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7

Rate Definitions, Elements, and


Formulas

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Objectives

After completing this lesson, you should be able to:


• Describe the usage of rate definitions in absences.
• Describe how to associate a rate definition with an absence plan.
• Describe the aspects of a rate definition.
• Describe the usage of elements in absences.
• Describe the usage of formulas to extend the Absence Management functionality.

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Rate Definition Defined

It is a calculation method to determine the pay rate of workers based on compensation


attributes and periodicity.
• Example rate definition: Calculate worker earnings per day during an absence period
based on salary and bonus payments.

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Rate Definitions in Absence Management

• You can create rate definitions in Absence Management. However, you calculate and
resolve the rates only in Global Payroll or a third-party payroll application.
• You can use rate definitions as placeholders for use in third-party payrolls.

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Using Rate Definitions in Absence Plans

• For qualification absence plans:


– Calculate worker earnings during the absence period
• For accrual absence plans:
– Partially disburse accrual balances
– Calculate final accrual balance when a worker is terminated or loses eligibility
– Book liability of accrual balances
– Differentiate payment rate during an absence period

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Creating Rate Definitions in Absence Management

Create rate definitions using the Manage Rate Definitions task in the Tasks panel drawer:

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Rate Hierarchy

The following rate hierarchy determines which rate to use in the absence payment
calculation:

Level Rate

First Rate Definition in Absence/Accrual Plans

Second Rate Definition in Absence Elements

Third Basic Salary

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Aspects of a Rate Definition

To create rate definitions, configure the following attributes:


• Rate contributors
• Periodicity
• Reference date
• Factor value
• Minimum and maximum value

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Creating Rate Contributors

Use the Create Rate Definition page to define the rate contributors and the rate.

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Defining Periodicity

• Calculate all rates for a defined periodicity, such as hourly, daily, weekly, monthly, or
payroll period.
– For example, for a maternity qualification plan, you might want to convert the absence
payment rate to a weekly figure.

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Selecting Reference Date

• When you define a rate contributor, you might want to select a reference date by which
the application retrieves rate contributor information for use in the rate calculation.
– For example, to retrieve a rate as of the actual start of an absence, select Absence
Start Date.

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Applying Factor Value

• A factor value is a number by which you want the application to multiply the value of a
rate contributor.
– For example, you want to apply a factor of 1.0 or 100 percent to the salary balance
contributor and a factor of 0.5 or 50 percent to the bonus balance contributor.

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Specifying Minimum and Maximum Values

• Calculate and compare the specified rate definition to the minimum and maximum
values that you define.
• If the rate falls below the minimum or above the maximum, the application uses the
value specified rather than the calculated rate.
• Define the minimum and maximum values on the Create Rate Contributors page.

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Associating Rate Definitions with Absence Plans

• Associate the rate definition with the absence plan on the Entries and Balances tab of
the Create Absence Plan page.

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Demonstration

7-1: Creating a Rate Definition

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Elements Defined

Elements are building blocks that help determine the payment of base pay, benefits,
absences, and other earnings and deductions.
You associate your elements with salary bases, absence plans, and the benefits object
hierarchy to determine how you'll use the elements.

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Creating Absence Elements

Create an absence element for each absence plan that transfers absence payment
information for payroll processing.

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Associating Elements with Absence Plans

• Associate the element with the absence plan on the Entries and Balances tab of the
Create Absence Plan page.

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Retroactive Processing of Absence Elements

Absence elements can be set up for retroactive processing to deal with absences that are
corrected or withdrawn.

Element Name Purpose

Entitlement Retro Used to process absence payments and


deductions in retroactive processing

Discretionary Disbursement Retro Used to process these disbursements in


retroactive processing

Final Disbursement Retro Used to process these disbursements in


retroactive processing

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Demonstration

7-2: Creating Payroll Elements

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Fast Formulas

Oracle Fusion Fast Formulas enable you to:


• Extend Absence Management functionality.
• Write formulas using English words and basic mathematical functions.
• Write generic expressions for any calculation or comparison you might want to repeat
with different input values.

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Formula Usage for Accrual Plans

Use formulas as an alternative to these delivered accrual plan rules:


• Enrollment start and end dates
• Plan duration UOM conversion
• Anniversary event date
• Accrual entitlement rules
• Rate definitions

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Formula Usage for Qualification Plans

Use formulas as an alternative to these qualification plan rules:


• Plan term
• Enrollment start and end dates
• Entitlements
– End date
– Bands
– Payment percentage rules

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Formula Usage for Absence Types

Use formulas as an alternative to these absence type rules:


• Duration UOM conversion
• Absence type validation

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Formula Types

The Formula Type determines:


• How the formula can be used
• Which rules about inputs and outputs apply
• Which contexts are automatically available to the formula
Example: Global Absence Roll Backward Start Date
• Use this formula type to define your own rules about when the rolling backward plan
term starts.

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Formula Components

• Variables • Literals
• Assignment statements • Database items
• Return statements • Working storage area
• Input statements • Calls to other formulas
• Expressions • Functions
• Conditions • Operators
• Comments

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Absence Formula Example

Formula to return the entitlement end date by adding six months to the absence start date:

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Quiz Q
Rates can be defined and calculated in absences.
a. True
b. False

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Quiz Q
The following rate rules are available on the Entries and Balances tab when creating a
qualification plan:
a. Absence Payment Rate Rule
b. Final Balance Payment Rate Rule
c. Partial Disbursement Rate Rule
d. All of the above

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Quiz Q
Formulas are used in Absence Management as an alternative to delivered:
a. Accrual plan rules
b. Qualification plan rules
c. No entitlement plan rules
d. Absence type rules
e. All of the above

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Quiz Q
If you measure a plan using a different unit than an absence type, then you use a conversion
formula to convert the unit of the absence type to that of the absence plan.
a. True
b. False

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Summary

In this lesson, you should have learned how to:


• Describe the usage of rate definitions in absences.
• Describe how to associate a rate definition with an absence plan.
• Describe the aspects of a rate definition.
• Describe the usage of elements in absences.
• Describe the usage of formulas to extend the Absence Management functionality.

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