Compensation Tab

Compensation Tab within the Employee Master

Fields on the Compensation Tab

Payroll Information

The Pay Amount and Pay Period Hours may be defined to four decimal places after the decimal, such as 10.1234. When only two decimal places display for the Pay Amount, Pay Period Hours, Hourly Rate, and Annual Salary, the subsequent decimal places are zeroes. For instance, when the pay amount is defined as 10.1200, 10.12 displays in the Pay Amount field after the record is saved.

Payroll Mode. The Payroll Mode determines taxation and how the individual's pay calculates. Available selections are set up during implementation.
Pay Amount. The Pay Amount needs to be based on the Payroll Mode. After saving, confirm the amount in the Annual Salary field. An annual payroll mode should have an annual pay amount, and a per pay period or hourly amount needs a corresponding pay amount for correct hourly rate calculation and annual salary calculation.

Note: The dollar amount in the pay amount field needs to correspond with the selected payroll mode. The payroll mode and the pay amount determine the Annual Salary, Hourly Rate, the Payroll Salary, and the Annual Salary.

Salary Effective. The Salary Effective date is the date that the salary starts. For a new hire, it often is the first day of work.
Salary Review. The Salary Review date is for the individual's next salary review. This date enables reporting by salary review dates and can be updated on the master or by adding an Employee Salary Review Detail.
Pay Period Hours. Pay Period Hours should reflect the standard number of hours paid in a regular pay period.
Employment Type. Employment Type classifies an individual as full-time, part-time, regular, contractor, or another designation according to business rules and government regulations.
Annual Salary. Estimated annual salary based on the payroll mode, pay amount, and number of hours per pay period. This value is not directly editable.

Pay Group. The individual's assigned pay group. The Pay Group is for payroll processing and is associated with each Payroll Calendar. Pay Groups filter employees by company and pay frequency when processing a Payroll Calendar for payment.
W-2 Type. The W-2 Employee Type designates the type of form that an employer must produce to meet the Federal regulatory reporting requirements at year-end. On the W-2 Employee Type table, annual reporting information is streamlined into two options: the Employee W2 Filing Form or the Employee 1099-MISC Filing Form. These selections assign annual reporting information to each W2 Employee Type.

WARNING: It is very important to note that if you select the Employee 1099-MISC Filing Form option for an individual, the system will not generate tax records for that individual.

In addition, to withhold a tax for an employee with a W-2 type of Employee W2 Filing Form, a record for the tax code must be entered on the Employee Tax Detail screen.

Salary Grade. An assignment of the salary grade to identify the pay scale and calculate the individual's compa-ratio. Per position salary-grades can be defined on Employee Position Detail records.
Salary Grade Step (view only). The Salary Grade Step is calculated by comparing the employee's pay amount to any step amounts defined for the Salary Grade. A Salary Grade Step of 99 displays if the employee has no salary grade, the grade has no steps, or if the employee's compensation does not correlate to a step within the assigned salary grade.

In the online product, to see the new Salary Grade Step calculation after a change to salary grade or pay amount, save then click on the screen's Refresh icon.

Standard Overtime? To indicate that the employee should receive standard overtime without using the FLSA overtime calculation during detailed pay entry.
FLSA Overtime? To indicate that the employee should receive FLSA overtime that calculates according to the FLSA overtime calculation during detailed pay entry.
Payroll Salary. Estimated gross pay per pay period based on the pay amount and payroll mode. This value is not directly editable.

Hourly Rate. Estimated hourly pay per hour based on the pay amount and payroll mode. This value is not directly editable.
Adjusted Rate. Estimated rate of pay based on the shift differential for a defined for the employee's default shift.
Compa Ratio. An individual's compensation ratio is calculated based on the employee's pay and salary ranges, or grade, defined for the organization on the Salary Grade Codes Table. Where an individual's salary falls within the range of a level or grade determines the placement of the individual's pay within the grade.

Compa-Ratio = Employee’s Pay / Midpoint Pay for Assigned Salary Grade Code

An organization's compensation policies may define how much of the range remains available for the employee to receive a raise before reaching a set point in the salary grade that requires that the employee graduate to another salary grade.

Case in point: If Beth is assigned to a Salary Grade Code with a Minimum Pay of $50,000.00 and a Maximum Pay of $65,000, the Midpoint Pay of the salary grade would be $57,500.00.

Beth is currently salaried at $59,000.00, so this calculation would define her compa-ratio:

Beth’s Compa Ratio = $59,000.00/$57,500.00

Within her assigned salary grade, Beth’s Compa Ratio is 1.029.

FIT Information (Federal Tax Information)

Most of the tax information was completed during the new hire process; however, if the individual is exempt from state or federal income taxes, select the appropriate Exempt indicator box. The FIT Information section provides Federal Income Tax withholding information used for an employee during payroll processing.

Exempt? If the individual is exempt from Federal income tax, select the Exempt checkbox in the FIT information section. When a the FIT exempt checkbox is marked, FIT taxable wages will accumulate, but the Federal income tax will not process. (The Exempt flag is not included in the New Hire Process wizard.)
Additional Tax. If the individual requests an additional amount of federal income tax withholding (FIT), record the additional amount in the federal Additional Tax field on the Compensation tab of the Employee Master. Recording this additional amount here and saving updates the Additional Amount on the Employee Tax Detail for the employee's FIT record.

Note: Define any additional percentages or additional amounts for other taxes, including state income taxes for states other than the Resident Tax State, on the applicable Employee Tax Detail record or records.

Exemptions. The number of Exemptions for Federal income tax withholding. This value populates from the New Hire Process Wizard and can be modified in this section.
Resident Tax State. The state of residence for tax purposes.

If the Work Tax State and the Resident Tax State differ, then the payroll process can automatically create dual taxation.

Tax State Selection Lists: Tax state selection lists for employee resident state, work state, and time entry state codes filter by active state tax records in the system. With this control, a user cannot inadvertently assign a tax state to an employee where tax records defined for the state are inactive.

Filing Status (required). The filing status in the FIT section filters to only Federal tax filing statuses. The individual's tax filing status for Federal is found on the individual's completed Form W-4.

The Compensation Tab and the Employee Tax Detail for Federal Income Tax

Saving changes to the following fields in the Compensation tab's FIT Information section updates the Federal income tax withholding record for the employee: Additional Tax (to the Additional Tax Amount), Filing Status, Exempt checkbox, and Exemptions.

SIT Information (State Tax Information)

Work Tax State. The work state tax is the default Work Tax State for earnings entered through pay entry. In the case of employees who are working in more than one state that collects state income tax, enter the primary state in the Work Tax State field on the Compensation tab. The employee will be taxed in the Work State.

Filing Status (required). The filing status in the SIT section filters to only tax filing statuses defined for the selected Work Tax State. To update the selection list for a state, re-select the work tax state, and return to the Filing Status field.

For states with income tax, the state filing status is found on the employee's completed state withholding certificate.

For states without income tax, select the corresponding Federal tax filing status.

Note: If a valid filing status for the state is not assigned, withholding calculates at the highest rate, which is typically the Single rate.

Exempt? If the individual is exempt from state income tax withholding, select the Exempt checkbox in the SIT information section. When the SIT exempt checkbox is marked, SIT taxable wages accumulate for the state, but the SIT for the state does not process.
Additional Tax. If the individual requests an additional amount of income tax withholding for the selected Resident Tax State, record the additional amount in the SIT section of the Employee Master. Recording this additional amount here and saving updates the Additional Amount on the Employee Tax Detail for the employee's SIT record for the selected Resident Tax State.
Exemptions. The number of Exemptions for state income tax withholding for the selected Work Tax State. This value populates from the New Hire Process Wizard and can be modified in this section. Also see the Employee Tax Detail for state income tax withholding.

The Compensation Tab and Employee Tax Details for State Income Tax

Saving changes to the following fields in the Compensation tab's SIT Information section updates any existing state income tax withholding record for the employee and the selected Work Tax State: Additional Tax (to the Additional Tax Amount), Filing Status, Exempt checkbox, and Exemptions.

Additional amounts or additional percentages can be recorded for other taxes, including state income taxes for states other than the Resident State Tax, on the applicable Employee Tax Detail record. Only define the Additional Tax amount for the Resident Tax State in the Additional Amount field on the Compensation tab.

Work Tax Locality. The Work Tax Locality should be selected where the employee works in a tax jurisdiction that has local work taxes. The work tax locality selections are filtered based on the selected Work Tax State.