Configure Earning Limits

Earning limits are used to set maximum amounts that employees are paid for generated earning definitions. Configuring an earning limit is an optional process by which you set an earning limit for the amount calculated for the generated earning.

You can set limits on generated earnings for different periods of time, such as:

in each pay period
in a month-to-date
in a quarter-to-date
in a year-to-date
in a fiscal-year-to-date

The following examples illustrate some ways that you can configure earning limits:

to ensure that the employees cannot earn more than $1,000 in overtime in a single month
to ensure that employers do not contribute more than $2,500 to the 401(k) accounts of employees in a year
to ensure that a generated earning amount does not exceed 25% of the regular earnings of employees

An earning limit can be configured as a flat amount or as a percentage of a deduction, earning, or grouping.

When the generated earning reaches the limit for its time period, the application reduces any amounts calculated for the generated earning to zero. For example, employer RRSP contributions, a generated earning, are configured as 4% of all of the employee's time-driven earnings (regular pay, overtime, and vacation pay), and you have configured a generated earning limit of $100 per pay period. An employee enters a lot of overtime during a single pay period, so that their total earnings are $2,600. The calculation used for the RRSP contribution multiplies the total employee earnings by 4%, resulting in an amount of $104. However, because the earning limit is configured for a maximum amount of $100 per pay period, application reduces any amount above this to zero, and the employee is paid $100 into their RRSP account.

To configure an earning limit:

Go to Payroll Setup > Earnings and Deductions.
Click the Earnings tab.
Select the earning definition to set its limit.
Click the Limits tab.
Click Add.
In the Accumulation Type drop-down list, select a period for which the limit is enforced:
- Current Pay: The application applies the limit to the current pay; each pay is capped at the specified limit.
- Fiscal Year to Date: The application applies the limit to the entire fiscal year; the application tracks the amount employees have earned from the start of the fiscal year to date and caps it at the specified limit.
- Month to Date: The application applies the limit to the current month; the application tracks the amount employees have earned from the start of the month to date and caps it at the specified limit.
- Quarter to Date: The application applies the limit to the current quarter; the application tracks the amount employees have earned from the start of the quarter to date and caps it at the specified limit.
- Year to Date: The application applies the limit to the current year; the application tracks the amount employees have earned from the start of the calendar year to date and caps it at the specified limit.
In the Accumulation Type Detail drop-down list, select one of the following options to determine how your check amount is applied:
- Current check Legal Entity accumulation only: The limit amount applies only to the legal entity of the check that is being calculated.
- Sum accumulation across all Legal Entities for the country: The limit amount applies against the earning or deduction amount that is summed across all legal entities in the country over the selected accumulation period.
In the Access drop-down list, select the way that the limit is applied. Similar to defining generated earnings, limit values can be employee, pay group, or payee-specific. Select one of the following:
- Employee: Limits are employee-specific and provided on each employee's HR record.
- Pay Group: Limits are pay group-specific and provided in the Pay Groups sub-tab of the Earnings tab in Payroll Setup > Earnings and Deductions. Employee overrides cannot be provided, so the limit specified for a pay group is used for all employees who belong to that pay group.
- Pay Group or Employee Override: Limits are pay group-specific but can be overridden per employee in the employee record of People. You could limit overtime earnings to $1,000 per pay in a pay group as a default value for the limit, but then specify overrides of $1,250 for the location's managers. For employees with an override in the employee record of People, the application uses the employee-specific limit instead of their pay group's limit.
- Payee or Employee Override: Only used when limiting a generated earning that is being sent to a payee (both the Generated and Allow Payee checkboxes are selected in the Details tab), such as an RRSP match that is being sent to a financial institution on behalf of the employee, limits are payee-specific and specified in the Payee tab of the earning definition.
- These values can be overridden per employee in the employee record of People.
In the Limit Type drop-down list, select one of the following:
- Fixed Amount: Limits the earning to a specified dollar amount.
- Percent of: Limits the earning to the percentage of a referenced earning, deduction, or grouping, and displays additional controls:
  - In the Look Up Type drop-down list, select the reference (earning, earning grouping, deduction, deduction grouping, or expression rate table) used calculate the earning limit
  - In the Look Up Value
If you selected Percent of, the application displays the Look Up Type drop-down list.
Then, select the specific deduction, deduction grouping, earning, or earning group in the Look Up Value drop-down list.
Click Save.

Next, you need to provide the limit's value, either per pay group, employee, or payee, and any employee overrides, as necessary:

See Appendix: Access Authorization Library.

Pay Group Limits

With the appropriate earning selected, select the Pay Groups tab.
If you would like to add a pay group to the earning definition, click Add.
1. In the Pay Group column, select a pay group.
2. In the Schedule column, select how often the earning definition is applied to the pay group.
3. In the Effective From column, select the start date of the default schedule.
4. In the Effective To field, optionally select the end date of the default schedule.
Enter an earning limit for the pay group.
1. Expand the pay group for which you want to define a limit.
2. In the Limits section, enter the flat amount or percentage for the limit, depending on whether you selected Percent of or Fixed Amount in the Limit Type drop-down list of the Limits tab. Or leave both fields blank to use the value of the referenced earning, deduction, or grouping.
Click Save.

Payee Limits

With the appropriate earning selected, select the Payees tab.
If you would like to add a new payee to the earning definition, in Payee Category, select the category that the payee belongs to and click Add.
1. In the Payee column, select the payee from the drop-down list. If the payee category does not have any assigned payees, you cannot define a payee limit for the category. Payees are assigned to a payee category when you configure a third-party payee. See Third Party Payee Configuration.
2. In the Schedule column, select how often the payee receives the payment.
3. In the Effective From column, select the start date of the default schedule.
4. In the Effective To column, enter the end date of the default schedule. This step is optional.
5. In the Default column, select the checkbox if you want to make this payee appear by default whenever you add this earning as a payroll election in the employee record.
Enter an earning limit for the payee.
1. Expand the payee for which you want to define a limit.
2. Enter the flat amount or percentage for the limit, depending on whether you selected Percent of or Fixed Amount in the Limit Type drop-down list of the Limits tab. Or leave both fields blank to use the value of the referenced earning, deduction, or grouping.
Click Save.

Employee Specific Limits

Employee specific values are provided in an employee record of People.

To provide employee override values:

Go to People, open the employee profile, and click Payroll > Payroll Elections.
Select the appropriate earning, if it’s displayed; if it isn’t:
1. Click Add.
2. Select the earning in the Earning drop-down list.
3. Click the calendar icon next to Effective Start and select when the limit is applicable from the calendar.
4. If necessary, specify an effective end date in the Effective End field. The application only limits the earning during the effective date range defined by the Effective Start and Effective End fields. By default, the Effective End field is blank and the value does not expire.
5. In the Code field, select the name of the earning.
After expanding the appropriate earning, enter the amount or percentage of the limit in the Parameters section.
Click Save.