Create Generated Earning Definitions

Before You Begin: If you are configuring the definition for a generated earning that is paid to a third party payee, you must first set up the third party payee in Dayforce. Information and instructions are available in Third Party Payee Configuration.

Note: The availability of the Tax and Compliance dialog box depends on country selection. If your earning is associated only with a ConnectedPay-enabled country, this dialog box is bypassed, and tax and compliance is auto-assigned, based on the earning type that you select. If you select at least one native Dayforce country (for example, Canada, US, UK, or Ireland), the application prompts you with the Tax and Compliance dialog box to select a tax and compliance rule for that native Dayforce country.

To configure a generated earning definition:

Go to Payroll Setup > Earnings and Deductions and click the Earnings tab.
Select one of the following ways to create an earning definition:
- Click Add to create an earning. In the Add Earning dialog box, select an Earning Type and the country or countries that you want to associate with the earning, and leave the Process for Employment drop-down list blank. Then, in the Tax and Compliance dialog box, select an earning in the list that will be used as a template to create the new earning definition. To filter this list, enter the earning name in the Search box. Click Select this Rule to apply the template, and the click Finish.
- Select an earning in the list you would like to copy, and click Copy.
In the General sub-tab, enter a name, a description, and a reference code for the earning definition.
Select the Generated radio button to load the Parameters, Limits, and Pay Groups tabs.
If you do not want the application to print the memo calc earning on earning statements, select the Suppress on Earning Statement checkbox in the Statement Overrides section.
Select the Allow Payee checkbox to generate the Payees tab.
(Optional) Enter a cross-reference code in the Reference Code field.
(Applicable for reimbursement earnings only) Select the Exclude from Disposable Net checkbox to exclude the reimbursement earning from deduction calculations and add the total reimbursement to the employee's net pay. See Exclude from Disposable Net.
Select the Overtime Earnings checkbox to flag the earning as contributing to overtime earnings.
Then, select the appropriate checkboxes to display the corresponding information in the employee earning statements:
- Display Earnings on Compensation Statement
- Suppress on Earning Statement
Click Save.
In the Options sub-tab, select a Source option for the deduction to specify whether it is Benefits or Payroll.
Ensure that the Separate Check Template drop-down list is blank.
Select the Gross Up checkbox to configure an earning that is used for gross-up payments. See Gross Up Earnings.
(Optional) Enter a number in either the Debit Journal Number or Credit Journal Number field to identify general ledger information to be exported. See General Ledger Setup.See General Ledger Setup.
Select the Premium checkbox to display all or part of the earning as a separate, premium line item in the General Ledger. This setting can impact how information is displayed in earning statements, which you can read about in Earnings and the Earnings Tab.
If necessary, record the percentage of the earning to be considered premium in the Premium Portion field. If left blank when the Premium checkbox is selected, the application automatically allocates 100% of the earning as premium.
Select the Generate Only on Current Pay Group checkbox to generate the earning only in the employee's current pay group.
Select the Extend Date Effectiveness to Pay Date checkbox to configure the earning so that it is applied for a pay period, even if employees are assigned the earning after the pay period’s end date but before its pay date.
(Service User role only) Select an option in the Mid-Period Proration drop-down list for the application to prorate scheduled earning elections that are started or ended mid pay period. See Mid-Period Proration for Payroll and Benefits Elections.
Depending on the country of your pay group, in the Settings by Country section, configure the following options:
- (US Only) Select the Allow Multi Jurisdiction Allocation Split checkbox to apply a multi jurisdiction split to an earning when a split is configured for an employee in the Multi Jurisdiction Allocation % and Telecommuter % fields in the Work > Work Assignments screen in People. For an example of how this option works, see the description of this checkbox under "United States" of the "Options Sub-Tab" section in Earnings and the Earnings Tab.
- (Canada Only) Select an option from the LSF Type drop-down list to identify taxable benefit earnings as Fondaction or FTQ contributions so that wages are reported in RL-1 form box G-1 (taxable benefits in kind) and excluded from box G (QPP pensionable earnings). See Earnings as LSF Contributions.
Click Save.

After you save the earning definition, the initial configuration is complete. You still need to define how the generated earning is calculated by the application, such as a flat amount per pay, a percentage of another earning, deduction, or a variety of other calculation methods, by specifying the earning parameters and then providing the values for these calculations, typically per pay group.

For example, if the generated earning is either 5% or 8% of an employee's regular earnings, the earning parameters define that the calculation method is a percentage of regular earnings, and the pay group specific values specify whether that percentage is five or eight percent.

Finally, if the payment represented by the generated earnings definition is being sent to a payee, you need to select the appropriate payee and define the payment schedule.

These processes are described in the sections below.

Configure Earning Parameters

This section describes how to configure the earning parameters that dictate what method the application uses to calculate the generated earning payments. Generated earnings can be calculated as:

Above amount of: The application uses a specified dollar amount and a referenced earning, deduction, or grouping to calculate the payment; it subtracts the dollar amount from the referenced earning, deduction, or grouping, and the result is the payment for the generated earning.
For example, employers reimburse anything over $250 of a specific deduction; with the deduction referenced and 250 specified as the value, the application subtracts 250 from the deduction amount during the payroll process and pays the employee the difference. During one pay period, the deduction for an employee is $350, so the application calculates the generated earning as $100. For the next pay period, the deduction is only $300, so the application calculates the generated earning as $50.
Note: If this calculation results in a negative value, the generated earning will be a negative amount; so if it subtracts 250 from 50, the generated earning will have a negative $200 value.
Above percent of: The application uses a specified percentage and a referenced earning, deduction, or grouping to calculate the payment; it calculates the percentage of the referenced earning, deduction, or grouping, subtracts this value from the total, and the result is the payment for the generated earning.
This is similar to the 'Above amount of' option, except that it is based on a percentage of a total. For example, with 65 specified as the value and a deduction referenced, the application calculates 65% of the specified deduction and deducts this from the total; so if the deduction is $100, it calculates 65% of this, or 65 dollars, and subtracts that value from the total, resulting in a generated earning of $35.
Expression: Used to define complex calculations to determine the amount of a generated earning. While the other calculation types are useful for a majority of situations, they are limited when a more complex calculation might be required. For example, employees at a firm in the United States contribute to a 401(k) plan. They can contribute 5% of their regular earnings up to $20,000 to a 401(k) plan, then 2.5% of their earnings when those earnings exceed $20,000; this can be accomplished by writing an expression.
With this option selected, you need to define your own expression to determine the deduction's value. An expression is a set of statements that calculate a value. Expressions are written in what is essentially a low-level programming language. That language is flexible enough to deal with both simple scenarios and more complex ones. As with any programming language, an expression has specific building blocks and rules.
For more information about the expression builder, including examples, see the Expression Builder Guide.
Flat amount: The application does not perform any calculations. Instead, the generated earning is whatever dollar amount specified in the generated earning's configuration. For example, the generated earning has a $350 value specified; the generated earning is always $350.
Flat amount of: The application does not perform any calculations. Instead, the generated earning is the value of the referenced earning, deduction, or grouping. For example, if an employer matches an employee's RRSP contributions dollar for dollar, the earning that represents this matching amount can reference the deduction that represents the employee's RRSP contributions. If the application deducts $300 from an employee's pay to go towards their RRSP, then the generated earning is calculated as $300, an exact match of the referenced deduction.
Percent of: The application uses a specified percentage and a referenced earning, deduction, or grouping to calculate the payment. It calculates the percentage of the referenced earning, deduction, or grouping and uses the result as the payment for the generated earning.
For example, with 10% specified and regular earnings referenced for a generated earning definition that represents employee bonuses, the application calculates 10% of an employee's regular earnings. For an employee with $1,000 in regular earnings, the application calculates the generated earning as $100.

To configure earning parameters:

Go to the Earnings tab of Payroll Setup > Earnings and Deductions.
Select an earning definition, and then, click the Parameters sub-tab.
Select a calculation method in the Calculation Type drop-down list.
Select whether the earning will be generated for all of an employee's associated legal entities or just the primary legal entity in the Apply from Normal Checks by Legal Entity drop-down list.
In the Access drop-down list, select an option to determine how the parameters involved in the calculation are specified. The Access drop-down list isn’t available when you select the Expression calculation type.
In the Look Up Type drop-down list, select an option to define the reference used to calculate the generated earning. Look Up Type isn’t displayed for the Flat Amount and Expression calculation types.
(Optional) In the Look Up Value, select the specific earning, deduction, or grouping that the generated earning references from the corresponding drop-down list.
Click Save.

After you save the earning parameters, you define how the generated earning is calculated by the application, but you still need to provide the values that are used in that calculation. If an earning is 10% of regular earnings, for example, you finished defining that it is calculated as a percentage of regular earnings, but you need to provide the 10% value. This is described in the following section.

Define Generated Earning Values

This section describes how to specify the values that the application uses either as the flat amount for an earning or in the calculations performed to determine the generated earning's payments; values can be specified for employees, pay groups, or payees, depending on how you configured the earning parameters, and their numerical value can represent a dollar amount or percentage.

Pay Group Specific Values

This subsection describes how to define pay group specific values. The value that you specify for a pay group is used for all of the employees who belong to the pay group, unless they have an employee override on their records in People.

You need to perform these steps if you configured an earning with either the Pay Group option or Pay Group or Employee Override option selected in the Access drop-down list in the Parameters sub-tab.

To define pay group values:

Go to Payroll Setup > Earnings and Deductions, and click the Earnings tab.
Select an earning definition selected, and click the Pay Groups sub-tab.
Click Add.
Select an appropriate group in the Pay Group drop-down list.
Click the Schedule field, and select how frequently employees are paid the generated earning.
In the Effective From field, select when the pay group's value is applicable from the calendar.
(Optional) Specify an end date in the Effective To field. The application only calculates the generated earning with the specified pay group's value during the effective date range defined by the Effective From and Effective To fields.
Expand the pay group, and in the Parameters section, enter the dollar amount or percentage value that should be used in the earning calculation. Whether the application accepts dollar amounts or percentages is determined in the configuration settings that you set up in the Parameters sub-tab.
Repeat these steps to define pay group-specific values for each pay group that receives the generated earning.
Click Save.

Payee Specific Values

This subsection describes how to define payee specific values. The value you specify for a payee is used for any employee assigned to the payee in People for the generated earning, although these values can be overridden on a per employee basis.

For example, payments for an RRSP contribution match can be sent to one of several financial institutions; these are configured as payees in the application. Each are configured with payee specific values, such as a 25% match of the RRSP deduction employees pay into their accounts, in the earning definition that represents the RRSP contribution match generated earning. Then, when employees are assigned a payee for their RRSP contribution, depending on the bank they want to have their RRSP account with, administrators can override the value used in the calculation, if necessary.

You need to perform these steps if you configured an earning with the Payee or Employee Override option selected from the Access drop-down list in the Parameters sub-tab.

Before You Begin: Before you can link a generated earning to a third-party payee, such as the financial institution that manages employees' RRSP accounts, you need to set up details about the payee. See Third Party Payee Configuration.

Select an earning definition, and click the Payees sub-tab.
In the Payee Category drop-down list, select the category that the payee is a member of. The category that you select filters the list of payees that you can select as part of the earning definition. For example, if you select the Benefit category, Dayforce only shows payees that are configured with the Benefit category.
Click Add.
Select how frequently employees are paid the generated earning from the Schedule list. For example, if the generated earning is paid every pay, select Every Regular Run.
Enter a date in the Effective From field.
If necessary, specify an effective end date in the Effective To field. The application only calculates the generated earning with the specified value during the effective date range.
Expand the payee row, and in the Parameters section, enter the dollar amount or percentage value that should be used in the earning calculation. Whether the application accepts dollar amounts or percentages is determined by the configuration settings that you set up in the Parameters sub-tab.
Repeat these steps to define as many payee specific values as needed.
Click Save.

Employee Specific Values

This subsection describes how to define employee specific values or employee overrides of pay group values, as well as assigning payees to employees for a generated earning.

You need to perform these steps if you configured an earning with the Employee or Payee or Employee Override option selected from the Access drop-down list in the Parameters tab.

Employee specific values and payees are assigned in the People feature.

To provide employee override values:

Go to People, open the employee profile, and click Payroll > Payroll Elections.
In the Payroll Elections section, click Add.
In the Type drop-down list, select Earning.
In the Code drop-down list, select the earning you want to provide an employee-specific value for.
Select how frequently employees are paid the generated earning in the Schedule list.
For example, if the generated earning is paid every pay, select Every Regular Run.
Enter a date in the Effective Start field.
(Optional) Enter an end date in the Effective End field. The application only calculates the generated earning with the specified value during the effective date range.
By default, the Effective End field is blank and the value does not expire.
In the Parameters tab section, enter the employee override value for this earning.
Whether the number you enter represents a dollar amount or percentage depends on how the earning definition was configured on its Parameters tab.
Click Save.
The application uses the provided value when calculating the generated earning, regardless of the value specified for the employee's pay group for the earning.

If you have configured a generated earning that uses a payee, you need to assign the payee to employees, and, if necessary provide different employee specific values; generated earnings that are sent to an RRSP account might be configured with multiple payees, each representing a financial institution that manages RRSPs. Employees need to be assigned the payee that represents the bank they use for their RRSP accounts.

Payee-specific values provide a default value that can be overridden, per employee, if necessary, such as the previous example where payments to a parking company for monthly passes at the employer's various locations might differ between employees, based on higher parking costs at some locations.

To specify a generated earning's payee and employee value:

Go to People, open the employee profile, and click Payroll > Payroll Elections.
In the Payroll Elections section, click Add.
In the Type drop-down list, select Earnings.
In the Code drop-down list, select the earning you want to provide an employee-specific value for.
In the Schedule drop-down list, select how frequently employees are paid the generated earning. For example, if the generated earning is paid every pay, select Every Regular Run.
Enter a date in the Effective Start field.
(Optional) Enter an effective end date in the Effective End field. The application only calculates the generated earning with the specified value 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.
If applicable, in the Payee drop-down list, select which payee to assign to the employee.
The application only displays the payees that have been assigned to the generated earning in the Payees sub-tab of the Earnings tab in Payroll Setup > Earnings and Deductions.
The application displays one or more parameters that have been set up for the third-party payee in Payroll Setup > Third Party Payees.
Click Save.

Elect Employees to Receive the Earning

This section describes how to define which employees receive the generated earning. Regardless of how the values used in the generated earning calculations are determined (per pay group, payee, or employee), every employee that should be paid the generated earning must 'elect' to receive it.

This is done by recording a payroll election in employee records in the People feature.

Note: If you have provided an employee-specific value or override for a generated earning, then the employee has already been elected to receive the generated earning. No further configuration is required.

To elect to receive an earning:

Go to People, open the employee profile, and click Payroll > Payroll Elections.
Click Add.
In the Type drop-down list, select Earnings.
In the Code drop-down list, select the earning you want the employee to receive.
In the Schedule drop-down list, select how frequently employees are paid the generated earning. For example, if the generated earning is paid every pay, select Every Regular Run.
Enter a date in the Effective Start field.
(Optional) Specify an effective end date in the Effective End field. The application only calculates the generated earning during the effective date range.
By default, the Effective End field is blank and the value does not expire.
Click Save.