How it works (Salaried Employees)

1. The system finds the pay cycle in Payroll Module based on the Effective Date.
If the cycle is uncommitted and/or reversed and the employee is in the pay cycle then the cycle changes are inserted. The four (4) cycle changes generated for salaried employees are as follows:

How it works (continued)

1. If the payroll is run or reversed and the said employee is not in the reverse, then the above cycle changes are entered in the next uncommitted cycle for the employee. 
2. If the effective date falls before the start date of the next uncommitted cycle for the employee,the  above cycle changes are generated in the next uncommitted cycle for the employee.
3. Pro-ration - if the effective date does not fall at the start of the cycle then the amounts are pro-rated – the employee is paid at the old rate for the period before the effective date and at the new rate for the period of the cycle after the effective date. The formula is:

Amount = ((Old cycle rate x (number of days between the start of the cycle and the effective date –1)) + (new cycle rate x (number of days between the effective date and the end of the cycle)))/total number of days in the cycle.

• A Timesheets...Regular Earnings cycle change is entered in the next uncommitted cycle for the employee for this pro-rated amount. In the cycle following this, Pay Profile...Salary Change and Timesheets...Regular Earnings cycle changes are entered for the new cycle rate.

4. Retroactive Payments - retroactive payments are made as an ‘Other Income’ payment if:

• the effective date falls before the start date of the next uncommitted cycle for the employee;
• there is an increase in salary;
• there is a relevant Transactions-Payroll link set up for retroactive payments re: salary changes (Personnel>>Transactions>>Transactions-Payroll Linkages).
• there are enough uncommitted pay cycles for the employee to complete the transaction.

• If the effective date is the start of a cycle then retroactive payments are made for the number of cycles from that cycle up to, but not including the cycle in which the payment is to be made.
• If the effective date is not the start of a cycle then the retroactive amounts are pro-rated. The formula is:

((Number of days between the effective date and the end of the cycle/total number of days in the cycle) * salary adjustment) + (number of cycles between the cycle in which the effective date falls to the cycle in which the payment is to be made, but not including these cycles * salary adjustment).

5. Other:

• If Pay Profile...Salary Change and/or Timesheets...Regular Earnings cycle changes exist prior to the salary change transaction, the values will be summed. The same applies for retroactive payments.
• The cycle change is created on the insertion of the salary change transaction. As long as the ‘next uncommitted cycle’ for the employee is not run for that employee, you can edit the Salary Change Transaction.
• The salary change transaction is posted if the ‘next available cycle’ is committed for the employee and unposted if the cycle is uncommitted.
• A P...S...A (Pay Profile...Status Change...Active) cycle change is inserted in the next available cycle.
• If a P...S...I (Pay Profile...Status Change...Inactive) cycle change exists for the employee in this cycle, it is changed to a P...S...A (Pay Profile...Status Change...Active). If the salary change transaction is deleted, the P...S...A (Pay Profile...Status Change...Active) cycle change is reverted to a P...S...I (Pay Profile...Status Change...Inactive).
• Rehired Employees – Since it does not make sense to have the effective date of a salary change before the rehire date of an employee, if an employee is rehired in the cycle in which the salary change is being effected and is after the effective date of the salary change, the rehire date is used to prorate salaries instead of the effective date of the salary change