Oracle White PaperConfiguring Elements for Compensation

An Oracle White Paper

Updated February 2015

Configuring Payroll Elements for Use in

Oracle Fusion Compensation

Oracle White PaperConfiguring Elements for Compensation

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Oracle White PaperConfiguring Elements for Compensation

Introduction........................................................................................ 4
How Payroll Elements Are Used in Oracle Fusion Compensation ..... 4
Prerequisites to Using Payroll Elements ............................................ 5
Configuring Payroll Elements for Compensation ................................ 5
Basic Information ........................................................................... 7
Additional Details ........................................................................... 9
Configuring Input Values ................................................................... 9
Defining Element Eligibility .......................................................... 10

Oracle White PaperConfiguring Elements for Compensation

Introduction
Oracle Fusion Compensation and Oracle Fusion Total Compensation Statement customers
use payroll elements to capture compensation in Oracle Fusion, transfer compensation to
payroll providers, and to store custom worker-level data.
This document describes how payroll elements are uses in Oracle Fusion Compensation and
how the elements should be configured for specific compensation usages. This document
does not describe how to set up any prerequisite payroll objects required to use payroll
elements in the ways described. It also does not describe how to set up related compensation
objects. Please refer to the implementation guides for setup help.

How Payroll Elements Are Used in Oracle Fusion Compensation

You link payroll elements to salary bases, individual and workforce compensation plans, and total
compensation statements.

The element linked to a salary basis is used to create element entries used to pass salary
amounts to payroll.

The defined input value for the element linked to the individual compensation plan option is
used to capture the award amounts as well as display any related details during the award
process. Costing is also determined by the elements used.

The element linked to a non-salary workforce compensation component is used to create

element entries, such as for lump sum awards. Stock awards can also be passed to element
entries or can be posted to the Oracle Fusion stock table directly. The Transfer Data to HR
process creates element entries for each worker who received an amount for the component
linked to the element.

The actual compensation displayed in total compensation statements is configured as

compensation items. Payroll elements are one source that can be mapped to these items.

You can also use payroll elements to store custom worker-level data. You can create an information
element with multiple input values that hold data required to be referenced or used in a calculation
during a compensation cycle. Element entries can then be defaulted into Workforce Compensation
columns, used in fast formulas, or can be used as a source of a compensation item in a total
compensation statement.

Oracle White PaperConfiguring Elements for Compensation

Prerequisites to Using Payroll Elements

All Oracle Fusion Compensation customers with or without an Oracle Fusion Global Payroll Interface
or Oracle Fusion Global Payroll license must define payroll statutory units using the Manage Legal
Entities task. You must also associate a legislative data group with each payroll statutory unit using the
Manage Legal Entity HCM Information task. Performing these tasks ensures that payroll relationship
records are created automatically when you hire workers. Workers must have a payroll relationship so
that you can create element entries for them.
Payroll Definitions

The payroll definition supplies each workers pay period frequency and end dates. Even when using a
third-party payroll provider, you must define a payroll if any of the following conditions apply.

You want to use nonrecurring elements.

You store salary or other element entry information at the employment terms level.

You want to create a salary basis that uses a frequency of Payroll period.

You are implementing total compensation statements.

You use recurring elements and you want total compensation statements to prorate
salary element entries when a worker is hired or terminates within a payroll period.

You want to enable workers to drill into total compensation statement details to see
payroll period amounts.

You license Oracle Fusion Global Payroll Interface.

If you use only recurring elements that are defined at the assignment level and also store salary at the
assignment level for a legal employer, you do not have to define payroll definitions. However, if you
use compensation history, all compensation awards appear under the recurring payment sections as
end-of-year amounts.
Consolidation Groups

If you create payroll definitions, you must also define Consolidation Groups. There must be at least
one consolidation group for each legislative data group for which you are defining elements.

Configuring Payroll Elements for Compensation

How you configure your payroll elements affects if and how the element can be used for compensation
business processes. This section only discusses payroll element configuration that affects your ability to
use the element in compensation.

Oracle White PaperConfiguring Elements for Compensation

Primary Classification

When creating a payroll element, you first select the legislative data group (LDG). The LDG
determines the list of Primary Classifications from which you can choose.

Figure 1. Create Element Dialog Window

Note: The following guidance is based on a US LDG and is a suggestion only. There is no restriction
to using different primary classifications.

For elements linked to salary bases, select Standard Earnings.

For bonus or lump sum elements linked to individual or workforce compensation plans, select
Supplemental Earnings.

For worker savings and contribution deductions linked to individual compensation plans,
select Voluntary Deductions or Pretax Deductions as appropriate.

To create an element to store custom worker data, select Information. Also use this
classification for stock awards.

The Secondary Classification is optional and can be left blank.

Oracle White PaperConfiguring Elements for Compensation

Basic Information
Currency

When linked to a salary basis, the input currency determines each workers local salary currency.
When configuring workforce compensation components, the local currency determination code of
Salary Basis Currency is derived from the currency set in the element linked to the workers salary
basis.
When linked to an individual compensation plan, the element input currency determines the currency
in which the award amount is entered and displayed.
Durations

For salary elements, answer No to the question Should every employee eligible for the element automatically
receive it? Answering yes results in the application automatically creating salary element entries for every
assignment, which creates overlapping entries when trying to load salary using file based loader (FBL).
This will also prevent you from being able to allow multiple entries in the same payroll period which is
required if you link the same salary element to multiple salary bases.
Standard Rules
Employment Level

For salary elements, the employment level at which the element is associated must match the salary
level defined for the legal employer. For example, in a 2-tier employment model, salary must always be
held at the assignment level, so the element should be associated at the assignment level. In a 3-tier
employment model, if salary is held at the terms level, the element must also be defined at the terms
level. If salary is held at the assignment level, the element should be associated at the assignment level.
In addition, elements linked to salary bases that use the frequency of payroll period must be
associated at the terms level.
Recurring or Nonrecurring

You must set up and assign each worker to a payroll to use non-recurring elements. Payrolls must be
defined with valid time periods for non-recurring element entries to be created. Without valid time
periods, the application is unable to find the payroll period for the effective date of the element entries.
To avoid having to set up payrolls, you can also use recurring elements, although this is not the
recommended approach.
Salary elements should always be set up as recurring.
Bonus and lump sum elements mapped to individual and workforce compensation plans should be set
up as nonrecurring if the amounts are one-time payments. Though you may use recurring elements, if

Oracle White PaperConfiguring Elements for Compensation

you include these recurring elements in compensation history, the award amounts appear under the
Recurring Payments section as end-of-year amounts, which may be misleading to workers.
Allow Multiple Entries

The same salary element can be linked to multiple salary bases if the element is configured to allow
multiple entries. This is specified by answering Yes to the question Can a person have more than one entry of
this element in a payroll period? The same currency must be used for all salary bases that use the same
payroll element.
Likewise, the same bonus or lump sum element can be linked to multiple individual compensation
plans and workforce compensation plans if multiple entries are set to Yes.

Figure 2. Create Element: Basic Information

Oracle White PaperConfiguring Elements for Compensation

Additional Details
Additional details can be configured for recurring elements when you have also implemented Oracle
Fusion Global Payroll Interface and Oracle Fusion Global Payroll. When those applications are not
implemented, this page does not appear.

Configuring Input Values

The Amount input value is created by default for elements defined with a primary classification of
standard or supplemental earnings for customers with an Oracle Fusion Global Payroll Interface
license when the payroll element calculation rule is flat amount. The Amount input value is not
automatically created by default for customers with only an Oracle Fusion Compensation license.
Salary Elements

If you are a payroll customer, you can use the automatically created Amount input value as is. No
additional configuration is required. If the input value is not created automatically, create a monetary
input value. Input values must be monetary to link to a salary basis.
In addition, a Periodicity input value is required. If you use a primary classification of Standard
Earnings, the periodicity input value will be automatically created. If you use a primary classification of
Information, you must create the Periodicity input value manually.
Bonus or Lump Sum Elements

The automatically created Amount input value is also identified as the primary input value and allows
user entry. You can use this input value as is. No additional configuration is required to attach this
element to workforce compensation plan component or an individual compensation plan option.
If you do not want to use the Amount input value, then whichever input value you link to your plan
option must be marked as the primary input value in the Special Purpose field. Element entries are
created for the primary input value only.
You must define separate payroll elements for each workforce compensation component and each
individual compensation plan option. It is not possible to link the same element but different input
values to different components or options within the same plan.

Oracle White PaperConfiguring Elements for Compensation

Figure 3. Element Summary: Amount Input Value

Individual Compensation Plan Input Values

For individual compensation plans only, you can define a minimum and maximum amount for the
award invoked when awarding individual compensation to workers.
You can also define and display additional input values that contain supporting or extra information
required to make informed compensation decisions. This additional detail is displayed in the details
region of the allocation window.

Defining Element Eligibility

You must define element eligibility for all elements used in compensation. This determines which
employees can receive the element entry.

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Oracle White PaperConfiguring Elements for Compensation

Figure 4. Element Summary: Create Element Eligibility

Always create open eligibility, which does not define eligibility criteria on the element, by entering a
name for the element eligibility and submitting it. Compensation eligibility is determined by the salary
basis or compensation plan to which the element is linked. Only workers who are given a salary basis
with the element linked to it, or who are eligible for the compensation plan to which the element is
mapped are eligible to receive it.
Also, ensure that the effective date of the element eligibility record for the salary element is the same as
the effective date of the element and that the Automatic entry checkbox is left clear. As stated
previously, if you select this option, the application automatically creates salary element entries for
every assignment, which creates overlapping entries when trying to load salary using file based loader
(FBL).

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Oracle White PaperConfiguring Elements for Compensation

Figure 5. Create Element Eligibility: General Information

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Configuring Elements for Compensation

Copyright 2013, Oracle and/or its affiliates. All rights reserved. This document is provided for information purposes only and the

February 2015

contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other

Author: Michele Chung

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