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Oracle Payroll
Oracle Payroll:

Oracle Payroll provides you with the flexibility you require to run your regular pay
cycle in the best way to meet your business needs.

Payroll Process:

1. Payroll Run Process

2. Pre-Payment Process
3. Payment Process
4. Costing Process
5. Transfer to GL Process
Payroll Run Process

Payroll Run Process calculates the gross to net payment for employees.

1. Determine Assignments and Elements

First Phase of the payroll run process is to determine the assignments and elements
to be included in the current batch. According to Assignment set and Element set
specified in the batch submission.

2. Process Each Assignment

2-A) Element Entry Processing

Element Entries hold the entry values (that are input to the gross to net
calculation).The result of processing each entry value is a run result value.

2-B) Processing Priority

The sequence of processing entries for each assignment is determined by the

processing priority of the element type and sub priority order of each entry.
2-C) Termination Processing

Payroll run implements the entry processing rules for a terminated assignment.

3. Create Run Results and Values

For every entry that is processed there must be a run result. If these do not already
exist, by pre–insertion, then the appropriate run results and values are created in
memory and are inserted into the database, ready for Payroll Run to process.

4. Element Skip Rules

Element Skip Rules enable you to define specific formula criteria to determine
whether an entry is processed or not. A skip rule formula must return a skip_flag
value of Y or N.

5. Element Entry Processing Modes

6. Table Impacts :

Pre-Payment Process
It distributes employee’s pay over the payment methods employees have requested.
It also allocates payments to third parties. It prepares payments for each assignment
and inserts the results into PAY_PRE_PAYMENTS for each payment method for an
assignment.

1. Setting up Payment Methods

The Pre–Payments process prepares payments following the payment methods for
each assignment. There are three predefined payment types that Oracle Payroll
processes:

• Cheque/Check
• Magnetic Tape (such as NACHA/BACS)
• Cash (U.K. only)

Payment methods are processed in order of their priority for an assignment.

2. Prenotification (Prenoting)

Prenotification validation (also known as prenoting) applies to paymentmethods of

the type Magnetic Tape. This validation is performed when bank details require
checking before a payment can be made. For example, when an employee has
changed banks or changed bank details. When an employee has changed bank or
bank details, a payment value of zero is made to the employees bank account. The
payment is then made by subsequent methods, or by the default method.

3. Consolidation Sets

Pre–Payments is run for a consolidation set

4. Third Party Payments

Third party Payments are post Tax deductions from an employee’s salary, that are
paid to organisations or individuals. The element entry that produces the run result
value for the payment holds details of which payment method to use. This allows the
same third party element type to have two entries that are paid to different parties
for an assignment.

5. Exchange Rates

Pre–Payments calculates the currency conversion if the payment is in a different

currency to that of the remuneration balance (the element output currency in the
case of third party payments). If the process cannot find the exchange rate for the
two currencies, it creates an error for the assignment.

6. Overriding Payment Method

You can specify an overriding payment method when making a prepayments run.
This method overrides the personal payment methods, so the full amount of the
payment is made. The only
exceptions are the third party payments, these are paid as per the method specified
for them.
The overriding payment method can be either:
• Cash
• Cheque
You cannot specify magnetic tape payments as an override method, as this type of
payment requires prior knowledge of bank account details.

7. Table Impacts
 Payment Process

The payment processes take the unpaid prepayment values allocated to each
payment type and produce the required payment file.There are three types of
payment process that you can run:

• The Magnetic Tape process – MAGTAPE (BACS or NACHA)

• The Cheque process – CHEQUE
• The Cash Payments process – CASH

Recording Manual Payment

You can also record any manual payment you make to a specific employee. This has
the effect of marking the prepayment as paid. The Payment process take the unpaid
prepayment values allocated to each payment type and produce the required
payment file.

Magnetic Tape Process

The Magnetic Tape process generates the payment due and writes the data to a file
on magnetic tape. It is this tape that is taken to the bank for payment.

There are two types of magnetic tape file:

1. Payments
2. End of year tax reporting

Cheque Writer/Check Writer Process

Cheque Writer process to produce cheque payments for unpaid pre–payment actions.
Before you run the process, you need to set up certain things, for example, the
SRW2 report and the ’order by’ option to sequence cheques, (if required).
You run Cheque Writer through Standard Reports Submission (SRS).

Cash Process

The Cash process indicates the system that payment has been made,and prevents
pre–payments from being rolled back.
Note: This is a UK–only process.

Costing Process

The Costing process allocates payroll run results to cost segments and it accumulates
results for transfer to the General Ledger.

Table Impacts
 Costing of Payment

Costing of Payment process generates costing entries to be transferred to GL but it

generated costing entries employee wise. For Example as a result of this process one
costing entry will be generated against one employee whereas Costing Process generates
costing entries element wise. Mainly this process is used by companies which use Oracle
Cash Management. When bank send advise for payments released to employees, through
cash management you can reconcile it if you have already run Costing of Payments process.
 Transfer to the General Ledger Process

After you have run the post–run process Costing (that accumulates costing results),
you are ready to transfer the results to the General Ledger or other systems.Transfer
to the General Ledger process transfers cost information to Oracle General Ledger
interface tables.

Table Impacts