EPY: Understanding Annualization Functionality in HRMS 9.1 Contract Pay
(Doc ID 1453657.1)
Last updated on JANUARY 27, 2020
PeopleSoft Enterprise HCM Payroll for North America - Version 9.1 and later Information in this document applies to any platform.
The annualization calculation (for taxes and imputed income calculations) for Contract Pay employees who are paid over less than the full year works differently than it does for non-contract pay employees.
For Contract Pay employees who are paid over less than 12 months, the earnings can be annualized over the number of pay periods that the contract payment spans, the number of pay periods for the entire year, or for a user specified number of periods.
An ‘Annualization Option’ radio button has been added to the Contract Pay Type Table in HRMS 9.1 as well as on the individual Contract Pay page. The annualization option on the Contract Pay Type Table defaults to Annualize over Payment Periods, but can be setup as required. The radio button on the employee’s Contract Pay page will default to the value on the Contract Pay Type Table but can be overridden. The system will use this annualization option to pass an annualization factor to the PAY_EARNINGS record so that the payroll calculation process will use the appropriate annualization factor.