Payroll Fund Config Ag

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D65980
Edition 1.0
March 2010
D60571GC10
(Global)
Activity Guide
R12.x Oracle Payroll
Fundamentals: Configuration
Oracle University and Cyret Technologies India Privat Limited use only
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Author
Swathi Mathur
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Bob Oganovic
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Table of Contents
R12.x Payroll Fundamentals: Configuration Practices and Solutions........................................................1-1

R12.x Payroll Fundamentals: Configuration .................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Payroll Configuration - Introduction .............................................................................................................1-5
Payroll Configuration Fundamentals .............................................................................................................1-6
Defining Payrolls for Your Organization ......................................................................................................1-7
Practice: Defining Payment Methods ........................................................................................................1-8
Solution: Defining Payment Methods........................................................................................................1-10
Practice - Defining Consolidation Sets ......................................................................................................1-15
Solution: Defining Consolidation Sets ......................................................................................................1-16
Practice: Defining a Payroll.......................................................................................................................1-17
Solution: Defining a Payroll ......................................................................................................................1-20
Maintaining PAYE and NI (U.K. only).........................................................................................................1-25
Practice: Entering NI Details for a Company Director ..............................................................................1-26
Solution: Entering NI Details for a Company Director .............................................................................1-27
Practice: Entering PAYE Details for an Employee ...................................................................................1-29
Solution: Entering PAYE Details for an Employee...................................................................................1-30
Practice: Entering NI Details for an Employee..........................................................................................1-31
Solution: Entering NI Details for an Employee .........................................................................................1-32
Maintaining Other Deductions (U.K. Only) ..................................................................................................1-35
Practice: Maintaining Student Loans .........................................................................................................1-36
Solution: Maintaining Student Loans ........................................................................................................1-37
Practice: Maintaining Tax Credits .............................................................................................................1-38
Solution: Maintaining Tax Credits ............................................................................................................1-39
Costing Overview ..........................................................................................................................................1-41
Processing Costs ............................................................................................................................................1-42
Guided Demonstration - Previewing Cost Allocations..............................................................................1-43
Practice - Allocating Costs ........................................................................................................................1-44
Solution - Allocating Costs........................................................................................................................1-46
Payroll Configuration - Summary .................................................................................................................1-58
Copyright © Oracle 2009. All rights reserved.
R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

i
Preface
Profile
Before You Begin This Course
• Working experience with Oracle Applications
• Working experience with earnings and deductions elements in Oracle HRMS
Prerequisites
• D48180GC10 R12 HRMS Total View
• D60573GC10 R12 Compensation Management Fundamentals: Earnings and

Deductions
• D47341GC10 R12 Compensation Workbench and Salary Configuration
• D17308GC10 11i Compensation Management Fundamentals: Earnings and Deductions
How This Course Is Organized
This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.

iii
Related Publications
Oracle Publications
Title Part Number
Oracle HRMS Payroll Processing Management Guide E13514-03
Additional Publications
• System release bulletins
• Installation and user’s guides
• Read-me files
• International Oracle User’s Group (IOUG) articles
• Oracle Magazine

iv
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, “Working with
initial caps; Objects.”
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
Arrow Menu paths Select File > Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

v
Typographic Conventions in Code

Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott
IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (‘prod_pie_layer’))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.
2. (M) From the menu, select Query then Find.
3. (B) Click the Approve button.
Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
(ST) = Sub Tab

viii
Typographical Conventions in Oracle Application Help System Paths

This course uses a “navigation path” convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
The following help navigation path, for example—
(Help) General Ledger > Journals > Enter Journals
—represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General Ledger entry.
2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the help system
window.

vii
viii

R12.x Payroll Fundamentals:
Configuration Practices and
Solutions
Chapter 1
R12.x Payroll Fundamentals: Configuration Practices and Solutions

Chapter 1 - Page 1

Chapter 1 - Page 2

Chapter 1 - Page 3
R12.x Payroll Fundamentals: Configuration

Objectives

Chapter 1 - Page 4
Payroll Configuration - Introduction
There are no Practices and Demonstrations in this Lesson.

Chapter 1 - Page 5
Payroll Configuration Fundamentals

Chapter 1 - Page 6
Defining Payrolls for Your Organization

Chapter 1 - Page 7
Practice: Defining Payment Methods

Overview
In this practice you will learn how to define the following Payment Methods for your Organization
using the same source bank payroll account:
• Cheque
• Direct Deposit
• Third Party Payment
Assumptions
• You can use the OU HRMS Manager or OU Super HRMS Manager responsibility to
perform this task. In this practice, we log in as ouhrms/welcome and use the OU HRMS
Manager responsibility.
• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.
• Set your effective date to 01-JAN-2000.
• This practice covers only the required steps for performing this task.
• Replace xx with your initials or the unique group identifier provided by your instructor.
Tasks
Login
Login to Vision and navigate to the Organizational Payment Method window.
Define a Cheque Payment Method

Enter the required fields for a Cheque Payment Method to define currency, source bank details,
and GL cash account.
Define a Direct Deposit Payment Method

Enter the required fields for a Direct Deposit Payment Method to define currency, source bank
details, and GL cash account.
Define a Third Party Payment Method

Enter the required fields for a Third Party Payment Method to define currency, source bank
details, and GL cash account.

Chapter 1 - Page 8
Solution: Defining Payment Methods

Login
1. Navigate to the Organizational Payment Method window:
(N) Payroll > Payment Methods
2. Set your effective date for this exercise to 01-JAN-2000.


Chapter 1 - Page 9
Define a Cheque Payment Method

3. Enter Cheque_xx as your payment method name.
4. Select Cheque-United Kingdom as the payment method type.
5. Leave the Third Party Payment box unchecked.
6. Select United Kingdom as the Source Bank-Country.
7. Enter the following GB Bank Details:
Sort Code
Bank Name
Bank Branch
Account Number
Account Name
Account Type
8. Navigate to the General Ledger Tab.
9. Select Vision Corporation UK as your Ledger.
10. Enter the following details for - Cash Account: (Corporate Accounting Flex)
Company - select 99 Vision Corporation
Department - 400 Sales
Account - select 2110 Payable to Bank Current.
Intercompany - 00 Default
11. Save your work.
12. Close the window.
Define a Direct Deposit Payment Method

15. Enter Direct Deposit xx as your payment method name.
16. Select BACS Tape as the payment method type.
17. Leave the Third Party Payment box unchecked.
Sort Code
Bank Name
Account Name
Account Type
20. Enter the following Further Information:
BACS User Number
BACS Limit
22. Enter the following details for GL Cash Account:
Company - select 99 Vision Corporation.

Chapter 1 - Page 10
Department - select 400 as your department.

Intercompany – 00 Default
23. Save your work.
Define a Third Party Payment Method

26. Enter Third Party xx as your payment method name.
27. Select Cheque-United Kingdom as the payment method type.
28. Check the Third Party Payment box.
Sort Code
Bank Name
Account Name
Bank Branch Location
31. Enter the following Further Information:
BACS User Number
BACS Limit
33. Enter the following details for GL Cash Account:
Company - select 99 Vision Corporation.
Department - select 400 as your department.
Intercompany – 00 Default
34. Save your work.

Chapter 1 - Page 11
Practice - Defining Consolidation Sets

Overview
This practice reinforces your ability to create consolidation sets.
You should already have a consolidation set defined by the system. Review the consolidation
set.
Assumptions
• For this practice, log on to Vision as hrms/welcome and use the US Super HRMS
responsibility.
• Replace XX with your terminal number or initials.
Tasks
Navigate to the relevant window

Navigate to the Consolidation Sets window.
Define a Consolidation Set

Review existing consolidation sets, and create a new consolidation set.

Chapter 1 - Page 12
Solution: Defining Consolidation Sets
Define Consolidation Sets

1. Navigate to the Consolidation Sets window using US Super HRMS Manager responsibility:
(N) Payroll > Consolidation
2. Date Track to 01-JAN-20YY (YY= 2 years ago)
3. Perform Query Enter (F11)
4. Perform Query Run (Ctrl+F11)
Vision Corporation will be displayed.
5. In a new record, enter XX Semi Monthly Payrolls as the name of the Consolidation Set.
6. Save your work.
7. Close the form.

Chapter 1 - Page 13
Practice: Defining a Payroll

Overview
In this practice you will define a monthly and weekly payroll as of 01-JAN-2000.
Assumptions
Tasks

Navigate to the Payroll Description window.
Define a Monthly Payroll

Define a monthly payroll as of 01-JAN-2000 with the following attributes:
Name monthly_payroll_xx
Period Type Calendar Month
First Period End Date 31-JAN-2000
Number of Years 5
Date Offset Enter the following date offsets:
• Normal Payment: 0 (default)
• BACS Processing: -3
• Pay Advice: 0 (default)
• Cut Off: 0 (default)
Default Select the following:

• Payment Method: Cheque_xx
• Consolidation Set: Education
Monthly
Costing Enter the following:
• Company: 03 United Kingdom
• Cost Centre: 110 Vision Industries
• Account: 5800 Salaries
• Project: 220 Software Suite
• Activity: 000 (default)
Suspense Account Do not enter any details here, but note that
entry procedure is identical to the
procedure for completing the costing field.

Chapter 1 - Page 14
Arrears Payroll Check this box if you want your payroll

runs to allow an arrears payment.
Otherwise, leave this box unchecked.
Negative Payment Allowed Check this box if you want your payroll
runs to allow a negative payment as a valid
result. Otherwise, leave this box
unchecked.
Statutory Information Enter the following:
• Employers PAYE Reference:
518/O168 (14 chars max)
• Unique ID : Enter a number (12
chars max)
• ECON: 581/0162
• Maximum Holiday Paid Advance
0 (default)
• BACS Payment Rule: Previous
Banking Day
Define a Weekly Payroll

Define a weekly payroll as of 01-JAN-2000 with the following attributes:
Name weekly_payroll_xx
Period Type Week
First Period End Date 7-JAN-2000
Number of Years 5
Date Offset Enter the following date offsets:
• Normal Payment: 0 (default)
• BACS Processing: -3
• Pay Advice: 0 (default)
• Cut Off: 0 (default)
Default Select the following:
• Payment Method: cheque_xx
• Consolidation Set: Education
Weekly
Costing Enter the following:
• Company: 03 United Kingdom
• Cost Centre: 110 Vision Industries
• Account: 5800 Salaries
• Project: 220 Software Suite
• Activity: 000 (default)
Suspense Account Do not enter any details here, but note that
entry procedure is identical to the
procedure for completing the costing field.
Arrears Payroll Check this box if you want your payroll
runs to allow an arrears payment.
Otherwise, leave this box unchecked.

Chapter 1 - Page 15
Negative Payment Allowed Check this box if you want your payroll
runs to allow a negative payment as a valid
result. Otherwise, leave this box
unchecked.
Statutory Information Enter the following:
• Employers PAYE Reference:
518/O168 (14 chars max)
• Unique ID : Enter a number (12
chars max)
• ECON: 581/0162
• Maximum Holiday Paid Advance
0 (default)
• BACS Payment Rule: Previous
Banking Day

Chapter 1 - Page 16
Solution: Defining a Payroll

Setting Up Payroll

1. Navigate to the Payroll Description Window:
(N) Payroll > Description
2. Set your effective date for this exercise to 01-JAN-2000
Define a Monthly Payroll

3. Enter Monthly_Payroll_xx as your payroll name.
4. Select Calendar Month as the Period Type.
5. Enter a first period end date of 31-JAN-2000
6. Enter these date offsets:
Normal Payment – 0 (the default)
BACS Processing – enter –3
Pay Advice – 0 (the default)
Cut Off – 0 (the default)
7. Select Cheque xx as the default payment method for your payroll.
8. Select Education Monthly as the consolidation set.
9. Enter the following Costing information:
Company: 03 United Kingdom
Cost Centre: 110 Vision Industries
Account: 5800: Salaries
Project: 220 Software Suite
Activity: 00 (the default)
10. Do not enter any Suspense Account Information, but note that the procedure is identical
to the procedure for completing the costing information.

Chapter 1 - Page 17
11. Check the Negative Payment Allowed box if you want your payroll runs to recognize
negative payments as valid. Otherwise, leave this box unchecked.
12. Enter this Statutory Information:
Employers PAYE Reference: 518/O168 (14 chars max)
Unique ID : Enter a number (12 chars max)
ECON: 581/0162
Maximum Holiday Paid Advance: 0 (default)
13. BACS Payment Rule: Previous Banking Day
14. Save your work
15. Choose the Valid Payment Methods button and add Direct Deposit_xx. (Cheque_xx
should already exist as the default payment method).
16. Save your work.
Define a Weekly Payroll

17. Navigate to the Payroll Description window:
(N) Payroll > Description
18. Set your effective date for this exercise to 01-JAN-2000

19. Enter the following details:
20. Enter Weekly_Payroll_xx as your payroll name.
21. Select Week as the Period Type.
22. Enter a first period end date of 7-JAN-2000
23. Enter these date offsets:
Normal Payment – 0 (the default)
BACS Processing – enter –3
Pay Advice – 0 (the default)
Cut Off – 0 (the default)
24. Select Cheque xx as the default payment method for your payroll.

Chapter 1 - Page 18
25. Select Education Monthly as the consolidation set.

26. Enter the following Costing information:
Company: 03 United Kingdom
Cost Centre: 110 Vision Industries
Account: 5800: Salaries
Project: 220 Software Suite
Activity: 00 (the default)
27. Do not enter any Suspense Account Information, but note that the procedure is identical
to the procedure for completing the costing information.
28. Check the Negative Payment Allowed box if you want your payroll runs to recognize
negative payments as valid. Otherwise, leave this box unchecked.
29. Enter this Statutory Information:
Employers PAYE Reference: 518/O168 (14 chars max)
Unique ID : Enter a number (12 chars max)
ECON: 581/0162
Maximum Holiday Paid Advance: 0 (default)
BACS Payment Rule: Previous Banking Day
30. Save your work
31. Choose the Valid Payment Methods button and add Direct Deposit_xx. (Cheque_xx
should already exist as the default payment method).
32. Save your work.

Chapter 1 - Page 19

Chapter 1 - Page 20
Maintaining PAYE and NI (U.K. only)

Chapter 1 - Page 21
Practice: Entering NI Details for a Company Director

Overview
Enter NI details for a company director.
Assumptions
Tasks

Navigate to the Statutory Details window.
Enter NI details for a company director

Query a company director, Anthony David Ambrose xx and change his Process type to a
Director Process Type.

Chapter 1 - Page 22
Solution: Entering NI Details for a Company Director

1. Navigate to the Statutory Details window for Anthony David Ambrose xx:
(N) Fastpath > UK Tax > Statutory Details
Enter NI details for a company director
2. Choose NI Details (T).
3. Change your effective date, if required.
4. Select a Director process type for the employee. Oracle Payroll automatically performs
the correct NI calculation for whatever process type you select. Leavers’ choices are
only available when the employee is a leaver. There are thirteen choices altogether, but
only the following choices apply to company directors:
− Director
− Director Normal
− Director Pro-Rate
− Director Normal Pro Rate
− Pensioner Director
5. Save your work.

Chapter 1 - Page 23
Practice: Entering PAYE Details for an Employee

Overview
Enter PAYE details for an employee.
Assumptions
Tasks

Navigate to the Statutory Details window for Camilla Anderson xx.
Enter PAYE details for an employee

Amend the Tax code to 245L and the Tax basis to Cumulative.

Chapter 1 - Page 24
Solution: Entering PAYE Details for an Employee

1. Navigate to the Statutory Details window:
(N) People > Enter and Maintain > Assignment > Tax Information
Enter PAYE details for an employee
2. Query the employee Camilla Anderson xx in the Find window to open the Assignment
window.
3. Change your effective date if required.
4. Enter the employee’s new Tax code of 245L and amend the Tax basis to Cumulative.
5. Save your work.

Chapter 1 - Page 25
Practice: Entering NI Details for an Employee

Overview
Enter NI details for an employee.
Assumptions
Tasks

Navigate to the Statutory Details window.
Enter NI details for an employee

Query the employee Camilla Anderson xx and amend her NI category to G with a renewal date
of 12 months time for her certificate. Lastly, enter the Scheme Contracted Out Number (SCON)
S2345678B.

Chapter 1 - Page 26
Solution: Entering NI Details for an Employee

1. Navigate to the Statutory Details window:
(N) Fastpath > UK Tax > (T) NI Details
Enter NI details for an employee
2. Query the employee Camilla Anderson xx in the Find window to open the Statutory
Details window. You use the Statutory Details window to enter NI information.
3. Change your effective date, if required.
4. Amend the NI Category for Camilla Anderson xx to G.
5. In the certificate field, leave the default method of authentication for the employee’s
category.
6. Enter a renewal date for the certificate of 12 months time.
7. Oracle Payroll automatically validates the employee’s pension type as different rates of
National Insurance apply to different types.
8. Enter the employee’s Scheme Contracted Out Number S2345678B if the employee is a
member of a Contracted Out Money Purchase pension scheme (COMP). You can set up
the data for this field in the Lookup GB_SCON.

Chapter 1 - Page 27

Chapter 1 - Page 28

Chapter 1 - Page 29
Maintaining Other Deductions (U.K. Only)

Practice: Maintaining Student Loans

Overview
Enter student loan information for an employee.
Assumptions
• You must sign into the Oracle Application using hrms/welcome and use the Super
HRMS responsibility for your legislation.
• Seeded Vision Data.
• Use your initials if the practice requests an “xx”.
Tasks
Navigate to the Relevant Window

Navigate to the Element Entries window for an assignment.
Enter Student Loan Information

Add the Student Loan element to the elements entries and provide the necessary details.

Chapter 1 - Page 30
Solution: Maintaining Student Loans

1. Navigate to the Element Entries window:
(N) People > Enter & Maintain > Assignment > Entries > Element Entries
Enter Student Loan Information
2. Add in the Student Loan element and enter a cost code, if applicable.
3. Click on Entry Values.
4. Enter the Start Date in the format DD-MON-YYYY.
5. Enter the End Date in the format DD-MON-YYYY.
6. Save your work.

Chapter 1 - Page 31
Practice: Maintaining Tax Credits

Overview
Enter tax credit information for an employee.
Assumptions
• You must sign into the Oracle Application and use the Super HRMS responsibility for
your legislation.
• Seeded Vision Data.
• Use your initials if the practice requests an “xx”.
Tasks

Navigate to the Element Entries window.
Enter Tax Credit Information

Query an employee and enter their tax credit details.

Chapter 1 - Page 32
Solution: Maintaining Tax Credits

1. Navigate to the Element Entries window:
(N) People > Enter & Maintain > Assignment > Entries
Enter Tax Credit Information
2. Select the Working Tax Credit element.
3. Enter the start date in the format DD-MON-YYYY.
4. Enter the daily rate.
5. Save your work.

Chapter 1 - Page 33

Chapter 1 - Page 34
Costing Overview

Chapter 1 - Page 35
Processing Costs

Chapter 1 - Page 36
Guided Demonstration - Previewing Cost Allocations

Responsibility: local Super HRMS Manager
Log onto Vision using hrms/welcome.
1. Navigate to the People window.
(N) People > Enter and Maintain
2. Find the employee named Sabatino.
3. Click Assignment to go to the Assignment window.
4. Click Others and select View Cost Allocations. A window opens, displaying the cost
allocations for the selected employee.
5. To check the cost allocation values are a valid combination, select an element and click
Validate. A red cross appears against the element if the cost allocations are invalid.
Otherwise, a green tick displays.
6. Select the Details icon for an element to view the specific costing details. The details also
provide further information on any errors, if any cost allocation value is invalid.
7. For a graphical representation of cost allocation for the employee, select the Graphical
Analysis tab and select the Cost Allocation Key Flexfield segment you would like to view. A
pie chart shows the cost distribution of the selected employee’s elements across the
segment values. The bar across the top of the chart provides the key to the colored pie
segments.
8. Close the Cost Allocations preview window to return to the Assignment window.

Chapter 1 - Page 37
Practice - Allocating Costs

Overview
The objective of this practice is to investigate the allocation of assignment costs for a specific
employee, by looking at the cost entry levels you would use during system setup.
You will also override the existing cost allocation values for a specific employee assignment.
Assumptions
• For this practice, log in to Vision as hrms/welcome and use your local Super HRMS
responsibility.
• Your course instructor will allocate you an employee to research and update.
Tasks
Investigate Default Cost Allocations

You want to find out how the costing of a selected employee’s salary is affected by the cost
allocations at Payroll, Element, and Organization levels. The following employees are paid a
Regular Salary through the Vision HR Semi-Monthly payroll:
No. Employee Name Organization
604 Bullen, Mrs. Trisha US Sales Central
596 Finnegan, Mr. Jeremy US Sales Central
621 Johnson, Ms. Michelle US Sales Central
841 Jonathon, Mr. Gilbert US Sales Central
568 Kahn, Ms. Natalie US Sales Central
842 Menendez, Mr. Leticia US Sales Central
613 Peters, Mr. Stanley US Sales Central
614 Putin, Mr. Rosco US Sales Central
888 Shaffer, Ms. Heidi US Sales Central
844 Smithers, Ms. Kandi US Sales Central
597 Stojakovic, Ms. Petra US Sales Central
606 Tyson, Mr. Mark US Sales Central
601 Ashton, Mrs. Lisa US Sales East
575 Brady, Mrs. Jennifer Kathleen US Sales East
619 Bueller, Ms. Monica US Sales East
590 George, Mrs. Joan US Sales East
577 Gomez, David US Sales East
591 Hurrianko, Ms. Rhonda US Sales East

Chapter 1 - Page 38
618 Jackson, Mr. Travis US Sales East

594 Law, Mr. Paul US Sales East
Your course instructor will allocate you an employee to investigate.
Investigate the cost allocations of the Regular Salary element, the Vision Semimonthly payroll,
and your employee’s organization.
As a result of your investigations, answer the following questions:
 How are your employee’s costs distributed according to these cost settings?
 Why is there no distribution set associated with the Regular Salary element?
 Which costing levels can you use to override these settings?
Override Default Cost Allocations

Your employee’s role in the organization is undergoing temporary changes that require changes
to how you allocate their salary costs.
At the Assignment level, the cost of your employee’s salary is not currently allocated to a cost
center. From the current date, you want to split the costs of your employee’s salary across two
cost centers.
At Assignment level, add new cost allocations for your employee’s Regular Salary as follows:
 Allocate 80% to the Sales Central cost center (code 440) from today’s date to one month
from today.
 Allocate 20% to the US Organization cost center (code 210) from today’s date to one
month from today.
Note: Remember that distribution of costs across cost codes must add up to 100%.
You want to award your employee a bonus for the extra work they have been assigned. At
Element Entry level, add a Bonus element and allocate the cost of this element to the US
Organization cost center (code 210), and to the Illinois Labor Distribution (code 2106).
Which cost allocations is this Element Entry cost allocation overriding?

Chapter 1 - Page 39
Solution - Allocating Costs

Investigate Default Cost Allocations
Responsibility = local Super HRMS Manager

1. Navigate to the Payroll window using the local Super HRMS Manager responsibility:
 (N) Payroll > Description
2. In the Payroll window, enter query mode to search for Vision HR Semi-Monthly in the Name
field. Run the query.
3. Click in the Costing field to view the cost allocation segments for the Payroll entry level.

Chapter 1 - Page 40
4. Note the cost allocation values entered at this level.
5. Close all windows to return to the Navigator. Do not save any changes.
6. Navigate to the Organization window using the local Super HRMS Manager responsibility:
 (N) Work Structures > Organization > Description
7. Enter the name of your employee’s organization in the Name field of the Find Organization
window and choose Find to go to the Organization window.
8. Choose Others to view the Additional Organization Information.


Chapter 1 - Page 41
9. Select Costing Information.
10. In the Additional Information window click in the Costing field to view the cost allocation
segments for the Organization entry level.
13. Navigate to the Element Link window using the local Super HRMS Manager responsibility:
 (N) Total Compensation > Basic > Link

Chapter 1 - Page 42
14. In the Element Link window, enter query mode to search for Regular Salary in the Element
Name field. Run the query.
15. Note the value for Costable Type.


Chapter 1 - Page 43
16. Click in the Costing field to view the cost allocation segments for the Element Link level.
19. You should have learned the following in the course of your investigation:
 The Payroll level distributes Mr. Sabatino’s costs to:
o Company: Operations
o Labor Distribution: General and Administrative
o Product: No Product
 Neither the Element Link, nor the Organization levels override the Payroll level entries.
None of these higher levels allocate costs to the Cost Center or the GL Code.
 There is no distribution set associated with the Regular Salary element because the
Costable Type is Fixed. Only Distributed costs require a distribution set.
 You can use the Assignment and Element Entry levels to override these cost allocation
settings, but only for those segments that are enabled at those levels.
Override Default Cost Allocations
Responsibility = local Super HRMS Manager

20. To distribute the cost of your employee’s salary across two cost centers, navigate to the
Assignment window.
(N) People > Enter and Maintain
21. Find your employee.

Chapter 1 - Page 44
22. Navigate to the Costing window from the Assignment window.
(B) Assignment > Others > Costing
Note: Each line is datetracked and the total allocation of costs at any one time must be
100%.
23. Enter 80 in the Proportion field for the existing record; tab to exit the field.
24. The Cost Allocation Flexfield window appears. Enter 440 (Sales Central) in the Cost Center
field. Choose OK to return to the Costing window.
25. In a new record enter 20 in the Proportion field; tab to exit the field.
26. The Cost Allocation Flexfield window appears. Enter 210 (US Organization) in the Cost
Center field. Choose OK to return to the Costing window.

Chapter 1 - Page 45
27. Save your work. The Effect From dates automatically update to your effective date.
28. You have now distributed the cost of your employee’s salary across two cost centers. Close
the Costing window to return to the Assignment window.
29. To provide your employee with a bonus, choose the Entries button to go to the Element
Entries window.
30. Enter Bonus in the Element Name field of a new record.

31. Click in the Costing field. The Cost Allocation Flexfield window for the Element Entry
appears. Here you can allocate costs for the Cost Center segment and the Labor
Distribution segment.

Chapter 1 - Page 46
32. Enter a value of 210 (US Organization) in the Cost Center field.
33. Enter a value of 2106 (Illinois) in the Labor Distribution field.
34. Choose OK, to return to the element Entries window.
35. Enter Merit in the Reason field.
36. Leave the default dates in the Effect Dates fields.

Chapter 1 - Page 47
37. Save your work and close the window.

38. You have now awarded your employee a bonus and costed it.
39. The Payroll level costing allocates the Labor Distribution costs of employees on this payroll
to General and Administrative. You have overridden the cost allocation set at Payroll level,
to allocate the Labor Distribution costs of your employee’s bonus to Illinois.
40. No other entry levels allocate Cost Center costs, so in allocating the cost of your
employee’s bonus to the US Organization cost center, you have not overridden any existing
cost entries.

Chapter 1 - Page 48

Chapter 1 - Page 49
Payroll Configuration - Summary

Chapter 1 - Page 50

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THESE eKIT MATERIALS ARE FOR YOUR USE IN THIS CLASSROOM ONLY.

COPYING eKIT MATERIALS FROM THIS COMPUTER IS STRICTLY PROHIBITED

Copyright © 2007, 2009 Oracle. All rights reserved.

Restricted Rights Notice

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Technical Contributors and Reviewers

This book was published using: Oracle Tutor

R12.x Payroll Fundamentals: Configuration Practices and Solutions........................................................1-1

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R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

• Working experience with earnings and deductions elements in Oracle HRMS

• D48180GC10 R12 HRMS Total View

• D60573GC10 R12 Compensation Management Fundamentals: Earnings and

• D47341GC10 R12 Compensation Workbench and Salary Configuration

• D17308GC10 11i Compensation Management Fundamentals: Earnings and Deductions

How This Course Is Organized

Copyright © Oracle 2009. All rights reserved.

R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

• System release bulletins

• Installation and user’s guides

• International Oracle User’s Group (IOUG) articles

Copyright © Oracle 2009. All rights reserved.

R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

Copyright © Oracle 2009. All rights reserved.

R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

Typographic Conventions in Code

Lowercase Syntax variables CREATE ROLE role

Typographic Conventions in Oracle Application Navigation Paths

This simplified path translates to the following:

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

(ST) = Sub Tab

Copyright © Oracle 2009. All rights reserved.

R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

Typographical Conventions in Oracle Application Help System Paths

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

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R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

R12.x Oracle Payroll Fundamentals: Configuration (Global) Table of Contents

Copyright © Oracle 2009. All rights reserved.

R12.x Payroll Fundamentals: Configuration Practices and Solutions

R12.x Payroll Fundamentals: Configuration Practices and Solutions

R12.x Payroll Fundamentals: Configuration Practices and Solutions

Copyright © Oracle 2009. All rights reserved.

R12.x Payroll Fundamentals: Configuration Practices and Solutions

Payroll Configuration - Introduction

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R12.x Payroll Fundamentals: Configuration Practices and Solutions

Payroll Configuration Fundamentals

Copyright © Oracle 2009. All rights reserved.

R12.x Payroll Fundamentals: Configuration Practices and Solutions

Defining Payrolls for Your Organization

R12.x Payroll Fundamentals: Configuration Practices and Solutions

Practice: Defining Payment Methods

Define a Cheque Payment Method

Define a Direct Deposit Payment Method

Define a Third Party Payment Method

Copyright © Oracle 2009. All rights reserved.

R12.x Payroll Fundamentals: Configuration Practices and Solutions

Solution: Defining Payment Methods