Application: Human Resources

Setup Item: Salary Bases

Defining Salary Bases

The salary basis establishes the duration for which a salary is quoted, for example, hourly, monthly or
annually. Notice that an employee's salary basis is not necessarily the same as the pay periods of his or
her payroll. For example, an employee with an hourly pay rate has the salary basis Hourly Salary, but
can have an assignment to a weekly payroll.

You associate Regular Salary, Regular Wages, and any other elements you are using in salary
administration, with just one salary basis each. After completing its salary basis definition, you can
make entries to one of these elements using the Salary Administration window.

Note: You cannot use the Element Entries window or BEE facility to make entries to any elements
associated with salary bases.

You define a salary basis in the Salary Basis window.

Navigator: US HR Manager
Navigation To: Work Structures>Salary Basis

To define a salary basis:

1. Enter an appropriate name for the salary basis. If you are using predefined elements, go to step 4,
otherwise go to step 2.

Without predefined elements

2. Select a pay basis, for example, Annual or Hourly. If you selected Annual or Monthly, Oracle
HRMS identifies the number of payments and enters 1 or 12 in the Pay Annualization Factor field.
You can change this value, if required. If you selected Hourly, the Pay Annualization Factor Field
is blank. Enter your own values, if required. If you select Period, leave the Pay Annualization
Factor field blank. Oracle HRMS uses the payroll period of your employee as the annualization
factor. (Note: The pay basis is for information only. For example, to enable you to compare
salaries.)

3. Select the name of the salary element and input value associated with this salary basis. No go to
step 6.

With predefined elements

4. Select the appropriate pay basis for the predefined element you plan to use. For example, select
Monthly Salary for the Regular Salary element in the US. If you selected Annual or Monthly,
 Oracle HRMS identifies the number of payments and enters 1 or 12 in the Pay Annualization
Factor field. You can change this value, if required. If you selected Hourly, the Pay Annualization
Factor field is blank. Enter your own values, if required. If you select Period, leave the Pay
Annualization Factor field blank, Oracle HRMS uses the payroll period of your employee as the
annualization factor. (Note: The pay basis is for information only. For example, to enable you to
compare salaries.)

5. Select the appropriate element and input value (for example, in the US, Regular Salary and the
input value Monthly Salary, or Regular Wages and the input value Rate).

All

6. Select a grade rate to associate with the salary basis, if required. Oracle HRMS uses the grade rate
to validate your salary proposals. You receive a warning if the salary you enter for an employee is
not within the grade rate range defined for the employee's grade.

In doing this check, the system takes account of the hours in the employee's standard work week. It
looks at the hours on the employee's work schedule, or if there is none, at the regular working hours
per week entered on the employee's assignment, and compares them with those entered for his or
her organization.

If the employee works fewer than the standard hours per week for the organization, the system
prorates the permissible minimum and maximum grade rate values before validating the salary.

7. Select the grade rate basis (Hourly, Monthly, Annual, or Period) for the rate if you selected a grade
rate. For example, if your grade rate specifies the valid monthly salary range for each grade, select
Monthly Salary in the Grade Rate Basis field.

If you selected Annual or Monthly, Oracle HRMS identifies the number of payments an enters 1 or
12 in the Grade Annualization Factor field. You can change this value, if required.

If you selected Hourly, the Grade Annualization Factor field is blank. Enter your own values, if
required.

If you selected Period, leave the Grade Annualization Factor field blank. Oracle HRMS uses the
payroll period of your employee as the annualization factor. Again, this is for information only,
allowing you to compare salaries within grades.

8. Save your changes.

This is an example for the Nonexempt Salary Basis setup:

This is an example for the Exempt Salary Basis setup: