Payroll Essentials

Setting up Payroll

As per Core – HR Design, every employee assignment must have a payroll attached to it. The entity payroll, tells the system about the payroll frequency/ cycles, the valid payment methods, the check dates to which the assignment is entitled. Employees in a same payroll share the same payroll frequency and pay dates.

Payment Methods

Every organization has rules for its payment methods. Some organizations pay by Check, some by direct deposits to banks, and some even pay by cash. These methods of payments that an organization follows to pay its employees, is known as the Organizational Payment method.

Each employee of the organization may get to select the method with which s/he liked to be paid every pay period. These are the valid options that an employee can choose in order to get his salary. Some people like it on their bank account, some might like a check, and for some it could be both.

Each and every payroll clubs together a set of valid payment methods in it. So the available options can be specific to each payroll. For an example, an enterprise can define payment methods like this:

  • Weekly : Check only
  • Biweekly and Semi monthly : Check and Bank account (Automatic Transfer)
  • Monthly: Bank account only (Automatic Transfer).

The payment methods vary with the types of banks as well. For an example, if the enterprise deals with 4 different banks, like A, B, C and D. It will need four different payment methods defined for each of the banks it deals with, even though all of the payment methods will be of type ‘Automatic Transfer’.

Responsibility: HRMS Manager

Navigation: Total Compensation -> Basics -> Payment Methods

Steps: Create a new record and start filling in the details. See Figure 5.15 – Payment Methods.

Figure 15 Payment Methods

(Figure 5.15 – Payment Methods)

Consolidation Set

A consolidation set is a methodology that is used, to group payrolls with similar timelines together. This makes payroll process and post processes easy to manage and run. Although a lot of payrolls can be part of one consolidation set; every payroll must have one, and only one consolidation set attached to it.

Responsibility: HRMS Manager

Navigation: Payroll -> Consolidation

Steps: Create a new row with the name of the consolidation set. We can create as many as we want, based on our requirement. See Figure 5.16 – Consolidation Sets.

Figure 16 Consolidation Sets

(Figure 5.16 – Consolidation Sets)

Payroll Definition

Once the payment methods and consolidation sets are defined they can now be associated with the payroll definition, along with the time period and the costing information. So payroll definition is the screen where payment dates, check dates, consolidation set, a default payment method etc are assigned to a particular payroll.

Responsibility: HRMS Manager

Navigation: Payroll -> Description

Steps: Create a new record and fill in the details. See Figure 5.17 – Define Payroll.

Figure 17 Define Payroll

(Figure 5.17 – Define Payroll)

GL Flexfield Mapping

Payroll is all about paying salaries to employees. And the salary must be heaved from an account in the enterprise. Usually the labour cost is distributed based on different organizations that get benefited by the work. The distribution system is known as costing.

As discussed earlier, the costing information must be passed to the finance department in order to keep an account of labour cost. GL (Oracle General Ledger, a module in Oracle Financials) owns a key flex field known as Accounting flex field. Oracle financials uses the Accounting flex field to identify different accounts linked to the enterprise.

The GL Flex field mapping helps the system link different accounts setup in the HRMS system with the accounts available in GL (accounting flex field). In other words, with the GL Mapping we are going to establish a relationship between the Cost allocations KFF with the Accounting KFF. With this mapping in place, when the costing process (A post processing process) is run, it helps the system to carry the costing information to GL.

Responsibility: HRMS Manager

Navigation: Payroll -> GL flex field Map

Steps: Query the payroll and fill in the details. See Figure 5.18 – GL Flex Field Mapping.

Figure 18 GL Flex Field Mapping

(Figure 5.18 – GL Flex Field Mapping)

Element Sets

There will be many situations in payroll processing, where we need some kind of grouping to keep things in order and to keep them easy. Tools like, Element sets, or Assignment sets help us processing things easily on a group of elements / assignments, without any hassle of re-entering the Element Names and Assignment Numbers repeatedly.

To start with element sets, these are of three types:

  • Customization Set: A Customization set is used, to restrict the elements that can be entered or viewed on a configured version of the Element Entries window. It can also be selected for element entry purposes, using BEE in the Batch Assignment Entry window.
  • Run Set: In a situation where an Oracle Payroll user wants to run payroll for a given set of elements, rather running it on all elements; s/he can use a Run set to specify the elements to be processed in the run.
  • Distribution Set: An Oracle Payroll user can use a Distribution set to define the elements over which the costs of other elements are to be distributed.

Let’s look at the steps to configure an element set.

Responsibility: HRMS Manager

Navigation: Payroll -> Element Set

Steps: Create a new record and start entering the details. See Figure 5.19 – Element Sets.

Figure 19 Element Sets

(Figure 5.19 – Element Sets)

Assignment Sets

Assignment sets enable us to group a number of assignments together, and then run any process on them. Examples of its usage are, running payroll for a set of assignments, Loading Element entries for a set of assignments etc.

To create an assignment set:

Figure 20 Assignment Sets

(Figure 5.20 – Assignment Sets)

Responsibility: HRMS Manager

Navigation: Payroll -> Assignment Set

Steps: Create a new record and start entering the details. See Figure 5.20 – Assignment Sets.