Oracle Fusion HRMS for UAE-Payroll Setup White Paper-Rel8 Final

Oracle Fusion HRMS (UAE): Payroll Implementation and Functional Considerations

An Oracle White Paper

July 2014

Oracle Fusion HRMS (United Arab Emirates): Payroll Implementation and Functional Considerations


Disclaimer

The following is intended to outline our general product direction. It is intended for information purposes only,

and may not be incorporated into any contract. It is not a commitment to deliver any material, code,

or functionality, and should not be relied upon in making purchasing decisions. The development, release,

and timing of any features or functionality described for Oracles products remains at the sole discretion

of Oracle.


Introduction ................................................................................................................................. 1

Whats in this Document.......................................................................................................... 1

Other Information Sources ...................................................................................................... 1

Document Updates ................................................................................................................. 2

Comments and Suggestions ................................................................................................... 2

Payroll Data ................................................................................................................................ 3

Person and Employment Payroll Data ..................................................................................... 3

Calculation Cards .................................................................................................................... 5

Statutory Deductions and Gratuity Calculation .......................................................................... 16

Social Insurance Calculation ................................................................................................. 16

Gratuity Calculation ............................................................................................................... 18

Elements ................................................................................................................................... 22

Element Classifications ......................................................................................................... 22

Element Templates ............................................................................................................... 26

Elements: Allowances, Unpaid Leave and Loans .................................................................. 29

Gratuity Payment Element .................................................................................................... 42

Salary Basis and Additional Allowance Elements .................................................................. 43

Auto Indirect Elements and Creation of Element Eligibility .................................................... 45

Proration and Retroactivity .................................................................................................... 46

Balances ................................................................................................................................... 48

Balances Definitions predefined for UAE ............................................................................... 49

Balances and SOE ................................................................................................................ 53

Payroll Set up ........................................................................................................................... 56

Payments Setup .................................................................................................................... 56

Consolidation Groups and Payroll Definitions ........................................................................ 60

Payroll Definitions ................................................................................................................. 61

Salary Basis and Compensation ........................................................................................... 64

Hiring an Employee and Running Payroll for UAE: Worked Example ........................................ 67

Hire an employee .................................................................................................................. 67

Assign additional information ................................................................................................ 70

Run Payroll and Review Results ........................................................................................... 76

Government Sector Employees............................................................................................. 79

Mandatory Post-Payroll Processes ........................................................................................... 81

Calculate Prepayments ......................................................................................................... 81

Archive Periodic Payroll Results............................................................................................ 82

Payments Processing and Payslip ............................................................................................ 85

Payments Processing ........................................................................................................... 85

Payslip .................................................................................................................................. 90

Monthly Reports ........................................................................................................................ 95

Form 1 .................................................................................................................................. 95


Form 6 .................................................................................................................................. 98

Form 7 ................................................................................................................................ 100

Monthly Contributions Private Sector ............................................................................... 102

Monthly Contributions Government Sector ....................................................................... 105

Wage Protection System: Salary Information File ............................................................... 107

Global Reports ........................................................................................................................ 110

Statutory Deductions Register ............................................................................................. 110

Payroll Register Report ....................................................................................................... 113

Payment Register Report .................................................................................................... 116

Gross-to-Net Summary Report ............................................................................................ 119

Termination ............................................................................................................................. 123

Worked Example Terminating an Employee ..................................................................... 123

Form 2 ................................................................................................................................ 126

Conclusion .............................................................................................................................. 130

Glossary.................................................................................................................................. 130

General Terminology ........................................................................................................... 130


1

Introduction

This paper identifies and describes payroll setup tasks for Oracle Fusion Human Resources Management System

(HRMS) for the United Arab Emirates (UAE).

Whats in this Document

This document is intended to support the implementation team in understanding:

UAE-specific payroll data that needs to be provided.

UAE statutory deductions calculations and set up needed at implementation level.

UAE predefined element templates and set up that needs to be done when creating customer specific elements.

UAE-specific predefined balances and how these can be fed by customer specific elements.

UAE-specific considerations for proration, retroactivity and terminations.

The base set up that needs to be done to execute a UAE payroll and prepare payment file and payslip.

The post-payroll processes that can be executed for UAE.

UAE predefined setup for SOE online results viewing and impact on customer created balances.

The migration process from a legacy system, by identifying UAE-specific fields that need to be populated by

such migration.

Note: Flexfields described in this document are Developer Descriptive Flexfields (DDF) that must not be

customized at an implementation level. Customer Descriptive Flexfields (DFF) are the fields delivered by the

product that are meant to be used for customization during implementation.

This documentation may also be beneficial to end users who run application processes after implementation.

Note: This document should not be considered a comprehensive guide for payroll implementations. The focus of

this document is UAE-specific processes and information. For information about generic tasks, the

implementation team should refer to documentation listed in the following section.

Note: Before running payroll for UAE, Human Resources needs to be implemented for the country itself. For this

task refer to the HR Implementation and Functional Considerations guide for UAE, listed in the following section.

Other Information Sources

Oracle Fusion Workforce Deployment Implementation Guide: http://docs.oracle.com/cd/E28271_01/fusionapps.1111/e20379/toc.htm

Oracle Fusion HRMS (UAE): HR Implementation and Functional Considerations Guide:

https://support.oracle.com/oip/faces/secure/km/DocumentDisplay.jspx?id=1565436.1

Oracle Fusion Global Payroll User Guide:

http://www.oracle.com/technetwork/fusion-apps/payrolluserguider4-1873385.pdf


2

Document Updates

This document is based on the most current application release as of the documents publication date. Content is

updated as needed only to reflect major changes to existing features or when significant new features are added to

the UAE localization. For this reason, it is possible that some minor UI differences may exist between the version

being implemented and the version described in this document.

Comments and Suggestions

Your comments are important to us. We encourage feedback about Oracle Fusion Applications Help and guides.

Please send your suggestions to: [email protected].

You may also use the Send Feedback to Oracle link in the footer of Oracle Fusion Applications Help.

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Payroll Data

Person and Employment Payroll Data

For a person to be processed in payroll a payroll relationship must be defined for the same. This section describes

specific requirements for UAE in terms of payroll relationships including the UAE-specific information needed for

payroll that must be captured in the employment and payroll relationship data

Payroll Relationships, Terms and Assignments

Payroll Relationship represents the relationship of the person with the Payroll Statutory Unit (PSU). This varies

from country to country, but essentially no balance aggregation is performed above this level for a person.

Each country defines the person types for which a payroll relationship is created. In general, to be processed in

payroll, a person must have a person type of Employee, Contingent Worker or Beneficiary.

In UAE, the payroll relationship type Standard is used for person type Employee.

You can also create a payroll relationship for other person types such as contingent worker and nonworker.

If the nonworker type is NonWorker Paid, the payroll relationship is Standard.

If the nonworker type is NonWorker, the payroll relationship must be of type Element Entries Only.

If the nonworker type NonWorker Unpaid, no payroll relationship is created.

For contingent workers the payroll relationship is of type Element Entries Only.

For UAE, a single payroll relationship is created per relationship type. In case of rehire, the employee is treated as a

new employee and so there is only one payroll relationship per person. For UAE, the payroll relationship rule

Continuous Period of Service (C) is predefined.

Note: Payroll relationship rule Continuous Period of Service (C) implies that when the HR user creates a new

Work Term, a check is made for a Payroll Relationship of the same type and PSU. If one exists, the LSED of the

payroll relationship will be validated. If it is greater than the Term start date, the Work Term will be attached to it.

If it is less than the Term start date, a new Payroll Relationship will be generated. If one does not exist, a new

Payroll Relationship will be generated. When a Work Term is terminated, if it is the last active Work Term

associated with the Payroll Relationship, the Payroll Relationship will also be terminated.

Note: You can find the predefined data for legislation rules in the Oracle_Fusion_HRMS_UAE_Payroll_Data.xls

on My Oracle Support (MOS).

UAE has a requirement to handle multiple assignments within a legal employer. A person may have multiple

assignments within different terms. Possible valid combinations are:

1 Payroll Relationship 1 Term 1 Assignment

1 Payroll Relationship 1 Term n Assignments

1 Payroll Relationship n Terms n Assignments

Social insurance deduction is calculated at payroll relationship level. Earnings related to social insurance are

considered at all the three levels, that is, Relationship, Terms, and Assignments.

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UAE-specific data must be captured at a payroll relationship level and the calculation of some country specific

allowances is derived from this. To capture this information, two flexfields are enabled for the UAE at the payroll

relationship level:

If data is migrated from a legacy system, this UAE-specific field must be populated. The following table shows the

attributes of this flexfields for record PAY_PAY_RELATIONSHIPS_DDF

(DESCRIPTIVE_FLEX_CONTEXT_CODE = AE):

TABLE 1. PAYROLL RELATIONSHIP DATA FLEXFIELDS UAE

APPLICATION_COLUMN_NAME END_USER_COLUMN_NAME LOOKUP DESCRIPTION

REL_INFORMATION1 ACCOMMODATION_PROVIDED HRC_YES_NO Accommodation Provided

REL_INFORMATION2 TRANSPORTATION_PROVIDED HRC_YES_NO Transportation Provided

Contract Data

Contract data must be captured for every payroll relationship, which also affects gratuity processing. For this

reason, it is strongly recommended that UAE payroll customers use the 3-tier employment model. If there is no

requirement to have multiple terms and multiple assignments, the 2 tier single contract single assignment

employment model can also be used.

The UAE has the following 2 contract types:

Fixed Contract

Unlimited Contract

The flexfield Employment Status is enabled to capture UAE specific contract details.

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If data is migrated from a legacy system, this UAE-specific field must be populated. The following table shows the

attributes of this flexfields for record PER_CONTRACT_LEG_DDF

(DESCRIPTIVE_FLEX_CONTEXT_CODE = AE):

TABLE 2. CONTRACT DATA INFORMATION FLEXFIELDS UAE

APPLICATION_COLUMN_NAME END_USER_COLUMN_NAME LOOKUP DESCRIPTION

CTR_INFORMATION1 EMPLOYMENT_STATUS HRX_AE_EMPLOYMENT_STATUS Employment Status

Calculation Cards

Calculation cards functionality is used to capture data needed for payroll processing that cannot be captured in

global fields. These cards are used to capture data at the organization level as well as the person level.

The UAE localization provides two predefined cards at the payroll statutory level (PSU). These are:

Employer Social Insurance Details

Employer Gratuity Details

At the person level, there are two predefined cards:

Employee Social Insurance Details card

End of Service Details card

The flexfield structure used to store information entered in the calculation cards is described in

Oracle_Fusion_HRMS_UAE_Payroll_Data.xls on My Oracle Support (MOS).

Employer Social Insurance Calculation Card

The employer social insurance details card uses the following information for social insurance calculation at the

legal entity level:

Employer Sector: The employer sector can be either government sector or private sector. The deduction

rules are applied based on the type of sector you choose.

Contributory Salary Reference Formula: You can define the formula that calculates the contributory

salary at the legal entity level. The contributory salary value is derived from this formula and is used as the

reference value for social insurance calculation. This formula must have the value returned using variable

CONTRIBUTORY_SALARY_REFERENCE. For additional details on the calculation, refer to the

section on social insurance calculation.

To enter or modify this information:

1. Sign in to the Oracle Fusion application using a role that has the profile of a superuser and privileges to create all organizational structures:

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2. Select Setup and Maintenance from the Navigator:

3. Navigate to task Define Legal Entities for Human Capital Management:

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4. Select the legal entity through Selected Scope, for which data needs to be added and select task Manage Legal Entity Calculation Cards:

5. Select the Employer Social Insurance Details Card from the given list. If no card exists, click Create. Select

the Employer Social Insurance Details and click Continue. The Manage Calculation Cards page appears:

6. Enter required details in the Payroll Statutory Unit Social Insurance Details:

Employer Gratuity Details Card

The gratuity card contains the payroll statutory unit (PSU) gratuity details and uses the following information for

gratuity calculation at the legal entity level:

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Calculation Basis: The amount of gratuity is based on the salary per day of the employee which will

differ based on whether you choose fixed or actual calculation basis. For gratuity calculation, the monthly

salary is converted to annual salary. This amount is divided by the number of days in a year. The actual

calculation basis uses 365 days in a year whereas the fixed calculation basis uses 360 days.

Salary Formula: You must define your own salary formula for gratuity calculation. Once you have

defined the salary formula, you can select it here. The formula must return the values using variable

MONTHLY_SALARY. Additional details on the calculation are provided in the section on gratuity

calculation.

Reference Formula: You can define your own reference formula to calculate the paid gratuity amount

and select it here. The formula must return the values using variable PAID_GRATUITY. This overrides

the amount calculated by the default reference formula in the End of Service Details card in the gratuity

details calculation component.

To enter or modify this information:

1. Follow steps 1-5 used for employer social insurance details card.

2. Select the Employer Gratuity Details:

3. Enter required details in the Payroll Statutory Unit Gratuity Details:

Person Social Insurance Calculation Card

The calculation component on the employee social insurance card corresponds to the social insurance contribution

payroll deduction element, defined at the legislative level. The employee social insurance component details section

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captures additional information used to calculate the deduction. When the employee social insurance calculation

card is created, the social insurance calculation component and the social insurance calculation components details

record are automatically created. You can create additional calculation component details such as Social Insurance

Contributory Salary Override and Social Insurance Contributory Salary Adjustment Amount.

The social insurance card is automatically created when the new hire process for an employee is completed,

provided the employee citizenship information is specified. If the citizenship information is not specified, then the

social insurance card must be created manually for this employee.

For the automatic card creation to be enabled, your Payroll Product Usage must be set to Oracle Fusion Payroll or

Payroll Interface.

To enter this information:

1. Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager:

2. Select Payroll Calculations task from the Navigator:

3. Navigate to Manage Calculation Cards task and select the person for whom you want to review the calculation card:

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4. Select the Employee Social Insurance Details Card from the given list. The Manage Calculation Cards page

appears:

Note: If no card exists, select Create and create the calculation card manually. 5. Enter details or edit the Employee Social Insurance Details:

Note: For the UAE localization, you must associate the social insurance card to a person for running the payroll.

Consider the following points when entering the data:

Citizenship: Social insurance deductions are processed only for the UAE citizens. You must specify the

citizenship of the employee as the social insurance card will be processed based on this information.

Method of Obtaining Nationality: This information is used for reporting purposes. The method of

acquiring nationality could be by birth, residence, marriage or any other factor.

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Date of Acquiring Nationality: The date of acquiring nationality cannot be earlier than the person's date

of birth.

Exception Type: Social insurance deductions are processed based on the exception type:

Employee pays both employer and employee contributions

Employer pays both employee and employer contributions

Employer pays contribution monthly and employee pays later

Depending on the selected exception type, the employee or the employer pays the contributions. If no

value is specified, then the employer and the employee each pay their contributions.

Registered for Social Insurance - This checkbox indicates whether to process social insurance

calculations for employees. For employees who are Emirati citizens and have their Social Insurance

Numbers specified during the new hire process, this checkbox is selected automatically indicating that

social insurance calculations must be processed. For employees who are non-Emirati citizens, this

checkbox remains unselected indicating that social insurance calculations will not be processed.

Employees registered for social insurance are not eligible for gratuity.

Paid from another Government Sector - Select this checkbox to specify if the employee receives

additional pay from another government sector organization. You can select the checkbox by editing the

automatically created card.

Sector or Department Name: This is a free text field. This does not affect the social insurance

calculation, but used for reporting purposes.

6. Enter Override or Adjustment amounts:

To enter the employee social insurance contributory salary override or adjustment amounts, you must manually

create the calculation component details. Click Create to create the calculation component details and enter the

required information:

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Social Insurance Contributory Salary Override: You can additionally create the calculation component details for Social Insurance Contributory Salary Override, if applicable. You use the override amount to specify a social insurance contribution amount that is different from the social insurance balance, or the amount derived from the reference formula at the legislative level. This is applicable only for the private sector employees and is processed just in the first month of joining or in the month of January every year. This amount, if specified, is applicable for the whole year.

Social Insurance Contributory Salary Adjustment: You can additionally create the calculation component details for Social Insurance Contributory Salary Adjustment Amount, if applicable. You use the adjustment amount to make any changes to the social insurance contributory salary amount. This is only applicable for private sector employees and can be specified any time during the year.

7. Click the Associations tab to ensure that the calculation card is associated with the appropriate TRU and Employment Terms:

Note: The calculation card is associated automatically to the appropriate TRU and Employment Terms.

End of Service Details Calculation Card

The component in the End of Service Details card corresponds to the payroll element gratuity contribution,

defined at the legislative level. This card captures additional information related to gratuity and end of service

details.

The End of Service Details card has two main components:

Gratuity details

End of Service details

Gratuity Details

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When you create the End of Service Details card, the gratuity details component and components details record is

created automatically. The gratuity details component is used to enter data that impacts the calculation of gratuity

payment.

On termination, you can enter an override amount to be paid to the employee as gratuity. This amount overrides

the gratuity amount calculated using the reference formula defined at the payroll statutory unit level and the

legislative level formula calculation.

For example, if the primary term is a fixed contract type and the subsequent terms are unlimited, then the amount

of gratuity calculated is based on fixed contract type instead of reduced amount for the unlimited contract. In this

case, you can enter an override amount at the payroll relationship level.

Gratuity card is created automatically upon employee termination, provided the Registered for Social Insurance

checkbox is unselected for the employee. When the gratuity card is created, the gratuity component, component

details, and the association are automatically created.

The automatic card creation is enabled only if the Payroll Product Usage is set to Oracle Fusion Payroll or Payroll

Interface.

End of Service Details

You use the End of Service Details card to specify whether the employee wants to claim the end of service

remuneration or pension from the social insurance office. In this card, you can also specify the bank information

where the payment has to be made.

The end of service details component is used mainly for reporting purposes in the Form 2 and submitted to the

social insurance office.

To enter this information:

1. Follow steps 1-4 used for employee social insurance details card.

2. Enter or edit the required information:

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3. Click Create to create the calculation component details and enter the required information in the Override Amount field:

Note: To enter the gratuity details override amount, you must manually create the calculation component details.


Override Amount: You can enter an override amount to be paid to the employee as gratuity. If

override amount is specified, this amount overrides the reference formula for gratuity calculation

defined at the PSU level, and also the calculation formula defined at legislative level.

4. To create End of Service Details calculation component details, click Create and select End of Service Details:


End of Service Remuneration or Pension: used to specify whether the employee wants to claim

the end of service remuneration or pension from the social insurance office.

Bank Name, Branch, Account Number: bank information where the payment must be made.

5. Click the Associations tab to ensure that the calculation card is associated with the appropriate TRU and Employment Terms:

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Note: The calculation card is associated automatically to the appropriate TRU and Employment Terms.

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Statutory Deductions and Gratuity Calculation

The data entered at the TRU level and at the person level are the starting point for calculating statutory deductions

and gratuity payment, if applicable.

Based on legislative requirements UAE localization has predefined a setup with the parameters to be used in the

calculation. These parameters are stored in the legislative repository for calculation information.

Social Insurance Calculation

Social insurance is applicable to all Emiratis who work in the UAE and are paid there. This contribution is

normally paid both by the employer and the employee, but there are some exceptions to this behavior that can be

defined at the person social insurance calculation card level.

Contributions are calculated as percentages of a contributory salary. The contributory salary components are

elements like basic compensation, accommodation and transport allowances. The legislation determines which

elements are liable to social insurance contributions, whereas the amounts and definitions of the same depend on

the employers regulations.

For private sector employees:

The amount of the contributory salary can be overridden at the person level.

If this amount is not entered at the individual level, you can define a formula used to calculate the

contributory salary at the legal employer level.

Finally, if neither individual override, nor legal employer formula, are defined, the contributory salary uses

the value of earnings elements that are subjected to social insurance. These elements are identified

through secondary classification and feed the balance Subject to Social Insurance. Further detail on

how UAE has defined element classifications and balances can be found in the related sections.

The contributory salary has a monthly minimum value and a monthly ceiling. This means that if the

monthly social insurance income is lower than the minimum value, contributions are calculated on the

minimum value. If the monthly social security income exceeds the monthly ceiling, contributions are due

just on the part up to the ceiling. For the UAE, a minimum monthly contributory salary of 1000 AED

and monthly ceiling of 50000 AED are predefined.

For Private Sector, the employee contribution is 5% and employer contribution is 12.5%. But if the

exception type is Employee pays both contributions, then system adds a private sector subsidy in

Employer contribution (12.5% + 2.5% =15%).

For the government sector:

The contributory salary uses the value of earnings elements that are subjected to social insurance. These

elements are identified through secondary classification and feed the balance Subject to Social

Insurance.

There is no floor or ceiling limit to the contribution salary.

If the employees payroll relationship is terminated in the month, no contribution is deducted. If termination date

is end of the month the full contribution is deducted.

Social Insurance Deductions

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Social insurance contribution is calculated through the deduction Social Insurance that is part of the component

group Social Insurance. Calculations are done through element Social Insurance.

To view details on component groups, calculations and elements:

1. Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager.

2. Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work-area

3. Select SI Deduction and view the details

Legislative Repository for Calculation Information

Parameters used in the calculation of social insurance are stored in the legislative repository for calculation

information. These parameters are predefined by the UAE localization and cannot be modified in the

implementation phase.

To view predefined parameters:

1. Log in with a Payroll Manager role.

2. Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work area.

3. Select SI Deduction.

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4. Open the Calculation Factors for the related element:

5. By clicking on Range Values details of the calculation factors are displayed:

Gratuity Calculation

Persons working in UAE are entitled to an additional payment upon termination which is called Gratuity. The

entitlement to this payment is accrued during the work relationship.

Gratuity calculations are triggered only for persons who are not eligible or not registered for social insurance. The

gratuity amount to be paid is driven by UAE labor laws. If you are not following the UAE labor laws, you can

define your own formula for gratuity processing. The following two options are available: must

You can define your own formula and create a setup according to the values to be returned to you

formula run results. In such a scenario, you may not need to use the localization solution for gratuity

processing.

You can define your own reference formula gratuity processing, which substitutes the gratuity formula

defined at the legislative level. If a user-defined formula exists, then the seeded formula executes it.

The localization solution for gratuity processing uses the following rules:

The duration of service and the contract type (fixed or unlimited) determines the number of days of

gratuity payment to which the payee is entitled per year of service. These days are retrieved from the

legislative repository for calculation information. Note that the duration of service can be reduced by

unpaid or unauthorized absences. This is obtained by creating elements for Unpaid Leave classification

and attaching this element to the absence type. If an absence with this newly created absence type is

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recorded, the Unpaid Leave elements days input value will feed the Leave Without Pay balance. In the

Gratuity formula, the Leave Without pay balance is used to get the unpaid absences.

The base salary for gratuity payment is calculated through the salary formula selected at the legal employer

level.

If the person is terminated, contract type and termination initiator is checked and amount is paid:

o If termination initiator is employer, then the complete gratuity accrued is paid to the employee.

o If termination initiator is the employee, the application fetches the payment factor using the

contract type and period of service. Payment factor is available in the legislative repository for

calculation information.

Gratuity Entitlement and Payment

Fixed Contracts

Gratuity Entitlement: An employee is entitled to 21 days salary for the first 5 years and 30 days salary for each

additional year.

Gratuity Payment: If employer terminates the employee, the employee is paid the complete gratuity that has

accrued.

If employee has resigned before the contract period, and has completed less than five years in service, the

employee is not paid gratuity. But if the employee has completed more than 5 years, then they are paid the

complete gratuity amount upon termination.

If the contract has expired and the employee has completed more than one year in service, complete gratuity

amount is paid upon termination. .

Unlimited Contracts

Gratuity Entitlement: An employee is entitled to 21 days salary for the first 5 years and 30 days salary for each

additional year.

Gratuity Payment: If employer terminates the employee, the employee is paid the complete gratuity that has

accrued.

If employee has resigned before completing one year, then no gratuity is paid. If the employee has completed

between 1 to 3 years, one-third gratuity is paid. If the employee has completed between 3 to 5 years, two-thirds

gratuity is paid. If the employee has completed more than 5 years, complete gratuity is paid

Calculation Groups and Calculations

Gratuity payment is calculated through supplemental earnings Gratuity Payment that is part of calculation group

Gratuity. Calculations are done through element created as a Gratuity Payment.

To view details on calculation groups, calculations and elements:

1. Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager:

2. Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work-area.

3. Select GRATUITY Calculation and view the details.

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Legislative Repository for Calculation Information

To view predefined parameters:

1. Log in with a Payroll Manager role

2. Navigate to task Manage Payroll Calculation Information in the Payroll Calculation work area.

3. Select GRATUITY Calculation.

4. Open the Calculation Factors for the related element:

The calculation factors are used for calculating gratuity payments (gratuity bands represent the eligibility months).

5. Click on Range Values. Details of the calculation factors are displayed:

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Elements

Elements are the building blocks of payroll and benefits. There is no limit to the number of elements that can be

defined. Policies or business rules that govern the allocation of these elements to workers can be specified at the

element level.

Elements can represent:

Earnings, such as salary, wages, and bonuses

Compensation, such as employee stock purchase and insurance plans

Absences from work

Tangible items distributed to persons, such as tools, uniforms, mobile phones, or computers

Statutory deductions, such as employee taxes and social insurance

Voluntary deductions, such as loans

Involuntary deductions, such as court orders, as well as pretax deductions

Employer taxes and other employer liabilities

Elements are grouped into primary classifications, such as Earnings and Voluntary Deductions. In a human

resources department, you can use the primary classifications to identify groups of elements for information and

analysis purposes. In a payroll department, the classifications control processing, including the sequence in which

elements are processed and the balances they feed.

Oracle Fusion supplies many predefined elements (that cannot be modified at the implementation level), while

additional elements can be generated, defining certain types of compensation and payroll elements through

templates.

Element templates include the elements, balances, balance feeds, and formulas required for payroll processing.

Templates have various rules associated with them which will be used to create data based on certain criteria. The

template engine will get the values for the rules from the template and process the seeded template structure to

create appropriate data that is required.

Using the template infrastructure, UAE localization has defined its structures for creating a standard set of

elements for earnings, by modifying a global template questionnaire.

When creating an element the questionnaire that guides you through the creation depends on the classifications

selected for the element itself.

Once you complete the questionnaire and submit the process, the relevant payroll objects are generated. You now

have the ability to edit these objects (using the review pages and the object navigator) to ensure they fully meet you

business requirements.

Element Classifications

Global Payroll has defined a set of primary classifications and UAE localization has selected the ones that are

applicable for the country.

Additionally a set of secondary classifications and subclassifications have been defined specifically by the

localization.

Secondary classifications are used in the element template process to drive the questionnaire and also to

create the element with the needed characteristics.

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Subclassifications are used to control balance feeds and identify a sub type of the particular classification.

All the classifications predefined for UAE are listed in the Oracle_Fusion_HRMS_UAE_Payroll_Data.xls on My

Oracle Support (MOS).

Secondary classifications and subclassifications can be created at implementation level and they do not have any

impact on the UAE predefined data.

Primary Classifications

The following primary classifications are enabled for the UAE localization:

Absence Accruals

Absences

Balance Initialization

Direct Payments

Employer Charges

Information

Involuntary Deductions

Pre-statutory Deductions


Standard Earning

Supplemental Earnings

Voluntary Deductions

In the implementation phase, when creating an element though element template functionality, you are prompted

to select the primary classification for that element and this drives the questionnaire to use and also the

characteristics of the element that will be created.

Notes:

The subclassifications Subject to Social Insurance and Subject to Unpaid Leave are defaulted for all elements

with primary classification Standard Earning. This implies that all these elements:

o Will be part of the contributory salary

o Will not be paid in case of unpaid leave

Secondary Classifications

Secondary classifications are connected to primary classifications. The following secondary classifications have

been defined for the UAE localization:

Primary Classification Standard Earnings:

Additional Allowance

Basic Salary

Children Social Allowance

Cost of Living Allowance

Grade Allowance

Hourly Wage

Housing Allowance

Overtime Allowance

Shift Allowance

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Social Allowance

Transport Allowance

Unpaid Leave

Primary Classification Voluntary Deductions:

Loans

The selection of the secondary classification will drive the questions of the element template and the characteristics

of the element that is created. For the allowances created as standard earning these characteristics are described

more in detail in the section of element allowances.

Subclassifications

Subclassifications are connected to primary classifications. The following subclassifications are defined for the

UAE:

Primary Classification Standard Earnings:

Subject to Social Insurance

Subject to Unpaid Leave

Primary Classification Information:


Subject to Unpaid Leave

Primary Classification Absences:


All these five subclassifications are attributed by default to the elements created for the corresponding primary

classification.

During implementation, if there is a requirement to define an element that is not a standard earning, but is part of

the contributory salary, the steps to follow are:

1. Define a new subclassification and the corresponding subclassification rule.

2. Feed the contributory balance with this subclassification.

Reviewing Classifications

1. To review classifications , log in with a Payroll Manager role

2. Navigate to task Manage Element Classifications in the Payroll Calculation work-area

3. Select the appropriate Legislative Data Group (LDG) and view all the primary classifications defined for

the legislation connected to the selected legislative data group.

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4. Select a specific classification to vie secondary classifications and subclassifications defined for the

primary classification.

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Element Templates

A specific element template is available in UAE localization for the following primary classification:

Standard Earnings

For all other primary classifications, the standard global template is used also when creating UAE elements.

When selecting Standard Earnings as primary classification:

If no secondary classification is selected or Basic Salary or Additional Allowance secondary classification if

selected, then the standard element template is followed and no specific UAE consideration is applied.

If the other Allowances secondary classifications are selected, then allowances are created following UAE

specific rules that apply to the specific allowance type.

If Unpaid Leave secondary classification is selected, an element with UAE specific characteristics for the

UAE is created.

In the global standard template, the section of Calculation Rules is not displayed because the related global objects

must not be created for these elements since UAE specific objects must be created instead.

Viewing, for example, an element created with secondary classification Hourly Wage:

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You can see that specific input values have been created and a fast formula

(Test_Hourly_Allowance_AE_HOURLY_FF) is used to perform the calculations for this type of allowance.

When selecting Voluntary Deductions as primary classification:

If no secondary classification or End of Service Deductions secondary classification is selected, then the

standard element template is followed and no specific UAE consideration is applied.

If the Loans secondary classification is selected, then deduction element is created following Global

specific rules that apply to loans.

From a template questionnaire perspective, there is no difference with the global standard template, but in this

case, set UAE-specific objects are created in addition to the global ones.

Further information is provided in the element details section of the document.

Availability of Element Template Functionality Based on Product License

The availability of features in element templates depends on the type of license you have.

HR-Only: As an HR-only customer, you get access to the basic version of the element templates. These templates

create the element and you need to create the input values, formulas, balances to meet your business requirements.

Payroll Interface: As a payroll interface customer, you get access to a number of payroll features not available to

an HR-only customer. This includes access to the full earnings element that will create the element, input values,

formulas, balances. These earnings elements can be processed through the calculation to Gross process which is

also available to Payroll Interface customers. Any other type of element, such as deductions, is created using the

basic version of the element templates and you need to create the input values, formulas, balances.

Payroll: A payroll customer gets access to the full set of earning and deduction templates. These templates create

the element, input values, formulas, balances.

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Disclaimer Note: If you want to use an element in the payroll process, then the element must be created

after the payroll license is set. This creates the full set of data needed for payroll processing, such as

element definition, input values, balances, formulas. If payroll license is set after the element is created the

above data will not be created.

Setting up Licenses

1. Navigate to Payroll Process Configuration Task using the Functional Setup Manager (FSM)

2. Navigate to Default Group Tab

3. If you have overridden the group, then the payroll license must be set for that group.

4. Select Payroll License to decide Payroll License parameter name and edit it. Change the appropriate

license value.

You can enter following values:

HR_ONLY This must be set when customer is having an HR only license.

PAYROLL_INTERFACE This must be set when customer is HR only and has a payroll interface

license.

PAYROLL This must be set when customer has both HR and Payroll licenses

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5. Navigate to Manage Default Process Configuration Group Profile Option Values Task in the FSM:

6. Set the appropriate configuration group in the profile option value field:

Elements: Allowances, Unpaid Leave and Loans

Earning allowances, unpaid leave and loans are the elements for which UAE localization has predefined specific

calculation rules.

Allowances

The calculation rules for the below allowances are generated when creating the element using the related template.

Implementation teams need to elect the appropriate secondary classification when generating a new allowance

element. Implementation teams can also set up grade rates and calculation value definitions.

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The calculations of these allowances are triggered through element entries.

Children Social Allowance

The children social allowance depends on the number of dependent children. This allowance is paid to the local

nationals only.

The following input is required for the calculation:

Citizenship information in the calculation card for the person.

Contact details for the employee in the contacts section in the Manage Person page with contact type

Child. The dependent must also be marked as Statutory Dependent. Number of dependent children is

based on the data entered here.

A range value for the seeded calculation value definition details Children Social Allowance. Allowance

per child is based on the value entered here.

To create the range value:

1. Sign in to the Oracle Fusion application using a role that has the profile of a payroll manager.

2. Navigate to task Manage Calculation Value Definitions in the Payroll Calculation work area.

3. Select the calculation value definition details for Children Social Allowance:

4. Enter the value of the allowance per child by adding a row in Range Values

Note: The From Value must be 0, while any value can be chosen for the To Value since it does not affect

calculation.

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Note: The process of entering a value in calculation value definition details is the same for the other allowances.

Cost of Living Allowance

The cost of living allowance can be a flat amount or a percentage of salary.

The following input is needed to perform the calculation:

Range value for the seeded calculation value definition details Cost of Living Allowance Percent.

Range values for the seeded calculation value definition details Maximum Cost of Living Allowance

and Minimum Cost of Living Allowance: these two amounts will be used to set the maximum and

minimum amount, which a person eligible for the cost of living allowances.

Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already attached. The

value returned by this formula is used to take the base monthly salary for this allowance. The Cost of Living

Allowance Percent is applied to this monthly salary basis and the resulting amount is compared with the

Maximum Cost of Living Allowance and Minimum Cost of Living Allowance. In case this is out of range,

this is adjusted.

Grade Allowance

The basic salary is a fixed amount that is paid to the employee according to their grade. Since rates can be entered

for each grade, it is suggested that you use grade rate functionality for it.

The following is the input needed to perform the calculation:

Grades and grade rates must be setup following standard global process. The grade must be associated to

the payee in the Employment page.

Create an element entry for the payee entering the grade rate ID as an input value entry for Grade Rate.

Hourly Basic Salary

For employees under hourly contract the amount paid monthly is based on the number of hours worked during

the month. The hourly rate depends on the grade of the employee.

The following input is required to perform the calculation:

Create a grade and grade rate and associate it to the employee in Employment page and in Element entries

as shown previously in Grade Allowance.

The value is calculated based on the hours worked in month * value returned from the grade rate table.

Hours worked will be entered as input value.

Housing Allowance

Housing allowance depends on the grade and marital status of an employee. The allowance can be a percentage

(based on grade and marital status) or an amount (based on grade or marital status). In case of percentage based

allowance, the calculated allowance amount can be subjected to a maximum and minimum limit.

If the employee avails accommodation that is provided by the employer, then the monthly paid allowance is zero.

An override feature is provided where you can enter the amount of housing allowance and then no calculations are

performed.

The following input is required to perform the calculation:

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Housing allowance is paid to employee if accommodation is not provided by the employer. This

information is tracked at payroll relationship level and this value is defaulted to No in case there is no

value entered at payroll relationship level.

Marital status must be set for person in order to calculate the value of housing allowance and if no marital

status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative

information section.

Create range values for the seeded calculation value definition details Housing Allowance Grade Rate

for Married and Housing Allowance Grade Rate for Single. In the value field of the range value UI,

you can select the grade rate from the ones that have been defined as grade rates.

Attach a Gratuity Salary formula, in the employer gratuity PSU level calculation card, if not already

attached. The value returned by this formula is used to take the base monthly salary for this allowance if

you have entered value of input value Rate value to be used as Percent.

Create range values for the seeded calculation value definition details Maximum Housing Allowance

for Married, Minimum Housing Allowance for Married, Maximum Housing Allowance for Single

and Minimum Housing Allowance for Single. In the value field for range value, you must enter

minimum or maximum value depending on the marital status. These values are used to get the allowance

amounts if you have entered value of input value Rate value to be used as Percent. More specifically, if

this calculation option is selected, the rate is applied to this monthly salary basis. The resulting amount is

compared with the Maximum and Minimum values of the allowance and, in case of being out of range, is

adjusted.

Note: The calculation of housing allowance (similar to other allowances) is triggered by creating an element entry

for the payee and parameters that will drive the calculation is entered as input values:

Override Amount: allows overriding the final value of calculation.

Rate Value to be used as: drives the calculation method.

Overtime Allowance

Overtime allowance gets paid to an employee for hours worked beyond regular hours on normal working days.

The employee also gets paid when they work on rest days or holidays.

The overtime rate is a percentage of the salary that depends on the grade and is different for hours beyond regular

(on normal working days) and hours on rest days.


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Attach a Gratuity Salary formula, in the Employer Gratuity PSU level Calculation Card, if not already

attached. The value returned by this is the base monthly salary that is converted to a hourly salary using

ROUND((monthly_salary * 12)/(365 * 8),2)

Create range values for the seeded calculation value definition details Overtime Allowance Grade Rate

for Regular Days, Overtime Allowance Grade Rate for Rest Days. In the value field of the range

value UI, you must choose the grade rates that are used to get the amount for rest and normal day

overtime.

Shift Allowance

Shift allowance depends on the grade and may also depend on the nationality of an employee: the allowance can be

in percent (based on grade and nationality) or in amount (based on grade and nationality). In case of a percent

based allowance, the calculated allowance amount can also be subjected to a max and min limit.

An override facility is also provided wherein you can enter the amount and then no calculations are performed.

The amount entered is processed directly as the shift allowance.


Create range values for the seeded calculation value definition details Shift Allowance Grade Rate for

National, Shift Allowance Grade Rate for Non-National. In the value field of the range value page,

you must choose the grade rates, which are used to get the shift allowance amount for UAE and no-UAE

citizens.

Create range values for the seeded calculation value definition details Minimum Shift Allowance,

Maximum Shift Allowance. In the value field of the range value UI, you must enter minimum or

maximum value of the shift allowance. These values are used to get the allowance amount if you entered

the input value Rate value to be used as Percent.

Social Allowance

Social allowance depends on marital status of the employee and is paid only to UAE citizens.


Enter the citizenship in the calculation card for the person.

Marital status must be set for person in order to calculate the value of social allowance and if no marital

status is set, no allowance is paid to the employee. Marital status is retrieved from the legislative

information section.

Create range values for the seeded calculation value definition details Social Allowance for Married,

Social Allowance for Single. In the value field of the range value, you must enter social allowance

amount for the married or single employee.

Transport Allowance

Transport allowance depends on the grade and marital status of an employee. The allowance can be a percentage

(based on grade and nationality) or an amount (based on grade or nationality). In case of percentage based

allowance, the calculated allowance amount can also be subjected to a maximum and minimum limit.

If transportation is provided by the employer, then the monthly paid allowance is zero.

An override feature is provided where you can enter the amount of transport allowance and no calculations are

performed.


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Enter the transport allowance paid to employee if no transportation is provided by the employer. This

information is tracked at payroll relationship level and this value is defaulted to No, in case there is no

value entered at payroll relationship level.

Enter the citizenship in the calculation card for the person.

Create range values for the seeded calculation value definition details Transport Allowance Grade Rate

for National and Transport Allowance Grade Rate for Non-National. In the value field of the range

value, you can select the grade rate from the ones that have been defined as grade rates.

Attach a Gratuity Salary formula, in the Employer Gratuity Details card, if not already attached. The

value returned by this formula is used to take the base monthly salary for this allowance if you have

entered value of input value Rate value to be used as Percent.

Create range values for the seeded calculation value definition details Maximum Transport Allowance,

Minimum Transport Allowance. In the value field of the range value, you must enter minimum or

maximum depending on the marital status. These values are used to get the allowance amounts if you

have entered value of input value Rate value to be used as Percent.

Allowances Setup: Worked Example

The requirement is to create an overtime allowance by which an overtime percentage of 110% is paid for regular

days and 150% is paid for rest days.

The following tasks need to be performed:

1) Create grade rates to store the percentages. Navigate to task Manage Grades in Workforce Structures

work area.

2) Add a grade rate for each one of the percentages:

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3) Associate these grade rates to range values. Navigate to the task Manage Calculation Value Definition

Details in the Payroll Calculation work area:

4) Associate the appropriate Grade Rate to the Range Value:

5) When an element entry is created for an Overtime Allowance element, the hours entered is multiplied by

the hourly salary and the appropriate overtime percentages defined in the previous steps is applied.

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Unpaid Leave

Unpaid leave element is generated by selecting unpaid leave as secondary classification in the element template.

The unpaid elements input value Days feeds the Leave Without Pay balance. The Leave Without Pay balance is

used in Gratuity calculation to get the unpaid or unauthorized absence.

This element also reduces the earnings, based on the amount calculated by the unpaid leave formula.

Creating an Allowance Element: Worked Example

This worked example describes how you can create an allowance element for Children Allowance.

1. Sign in to the Oracle Fusion application using a role that has the profile of a Payroll Manager:

2. Select Manage Elements in the Setup and Maintenance or Payroll Calculations work area:

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3. On the Manage Elements page, click Create.

4. On the Create Element window, select the LDG and a primary classification, then click Continue:

5. Complete the fields at the top of the Create Element page, and then answer the questions:

6. Click Next, and complete the rest of the questionnaire:

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7. Verify the information and click Submit to create the new element:

8. On the Element Summary page, provide additional information as needed, such as input values, processing rules, and eligibility:

Use the Element Overview panel to navigate through the setup pages.

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Note: Input values have been created for this element to receive information needed to calculate the value of

the allowance.

Note: Element eligibility must be defined so that the element is linked to an element entry.

9. In the Element Overview panel, select Actions, and Create Element Eligibility.

10. On the Element Eligibility page, enter a name in the Element Eligibility Name field and click Submit.

Note: If you enter only a name and no eligibility criteria, the element is eligible for all employees.

11. The Balance Feeds link shows the balances that are fed by this element. All the balance feeds (apart from Impl_Doc_UAE_Children_Allowance that was generated by element rules) are generated automatically through the element classification defaulting mechanisms (and the related balance feeds by classification).

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12. The Related Formulas link shows the formulas connected to the elements that were automatically generated by the template.

13. Navigate to Manage Fast Formulas link to verify if the newly created formula is compiled and if not,

compile it.

Voluntary Deductions: Loans

The Loan element for UAE is created for the primary classification Voluntary Deductions and the secondary

classification Loan.

The following loan types are supported for UAE:

Personal Loan

House Construction Loan

Housing Rent Loan

Car Loan

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Loan approval, processing and payments are outside the scope of payroll process. The payroll process only

supports the loan recovery process. Since the loan is interest free, there is no need for interest calculation.

The element that is created through the element template is the loan recovery element. Multiple loan recovery

elements can be created if the enterprise has several types of loans.

The input data that is needed to perform the loans calculation is entered though the input values at element entry

level.

1. The input fields are generated by the element template when creating the element:

2. The element template also generates a set of balances used to store accumulated values needed to process

the loan:

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3. Loan recovery is triggered for an employee by adding an element entry for an element classified as loan:

The following points must be considered when entering data:

Effective Start Date: Date on which the loan recovery will start.

Effective End Date: End date of the element entry (if the element is recurring) indicating the last period

when the loan must be recovered.

Period Type: Indicates the frequency with which the value entered in the amount field recurs. Typically it

is either Calendar Month or Annually.

Amount: Indicates the amount to be recovered for the instance of the loan. If period type is Calendar

Month, then the amount is deducted monthly. If period type is Annually, then the monthly deduction

equals Amount divided by 12. If a loan is suspended for a period, then an instance with monthly

frequency amount of 0 is created.

Gratuity Payment Element

The UAE localization has predefined the Gratuity Payment element that is used to process gratuity payments.

This element is automatically calculated in payroll whenever the End of Service calculation card is automatically

generated by the termination process.

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This element is feeding the gross pay and net pay balances:

Salary Basis and Additional Allowance Elements

In addition to the previously described allowances that are created using UAE specific templates, other earnings

such as salary basis and compensation elements can be created using global templates.

The following steps show how to create a regular earnings element for basic salary:

1. Follow steps 1-3 used in the worked example for allowance creation.

2. On the Create Element window, select the LDG and a primary classification. Click Continue:

3. Complete the fields at the top of the Create Element page, and then answer the questions:

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4. Click Next, and complete the rest of the questionnaire:

5. Verify the information and click Submit to create the new element:

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6. On the Element Summary page, provide additional information as needed, such as input values, processing rules, and eligibility:

Use the Element Overview panel to navigate through the setup pages.

7. Repeat this entire process to create a set of elements to support your business needs. For example, you might create another element (Impl_Doc_UAE_Additional_Allowance) for an additional allowance.

Auto Indirect Elements and Creation of Element Eligibility

Auto Indirect elements have been predefined by UAE localization to trigger Social Insurance and Gratuity

Calculations once the related person level cards have been assigned to the person. These elements are

automatically assigned as element entry to the person:

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This assignment is done without any action at the implementation level, but before assigning any person

calculation card the implementation team must create element eligibility for the Auto Indirect elements as in this

example:

This task is to be performed just once in the implementation process.

Proration and Retroactivity

In scenarios where an employee has a mid-period change, for example, changing the social security exception type

or the start or end of employment period during a month, a set of elements must be prorated.

In scenarios where the employee has a retrospective change, the payroll process must recalculate payroll for past

periods and generate retroactive deltas to be processed in the current period.

Proration

Prorating Earnings

When creating an element through element template you must consider if the element must be prorated for mid-

period events. The behavior of the element is managed in the first stage by the answering the question related to

proration contained in the questionnaire:

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If the answer is No, mid-period changes will not affect the calculated value of the element.

If the answer is Yes, the template prompts you to enter the Proration Group. The mid-period changes

may now potentially affect the calculated value of the element.

For elements enabled for proration the template associates by default the global standard proration formula:

Proration formula GLB_EARN_PRORATION uses natural days proration. For example, in case of hire or

termination in the course of the month, it uses as proration factor:

Employment days in the period or Calendar days in the period

To meet different business requirements, implementation teams can create your own specific proration formula

and attach it to the elements that follow these business requirements.

Events that trigger the proration calculation are identified through the selected proration group.

1. Log in with a Payroll Manager role.

2. Navigate to task Manage Event Groups in the Payroll Calculation work area.

3. Select Entry Changes for Proration

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4. View the changes that trigger proration.

No specific event group is predefined for the UAE localization. Additional event groups can be added in the

implementation phase.

Balances

Payroll balances show the accumulation of values over a period of time. The values can be currency, hours, or any

other numeric value. Most of the required balances are predefined and additional balances are created automatically

when creating elements. Implementation teams can edit the definition of these generated balances, or create

additional balances for calculations or reporting.

When a balance definition (balance type) is created, balance category and a unit of measure can be selected. Each

balance definition is grouped in a predefined balance category for quicker processing. Balance categories are

legislation-specific and cannot be modified.

Each balance can have multiple dimensions, which define the specific value to be retrieved. Balance dimensions

are predefined and typically combine these components:

Time span, such as run, period to date, or fiscal year to date

Employment relationship level, either assignment, terms, or payroll relationship

Context, required for some balances only, such as tax reporting unit (TRU), element, or payroll

When a specific balance dimension is linked to a balance type, this results in creating a defined balance.

The value assigned to a balance during processing is determined by balance feeds defined for the balance.

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Balance feeds can be by element input values or by balance classification run results.

Balance Feeds by Element: Indicates one or more element input values to add or subtract from a balance.

If a balance is fed by a single element, it is called a primary balance.

Balance Feeds by Classification: Indicates that all elements belonging to a specific classification will feed

that balance. Any type of classification can be used to feed the balance but it is to be remarked that if a

primary classification is added as a balance feed, the children of this classification from the secondary or

subclassifications cannot be added. Also, you cannot use both secondary classifications and

subclassifications in the same balance feed.

Balances are important for reporting because in most of the reports balances represent the values that are displayed

in the output. Balances can be aggregated (through balance attributes) in balance groups and balance groups are

the entities that are used by payroll reports to identify the balances to be included in specific sections of the report.

A set of balance definitions are provided by global payroll, but localizations have a predefined set of definitions in

addition to global data.

UAE localization has predefined data related to the following balance definitions:

Balance Categories (enabling of global categories)

Balance Types

Balance Dimensions and Usages (enabling of global dimensions)

Defined Balances

Balance Groups and Attributes

Balances Definitions predefined for UAE

This section describes the predefined balance definitions for the UAE localization and related tasks at

implementation level.

A detailed list of balances definitions predefined for UAE can be found in the UAE balances spreadsheet

Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS).

Balance Categories

The following global categories are enabled for UAE:

Absences

Earnings

Employer Charges

Information

Miscellaneous


Direct Payments


Pre-Statutory Deductions


Total Earnings

Note: When creating a new balance in implementation phase, it must be associated to one of the predefined

categories and categories cannot be added or modified in implementation phase.

Balance Types

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Balance types predefined by UAE localization are listed in the UAE Balances Spreadsheet:


In this section describes the balances that affect payroll calculation and that are likely to be fed by elements created

in the implementation phase.

A separate section is dedicated to the net pay balance due to its impact on the payment process.

Gross

Balance Gross Earnings collects all the gross earnings applicable for UAE and is fed by 2 primary classifications:

Standard Earnings

Supplemental Earnings

All elements created at the implementation level with these primary classifications feed this balance.

Unpaid Leave

Balance Subject to Unpaid Leave: Collects all the earnings that are not due to be paid when an employee is on

unpaid leave. This balance is fed by subclassification Subject to Unpaid Leave.

This subclassification is associated by default to earnings with primary classification Standard Earnings and

Information and so all elements created in the implement phase with these primary classifications will feed this

balance.

Balance Leave Without Pay: Used to track the unpaid absences that are used in Gratuity Calculation.

Social Insurance

Balance Subject to Social Insurance: Collects all the earnings that are liable to Social Insurance and fed by

subclassification Subject to Social Insurance.

This subclassification is associated by default to earnings with primary classification Standard Earnings and

Information and so all elements created in the implement phase with these primary classifications feeds this

balance.

The value of this balance is used as contributory salary if the same is not overridden.

Balance Contributory Salary is used as base in the contributions calculations. Subject to Social Insurance is

designed to store the earnings that make up the contributory base, but for private sector the base can be

overridden or adjusted so, eventually, if there is no override or adjustment balance, contributory salary balance is

equal to balance Subject to Social Insurance, otherwise it will account for the override or adjustment.

Net Pay Balance

During the payment process, the net pay balance is used to store the amount to be transferred as remuneration for

the payee. A net pay balance, named Net Pay, is predefined for UAE, and no additional setup is required during

the implementation phase.

To view the Total Pay balance:

1. Select Manage Balance Definitions in the Payroll Calculations or Setup and Maintenance work areas.

2. Enter Net Pay in the Name field and select a UAE LDG, then click Search:

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3. Click the Net Pay balance in the Search Results to view the balance information:

Note: The Use for Remuneration field must be set to Yes.

4. Click Balance Dimensions in the left panel to display the dimensions associated with this balance:

Note: The Core Relationship Payments is associated with this balance.

5. Click Balance Feeds in the left panel to display the classification that feed this balance:

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Note: all elements created in the implementation phase with these primary classifications feed this balance.

Balance Dimensions and Defined Balances

Balance dimensions enabled by UAE localization are listed in the UAE Balances Spreadsheet


As per employment model, balances are maintained at all four levels, that is: Payroll Relationship, Payroll Terms,

Payroll Assignment, and Group levels.

The only dimensions that can be selected when creating a balance in the implement phase are dimensions enabled

by UAE localization.

Combining balance types and enabled dimensions UAE has delivered a set of defined balances that are listed in the

UAE Balances Spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS).

Balance Groups and Attributes

Balance Groups group together balances. For the UAE, they are used mainly for reporting or online viewing

purposes, to identify balances that must be considered in specific sections. The way these balance groups are used

in specific features, such as the SOE, are detailed in the sections describing the features in detail.

The following balance groups are predefined for UAE:

AE_PAY_ARCH_GROUP_BALANCES_GROUP

AE_PAY_ARCH_REL_BALANCES_GROUP

These balance groups are used in the payslip, whereas all the other reports use global balance groups to which

country specific balances are connected.

The connection between defined balances and balance groups is managed through balance attributes.

Balance attributes can either be:

Created automatically through a defaulting mechanism depending on balance category and dimension

Predefined by localization

The AE Balances spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx contains information on:

Defaulting criteria

Attributes predefined by UAE localization

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When a balance that meets defaulting criteria is created in implement phase the related attribute is automatically

associated to the defined balance.

Defaulting criteria and attributed cannot be added or modified in the implementation phase.

Balance Groups can be restricted for a specific localization, so that only balances of certain dimensions or

categories are associated with a Balance Group. This is done through data that is predefined in the Pay Balance

Usage Items table. Data predefined in this table for UAE is shown in the AE Balances spreadsheet


Balances and SOE

The online Statement of Earnings (SOE) is a feature within payroll that allows the end-user to view all the relevant

information for an individual employee payroll run or a prepayment in a single place so that the results can be

easily viewed and verified.

This typically covers personal information, employment information, payroll information, absence information,

run results, messages and balances.

The SOE feature is part of global product and has been customized to meet country specific requirements.

Scope of this document is not to describe overall usage of the feature but to explain:

Criteria that drives the inclusion of specific balances in certain sections (the ones that contain balances

results) of the SOE

Predefined data for the SOE for UAE localization

How you can include user-defined balances in SOE

SOE Sections and Related Balances

Payroll results are displayed in the SOE in several sections:

The following paragraphs mention the sections populated by balance results and for each section the balance

groups and related attributed connected to the section are listed.

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Note: UAE localization has not predefined any balance group or attribute for SOE, so the global balance groups

are used.

Quick Reference Summary

This section is additionally split into four tabs of which, the following two contain data retrieved from balance

results:

Gross to Net: This tab includes results for balances (defined balances) connected to balance group:

GLB_SUMMARY_GROSS_TO_NET_BALANCE_GROUP that is connected to attribute

GLB_SUMMARY_GROSS_TO_NET_ATTRIBUTE

Information: This tab includes results for defined balances connected to balance group:

GLB_SUMMARY_INFORMATION_BALANCE_GROUP that is connected to attribute

GLB_SUMMARY_INFORMATION_ATTRIBUTE

Earnings

This section includes results for defined balances connected to balance group:

GLB_SOE_EARNINGS_BALANCE_GROUP that is connected to attributes:

GLB_EARNINGS_ATTRIBUTE

GLB_SUPPLEMENTAL_EARNINGS_ATTRIBUTE

GLB_TAXABLE_BENEFITS_ATTRIBUTE

Deductions

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GLB_DEDUCTIONS_BALANCE_GROUP that is connected to attributes:

GLB_PRE_STAT_DEDUCTIONS_ATTRIBUTE

GLB_INVOLUNTARY_DEDUCTIONS_ATTRIBUTE

GLB_VOLUNTARY_DEDUCTIONS_ATTRIBUTE

GLB_TAX_DEDUCTIONS_ATTRIBUTE

GLB_SOCIAL_INSURANCE_DEDUCTIONS_ATTRIBUTE

Information


GLB_INFORMATION_BALANCE_GROUP that is connected to attribute

GLB_INFORMATION_ATTRIBUTE

Employer Contributions


GLB_SOE_EMPLOYER_CHARGES_BALANCE_GROUP that is connected to attributes:

GLB_EMPLOYER_TAXES_ATTRIBUTE

GLB_EMPLOYER_CHARGES_ATTRIBUTE

Direct Payments


GLB_DIRECT_PAYMENTS_BALANCE_GROUP that is connected to attribute

GLB_DIRECT_PAYMENTS_ATTRIBUTE

Taxable Benefits


GLB_TAXABLE_BENEFITS_BALANCE_GROUP that is connected to attribute

GLB_TAXABLE_BENEFITS_ATTRIBUTE

Predefined SOE Data for UAE

UAE localization uses the global Balance Groups for SOE and consequently the global attributes.

To display balances seeded by UAE localization in sections where attributes are not generated by default,

predefined assignment of attributes to a set of defined balances are delivered for UAE localization.

The complete list of UAE delivered associations between defined balances and attributes is contained in the UAE

Balances Spreadsheet Oracle_Fusion_HRMS_UAE_Payroll_Balances.xlsx on My Oracle Support (MOS).

For UAE, the following connections are defined between balances and sections of SOE report.

Gross to Net Summary Section

Earnings

Employee Social Insurance


Net Pay

Social Insurance


56

Information Summary Section

Contributory Salary

Leave Without Pay


Information Section

Employee Social Insurance Adjustment

Employee Social Insurance Arrears

Employer Social Insurance Adjustment

Attributes cannot be created or modified in the implementation phase.

User-Defined Balances and SOE

When you need to create a defined balance with a specific balance categor

Documents

Oracle Fusion HRMS for UAE-Payroll Setup White Paper-Rel8 Final