Two tiered calculation
Problem:
I need to define a formula for a deduction or a benefit and I would like it tiered. How do I go about this?
Solution
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Solution:
Paymate uses Payroll Categories to define Earnings, Benefits, Deductions, Payroll Tax, Accrual, and miscellaneous items. When you define a formula deduction or a formula benefit, you may specify it as Two Tiered.
When you click on Two Tiered Calculation you will see 4 more fields:
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| Annual Threshold |
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| % to apply to Lower Tier |
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| % to apply to Higher Tier |
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| Prorate Threshold |
Example 1, if you specify:
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- The formula as 100% of all Earnings
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- The Annual Threshold as $40000.00
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- The % for Lower Tier as 2%
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- The Higher Tier as 4.8%
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- Prorate Threshold is checked
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Then the calculation on a single payroll would look like this
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the following:
- Employee is paid Monthly
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- Employee has $4000.00 paid on January timesheet
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- Threshold on this timesheet would be $3333.33 (Annual Threshold / Employee Pay Frequency)
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- 2% of $3333.33 is $66.67
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- 4.8% of $666.67 is $32.00
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- Result would be $98.67
Example 2, if you specify :·
- The formula as 100% of all Earnings
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- The Annual Threshold as $800.00
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- The % for Lower Tier as 2%
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- The Higher Tier as 4.8%
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- Prorate
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- threshold is unchecked
Then the calculation on a single payroll would look like this :·
- Employee is paid Monthly
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- Employee has $4000.00 paid on January timesheet
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- 2% of $4000.00 is $80.00
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- Result would be $80.00
Program Acclaim will use the lower tier percentage until the year-to-date of this category is reached to annual threshhold threshold ($800.00), then the program will use the higher tier percentage.