Security Office. This report contains the following blocks of information:
Employer Information Employee Identification Information Employee Compensation Information Employee and Employer Contributions
Set up for retrieving the information is predefined. The content that depends on set up in the implementation phase is the one related to the following sections:
Employee Compensation Information Employee and Employer Contributions
Elements that contribute to each box of these sections are defined by either one of these 2 methods:
Element Classification Elements feeding a specific balance
The mapping between fields in the report and element classifications or balances is documented in the UAE Reports Mapping.xls in MOS. Elements created at the implementation phase:
Having classifications that are mapped to report fields Feeding balances that are mapped to report fields
Will contribute to the values reported in those fields.
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Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Monthly Contributions – Government Sector:
3. Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
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6.
View report results:
Wage Protection System: Salary Information File Salary Information File is a statutory report that an employer needs to submit to a Wage Protection agent at the end of each month. The report details information about the wages paid to individual employees. This report contains the following blocks of information:
Employee Detail Record (EDR)
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Salary Control Record (SCR)
The setup for retrieving the information is predefined. You can find the content for the setup for this report in the section that contains employee compensation information. Elements that contribute to each information block are defined by the element classification. The mapping between fields in the report and element classifications or balances is documented in the UAE Reports Mapping.xls in MOS. Elements created during the implementation phase with classifications that are mapped to report fields, contribute to the values reported in those fields. Report Execution
1.
Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area
2.
Select the LDG for which the process is to be run and flow pattern Run Salary Information File:
3.
Enter the parameters to run the report
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
Employer Reference: Employer reference is a free text field of maximum of 35 characters.
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4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View Report results:
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Global Reports A set of global reports can be used to validate data included in UAE statutory reports. This section will contain additional information on these reports. Reports that can be used to validate data included in UAE statutory reports are:
Statutory Deductions Register Payroll Register Report Payment Register Report Gross to Net Summary Report
Statutory Deductions Register The Statutory Deduction Register lists the different deductions that localizations consider as statutory. More in detail it will display balances connected to the following balance groups:
GLB_TAX_DEDUCTIONS_BALANCE_GROUP
GLB_INVOLUNTARY_DEDUCTIONS_BALANCE_GROUP
GLB_SOCIAL_INSURANCE_DEDUCTIONS_BALANCE_GROUP
The connection between balance groups and defined balances is explained in balance groups and attributes section of the document. This report may be used, in conjunction with SOE, Balance Views and various payroll reports for diagnostic purposes, in order to verify the amounts deducted and submitted for each PSU. The Statutory Deduction Register provides the output in summary format where totals for each TRU are displayed with grand totals for each PSU. It also provides information in a detail format where deductions are listed against each employee categorized by PSU, TRU and element classification). The Statutory Deduction Register shows the amount on both Period-to-Date and Year-to-Date basis. It can be used to verify the Monthly Contribution report (both Private Sector and Government Sector), the total contributions as well as the Contributory Salary on those reports must match those shown on the Statutory Deduction Register. Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Statutory Deductions Register:
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3.
Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
Scope: Select either Summary or Detailed.
Payroll Period: Select the payroll period you want to run the report for.
Consolidation Group: Select the name of the consolidation group.
Payroll Statutory Unit: Limits the output to a specific PSU.
Tax Reporting Unit: Limits the output to a specific TRU.
Balance Category: Limits the output to a specific Balance Category, for example Standard Earnings.
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Payroll Relationship Group: Limits the output to a predefined group of Payroll Relationships.
Person: Limits the output to a selected person.
Hide Records with Zero Value: Select Yes if you want to limit the report to the non-zero balances.
Process Configuration Group: Select a Process Configuration Group if you want a log file generated for the report.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results:
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Payroll Register Report The Payroll Register is post-archive report acting both as a verification tool and an audit trail. This report has a summary and detail version. The summary report shows totals for hours, earnings, and deductions by payroll statutory unit and tax reporting unit, the detail report shows complete payroll run details for each employee. The Payroll Register Report retrieves archived payroll results, so ensure that run results have been archived before running this report. This report replicates the information shown on the payslip: once payslips are generated and stored, a professional user can run the Payroll Register Report to view payslip information for a group of employees. The report shows Run and Year-to-Date balance dimension. More in detail it will display balances connected to the following balance groups:
GLB_SUMMARY_GROSS_TO_NET_BALANCE_GROUP
GLB_GTN_EARNINGS (Balance Category: Hours)
GLB_GTN_EARNINGS (Balance Categories: Earnings and Supplemental Earnings)
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GLB_GTN_DEDUCTIONS (Balance Categories: Involuntary Deductions, Voluntary Deductions, Tax Deductions, Social Insurance Deductions, Pre-Statutory Deductions)
GLB_GTN_DIRECT_PAYMENTS (Balance Category: Direct Payments)
This report can be used to verify certain statutory reports such as Form 1, Form 2 and Monthly Contribution report (both Private Sector and Government Sector). Report Execution
1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is to be run and flow pattern Run Payroll Register Report:
3. Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
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Scope: Select either Summary or Detailed.
Payroll Period: Select the payroll period you want to run the report for.
Payroll Statutory Unit: Limits the output to a specific PSU.
Tax Reporting Unit: Limits the output to a specific TRU.
Payroll Relationship Group: Limits the output to a predefined group of Payroll Relationships.
Person: Limits the output to a selected person.
Hide Records with Zero Value: Select Yes if you want to limit the report to the non-zero balances.
Person Page Break: Select Yes if you want a Page Break after each Person’s report.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results:
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Payment Register Report Run the Payment Register to verify and provide an audit trail of payments generated. This report is a post-archive report and has a summary and detail version. The summary report shows total amounts paid by payment category, type, and method; the detail report shows payments for each employee. It includes payments generated by all payment processes, including external payments. Run Payment Register is an automatic task in the normal payroll cycle flow, occurring after payment generation, but can also be run as a standalone process in the Payment Distribution work area. You can run this report before or after generating payslips. On the Summary Report, each Payment Amount in the report must match the total paid through the corresponding payment method. That is, total Cheque payment must match the total of the payments generated by Cheque, and Payment Amount for EFT must match the Total on the EFT file.
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On the detailed Report, Payment Amount must match the Net Pay on the payslip and the total must match the Payment Amount on the Summary report. Report Execution
1. Select the Submit a Process or Report task in the Payment Distribution work area 2. Select the LDG for which the process is to be run and flow pattern Run Payment Register Report:
3.
Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
Scope: Select either Summary or Detailed.
Payment Process: Allows selecting a specific payment process for which data must be extracted.
Consolidation Group: Limits the output to a specific Consolidation Group.
Payroll Statutory Unit: Limits the output to a specific PSU.
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Payment Category: Limits the output to the selected Payment Category
Payment Type: Limits the output to the selected Payment Type
Payment Method: Limits the output to the selected Payment Method
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results:
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Gross-to-Net Summary Report The Gross-to-Net Summary Report provides the results of total payroll by earnings, deductions, and employer charges for a specified period. The report is classified by TRU and has summary and details sections. The Grossto-Net Summary Report has its own HCM Extract definition. The report displays the details of balances associated with the following balance groups:
GLB_GTN_EARNINGS
GLB_GTN_DEDUCTIONS
GLB_GTN_DIRECT_PAYMENTS
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GLB_GTN_EMPLOYER_CHARGES_GROUP_BALANCES
The connection between balance groups and defined balances is explained in balance groups and attributes section of the document. This report may be used in conjunction with SOE, Balance Views, and various payroll reports for diagnostic purposes, in order to verify the amounts deducted and submitted for each PSU. Report Execution
1. Select the Submit a Process or Report task in the Payroll Calculation work area 2. Select the LDG for which the process is to be run and flow pattern Run Gross-to-Net Report:
3. Enter parameters to run the report:
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll: Payroll definition for which payroll is to be run.
Process Start Date: Start date of the process for which the prepayment is run.
Process End Date: Start date of the process for which the prepayment is run.
Consolidation Group: Select the name of the consolidation group.
Payroll Statutory Unit: Limits the output to a specific PSU.
Tax Reporting Unit: Limits the output to a specific TRU.
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Process Configuration Group: Select a Process Configuration Group if you want a log file generated for the report.
4.
Click on Next twice and Submit the process.
5.
Verify that process runs to success and go to task to check results:
6.
View report results:
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Termination There are no separate post termination processes for UAE. Terminated employees are not considered for social insurance processing in the month of termination. Earnings can be paid after termination. In this case, it is important to check the payroll status of the payee to be sure that it is included in the payroll run. The possible HR statuses that can be enabled are:
Payroll Eligible - Payee is included in the payroll run.
No Payroll - Payee will not be included in the payroll run.
Process When One Time Element: Payee will only be included in the payroll run if that have a nonrecurring (unprocessed) element entry for the payroll period.
Process When Earning: Payee will only be included in the payroll run if they have an element entry, for the payroll period, for an earning having classifications with Process When Earning flag set to Yes.
A statutory report (Form 2) needs to be submitted to the Social Insurance Office by the employer upon terminating an employee’s service. The report is required by Social Insurance office within 30 days from the termination date of an employee. In the termination month, gratuity payment is automatically generated, if the employee is eligible. This amount is added to the employee’s net pay. Rules for determining the gratuity payment are described gratuity calculation section. When a terminated employee is rehired, the employee is treated as a new employee. There is no linkage to the old records of the employee. In effect, a rehire is treated as a new employee with a new payroll relationship.
Worked Example – Terminating an Employee This section describes termination of an employee and its effect of calculation and reporting. To terminate a work relationship: 1.
Log in with an HR Specialist role (HR_SPEC_ALL).
2.
Select Manage Work Relationship in the Person Management work area and select Terminate from the Actions menu.
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3.
On the Terminate Work Relationship page, enter the details of the termination, including the termination reason:
4.
Review and Submit.
End of Service Details Calculation Card
For employees for whom the registered for social insurance check box is set to No the action of termination the employee triggers the automatic creation of an End of Service details calculation card:
The card is created with the calculation component and component details and associations. You can review and edit the card, for example, to enter an override amount for gratuity.
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Running Payroll
After verifying that the calculation card is created February 2010 (month when the employee is terminated), payroll can by be run for Payroll Definition UAE Pay Doc and the following results are generated:
Note that:
Gratuity payment is triggered in line with the amount entered as override.
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Social insurance deductions are calculated to zero since we are in the month of termination.
This is also reflected in the prepayments:
Form 2 Form 2 - Terminations is a statutory report that an employer needs to submit to the Social Insurance Office, within 30 days, upon terminating an employee’s service. This report contains the following blocks of information:
Employer Information Employee Personal Information Employee Termination Information Employee Compensation Information
End of Service/Other Deductions Employee Banking Details
Setup for retrieving the information is predefined. The details of setup in the implementation phase are in the relevant sections containing:
Employee compensation information End of Service or Other Deductions
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Elements that contribute to each information block of these sections are defined by either one of these two methods:
Element Classification Elements feeding a specific balance
The mapping between fields in the report and element classifications or balances is documented in the UAE Reports Mapping.xls in MOS. Elements created at the implementation phase:
Having classifications that are mapped to report fields Feeding balances that are mapped to report fields
These elements contribute to the values reported in those fields. Report Execution
1. Select the Submit a Process or Report task in the Regulatory and Tax Reporting work area 2. Select the LDG for which the process is to be run and flow pattern Run Form 2
3. Enter the parameters to run the report
Payroll Flow: Identifier for the process that is being run. You can enter a value each time the process is executed. You can choose any format to describe the payroll flow. Payroll Statutory Unit: Payroll Statutory Unit for which the report is run.
Month: Month for which the report is run.
Year: Year for which the report is run.
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4. Click on Next twice and Submit the process. 5. Verify that process runs to success and go to task to check results:
6.
View Report results
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Conclusion This document has provided a set of information useful for anyone implementing or using Oracle Fusion Human Capital Management Payroll for United Arab Emirates. In order to verify that all the tasks needed in an Oracle Fusion Human Capital Management implementation have been performed, we recommend referring to the documents mentioned in the Other Information Sources section.
Glossary General Terminology consolidation group
A grouping of payroll runs within the same time period for which you can schedule reporting, costing, and postrun processing. Calculation card
A mechanism for capturing values required for calculating payroll deductions at the level of a payroll statutory unit, tax reporting unit, or payroll relationship. At the payroll relationship level, this is called a personal calculation card. calculation component
An individual deduction captured on a calculation card. Typically relates to a deduction element for which the calculation component creates an entry. flexfield
Grouping of extensible data fields called segments, where each segment is an attribute added to an entity for capturing additional information. legal employer
A legal entity that employs people. legal entity
An entity is identified and given rights and responsibilities under commercial law, through the registration with the country's appropriate authority. obligation. legislative data group
A means of partitioning payroll and related data. At least one legislative data group is required for each country where an enterprise operates. Each legislative data group is associated with one or more payroll statutory units. payroll statutory unit
A legal entity registered to report payroll tax and social insurance. A legal employer can also be a payroll statutory unit, but a payroll statutory unit can represent multiple legal employers.
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Oracle Fusion HRMS (UAE): Payroll
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Implementation and Functional Considerations July 2014
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