Processing payroll is a very typical and fundamental business requirement across enterprises. If we have human resource, we will have to pay them. This sounds pretty simple. When we have 10 odd employees working in our firm, and we write checks for them; this can be done with the help of a spreadsheet and it won’t take a lot of time or resource to get something of this sort to be done. But let's think about a big enterprise. Processing payroll for a big enterprise is a gigantic task to do. It takes a lot of preparation just for the payroll processing and again a lot of post execution steps to make sure all the data are accurate and stored for further usage.

Do we simply write checks? What exactly do we do in the entire payroll process?

We do a lot of stuff, like calculating an employee's salary, calculating the amount to be paid per pay period. Determining how to pay, by check or by direct deposit into a bank? Figuring out if he had worked for the entire period, or was he on leave; if so, does that entail cutting off some portion of his salary? OK, Once we know, how much to pay. What next? Taxes, what are his incomes/ earnings? What should we deduct? Calculating the taxes based on that, again processing the payroll, getting the checks / direct deposits in place. After all that we should let our bank know, to debit that salary into his account. Will have to let my ledger books know; out of which budget, how much has been given as pay checks. So there are a lot of things.

Imagine doing all these by ourselves, without any software in place. Won’t we have to run another enterprise, just to process pay checks for our firm? Yes it might take those many numbers of people, just to do that job right. We are here to avoid that. We will use Oracle Payroll for our firm.

Let’s take two minutes, and imagine Oracle Payroll has been successfully implemented in our firm. Now we are trying to run our Payroll. For that Processing portion of it, Oracle payroll, divides the entire payroll process in to three broad divisions:

  • Pre-Processing
    • Capturing salary
    • Capturing time cards
    • Running BEE process
  • Processing
    • PYU_GEN Process
    • Retry and Rollback
    • Quick pays
  • Post-Processing
    • Running Payroll Registers
    • Tax remittance
    • Gross to Net Calculation
    • Determining Payment Methods
    • Check writers / BACS / NACHA/ ACS / Garnishments / Manual Payments
    • Payment Register
    • Retro-Pay
    • Reversals
    • Advance Payments
    • Archivers
    • Costing
    • Transfer to GL

A lot of words here sound like a foreign planet language, don’t they? We will go through each and every step of it to understand what exactly happens in the entire course of payroll processing. However we will have to first get Oracle Payroll Implemented and running.


This chapter talks about:

  • Oracle Payroll as a module
  • Components of payroll: Earnings, Deductions, Taxes, Elements, Input values, Balances
  • Different Payment Methods and Payment Frequencies
  • Setting up payroll for an Enterprise
  • Pre-Processing Steps: Pre-Payments to Transfer to GL
  • Payroll run validation and correction methodologies
  • Retro Pays
  • Case Studies

Learning Outcomes

After going through this Chapter, you should be able to:

  • Understand the basic components of payroll and relate them to a real time pay check
  • Set up Oracle payroll for an Enterprise
  • Process the payroll for an Enterprise
  • Process and validate the payroll processes and supporting reports
  • Run a retro pay