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Example of a pay adjustment for time and attendance [AX 2012]

Updated: October 18, 2012

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

This topic provides an example of using the pay adjustment feature in time and attendance.

Suppose that the overtime regulations for a legal entity state that overtime will only be paid if the worker has worked a minimum of 40 hours of standard time per week.

If a worker has worked overtime at the start of the week, the overtime is reduced if the worker has not reached 40 hours of standard time at the end of the week, and the missing standard work hours are defined as absence without a valid reason.

If the missing standard work hours are caused by absence with a valid reason, no reduction is made in the overtime.

The following table shows the pay types that the legal entity creates.

Pay type

Paid for

1201

All standard work hours.

1301

The first two hours of overtime per day.

To make sure that the workers receive the correct amount of overtime pay, a pay adjustment rule can be set up:

Paid overtime will be reduced if the actual number of standard work hours for the pay period is less than the expected number of standard work hours.

The calculation of the pay adjustment is based on the following information:

  • The calculated expected standard time for the week.

NoteNote

The expected standard time for a day is the time between the planned clock-in time and clock-out time, as set up in the profile. For more information, see About profiles for time and attendance registrations.

  • The realized paid standard time.

NoteNote

The realized paid standard time for a day is all the paid hours minus the overtime hours.

The number of earned overtime hours is reduced with the difference, if any, in the number of paid standard time work hours compared to the number of expected standard time work hours for the period.

The following table displays the expected clock-in and clock-out for a worker, the actual clock-in and clock-out, and the calculation of overtime.

NoteNote

You can update the calculation parameters so that absence is considered to be payable time. Click Human resources > Setup > Time and attendance > Calculation parameters.

Mon

Tue

Wed

Thu

Fri

Total

Expected clock-in time

07:00

07:00

07:00

07:00

07:00

N/A

Expected clock-out time

15:00

15:00

15:00

15:00

15:00

N/A

Expected paid time

8 hours

8 hours

8 hours

8 hours

8 hours

40 hours

Actual clock-in time

07:00

07:00

09:00

07:00

09:00

N/A

Actual clock-out time

18:00

14:00

15:00

18:00

15:00

N/A

Paid (valid) absence

0 hours

1 hour

0 hours

0 hours

0 hours

1 hours

Not paid (not valid) absence

0 hours

0 hours

2 hours

0 hours

2 hours

4 hours

Total paid time

11 hours

8 hours

6 hours

11 hours

6 hours

42 hours

Overtime

3 hours

0 hours

0 hours

3 hours

0 hours

6 hours

NoteNote

Settings for the absence group will determine whether the absence is valid. If absence time is not considered valid, select the Deduct overtime check box in the Absence groups form. Click Human resources > Setup > Absence > Absence groups.

The following table shows how payroll transactions calculated for Monday and Thursday, according to the rules specified previously for paying standard time and overtime.

Monday

Thursday

Paid overtime Pay type 1301

3 hours

3 hours

The total number of paid hours for the week is 42, of which 6 hours are overtime.

The paid standard time for the week is 40, so the overtime should be 42 minus 40 = 2 hours.

The four hours of overtime reducing absence must reduce the paid overtime of the week. You can enable this by setting up a Pay adjustment.

  1. Click Human resources > Setup > Time and attendance > Payroll > Pay agreements.

  2. Select the pay agreement to make the adjustment to, click the Pay adjustment button, and set up the following information:

    • In the Base field, select Pay time.

    • Leave the Pay type field empty.

    • In the Criteria field, select < Normtime.

    • In the Adjustment method field, select Period.

    • Select the Active check box.

  3. Click Pay periods, and select or create a period of one week.

  4. Click Adjustment pay types, and select Pay type 1301.

After the pay adjustment has been set up the necessary adjustments will be made daily when workers’ registrations are approved and transferred. For more information about approving and transferring registrations, see About calculating, approving and transferring registrations.

The following table shows how corrections will be made to the payroll transactions.

Monday

Thursday

Total

Paid Overtime before adjustment

+ 3 hours

+ 3 hours

+ 6 hours

Adjustment Pay type 1301

- 3 hours

- 1 hours

- 4 hours

Paid Overtime after adjustment

0 hour

+ 2 hours

+ 2 hours.

NoteNote

Although the overtime that reduces the absence occurred on Wednesday and Friday, the adjustments are shown beginning on the first day of the selected pay period.


Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).
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